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Company resolves USERRA allegations, but does agreement include retaliatory clause?

By Pamela Wolf, J.D.

The Department of Justice has reached a settlement agreement under which BioFusion Health Products Inc. will pay $3,000 to resolve claims that the Rapid City, South Dakota-based company violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) when it failed to reemploy a South Dakota Air National Staff Sergeant after an extended military leave and when it eventually terminated her employment. Curiously, the settlement agreement resolving the lawsuit includes a clause that some legal practitioners would consider retaliatory.

At the time of her termination, the Staff Sergeant was a Senior Airman with the Air National Guard, where she had served honorably since 2010. The Justice Department filed a lawsuit asserting that her military service was a motivating factor in BioFusion’s decisions to deny her request for reemployment and terminate her employment, according to an agency release. She was terminated following her deployment to attend Airmen Leadership School, a professional military education training associated with her military service.

Retaliatory agreement? The settlement agreement resolving the lawsuit requires that BioFusion pay $3,000 in back pay to the Staff Sergeant. The agreement also includes a so-called “never darken my door again” clause that some would see as retaliatory: “Plaintiff agrees and understands that she will not seek employment or reemployment with BioFusion Health Products, Inc., or any related entity at any time now or in the future.”

John Hendrickson, former EEOC Regional Attorney for the Chicago District, has stressed that this type of clause is retaliatory, one that, at the time, the EEOC would refuse to include in settlement agreements. Specifically, at a Chicago Bar Association conference in 2009, Hendrickson suggested that these clauses, which forever bar a person who has filed a discrimination charge that is the predicate for litigation from applying for a job with a defendant employer, are “flatly retaliatory.” Hendrickson said then that the EEOC would not agree to such terms, and if the agency believed an employer was privately trying to negotiate a “never darken my door again” agreement with a party, the EEOC would not go forward with a consent decree.

Injunctive relief absent. The instant agreement also lacks any injunctive relief that would require training on USERRA, or enjoin BioFusion from violating USERRA in the future.

This case resulted from a referral by the Labor Department following an investigation by its Veterans’ Employment and Training Service (VETS). When resolution could not be reached, VETS referred the complaint to the Justice Department’s Civil Rights Division.

“The United States has a solemn obligation to ensure that those selfless Americans who serve in the nation’s Armed Forces enjoy every opportunity to advance their civilian careers,” said Acting Associate Attorney General Jesse Panuccio. “The Department of Justice will be unwavering in protecting the rights of our nation’s service members and we will continue to hold accountable employers who violate those rights.”

The Justice Department brought its lawsuit in the District of South Dakota, Western Division; the case is No. 16-5079-JLV.