Serricchio v. Wachovia Sec. Llc

• Decision Date: 13 September 2011
• Docket Number: Docket No. 10–1590–cv.
• Citation: 191 L.R.R.M. (BNA) 2617,94 Empl. Prac. Dec. P 44262,658 F.3d 169
• Parties: Michael SERRICCHIO, Plaintiff–Appellee,v.WACHOVIA SECURITIES LLC, Defendant–Appellant,Prudential Securities, Inc., Defendant.*
• Court: U.S. Court of Appeals — Second Circuit

658 F.3d 169

191 L.R.R.M. (BNA) 2617

94 Empl. Prac. Dec. P 44,262

Michael SERRICCHIO, Plaintiff–Appellee,

v.WACHOVIA SECURITIES LLC, Defendant–Appellant,Prudential Securities, Inc., Defendant.*

Docket No. 10–1590–cv.

United States Court of Appeals, Second Circuit.

Argued: June 20, 2011.Decided: Sept. 13, 2011.

David S. Golub, Jonathan M. Levine, Marilyn J. Ramos, Craig N. Yankwitt, Silver, Golub & Teitell LLP, Stamford, CT, for Plaintiff–Appellee.

David Bennet Ross, Devjani Mishra, Brian D. Murphy, Seyfarth Shaw LLP, New York, NY, for Defendant–Appellant.M. Patricia Smith, Solicitor of Labor, Office of the Solicitor, United States Department of Labor, Thomas E. Perez, Assistant Attorney General, United States Department of Justice, Dennis J. Dimsey, Erin Aslan, Attorneys, Appellate Section, Civil Rights Division, United States Department of Justice, Washington, D.C., for Amicus Curiae, Secretary of the United States Department of Labor.Before: POOLER and WESLEY, Circuit Judges, KOELTL, District Judge. ^**POOLER, Circuit Judge:

This is an appeal from three orders of the United States District Court for the District of Connecticut (Arterton, J.): (1) denying summary judgment to Appellant Wachovia Securities LLC (“Wachovia”) ¹ on the ground that Appellee Michael Serricchio had adequately requested reinstatement to his prior employment position following a period of active military duty; (2) awarding liquidated damages, in an amount equal to the award of backpay, which was $389,453, and granting equitable relief to Serricchio following a bench trial on damages after a jury found Wachovia liable for violating the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) in failing to reemploy Serricchio “promptly” to a position of like “seniority, status and pay” following his military service; and (3) denying Wachovia's motion for judgment as a matter of law, or, in the alternative, for a new trial.²

Michael Serricchio, a member of the United States Air Force Reserve, was employed by Wachovia as a financial advisor. In the wake of September 11, 2001, Serricchio was called to active duty. After serving his country, Serricchio requested reemployment at Wachovia, as he was entitled to do under USERRA. Wachovia failed to reemploy Serricchio for a term of nearly four months after he requested reinstatement and ultimately offered Serricchio a reemployment position that set his compensation at the commission rate he had received prior to activation but without regard to the sizable book of business he had established in the months before his military service. A jury found that Wachovia's actions violated USERRA, because the bank failed to reemploy Serricchio “promptly” and because the reemployment position offered to Serricchio was not of equivalent “seniority, status and pay” to his pre-service position. The district court held a separate bench trial on damages, after which it ordered Wachovia to reinstate Serricchio with a fixed salary for three months during which time he was to undergo training to regain his broker's licenses. The district court later denied Wachovia's post-trial motions, and Wachovia appealed.

Although this case presents a number of issues of first impression for this and other courts, two predominate. First, we must decide whether USERRA requires an employer, who compensated a servicemember on a commission basis prior to his activation, to consider the size of the servicemember's pre-activation book of business in determining the appropriate post-service reemployment position. USERRA guarantees servicemembers a position of like “seniority, status, and pay” upon their return from active duty. See 38 U.S.C. § 4313(a)(2)(A). Is a reemployment position that provides the same commission rate (i.e., the same fixed percentage on accounts serviced), without regard to the volume or size of the accounts in the servicemember's pre-activation book of business, sufficient to satisfy USERRA, as a matter of law? The district court concluded that it was not, and the Secretary of the United States Department of Labor, charged with promulgating regulations under the statute, see 20 C.F.R. § 1002.2, has submitted a letter amicus curiae advancing the same conclusion. For reasons discussed in full detail below, we agree.

Second, we must decide whether it was an abuse of discretion for the district court to award Serricchio reinstatement to his prior financial advisor position with a fixed salary, even though his pre-service compensation was wholly commission-based. On this point, we note that where, as here, a jury has returned a verdict in favor of the servicemember, the statute authorizes a district court to use its “ full equity powers ... to vindicate fully the rights of” veterans. 38 U.S.C. § 4323(e) (emphasis added). Wachovia has identified no evidence overlooked, or legal precedent misinterpreted, that would lead us to the conclusion that the district court abused its discretion in fashioning the terms of Serricchio's reinstatement.

Accordingly, we affirm the orders of the district court in their entirety.

I

The Uniformed Services Employment and Reemployment Rights Act (“USERRA”) is the “latest in a series of laws protecting veterans' employment and reemployment rights going back to the Selective Training and Service Act of 1940.” 20 C.F.R. § 1002.2. USERRA's immediate predecessor, which was enacted as part of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, was commonly referred to as the Veterans' Reemployment Rights Act. See id. In enacting USERRA, Congress made clear that the statute should be thought of as an extension of existing law—not an entirely new piece of legislation supplanting the body of case law that had developed around veterans' rights. See id. (noting that “federal laws protecting veterans' employment and reemployment rights for the past fifty years ha[ve] been successful and that the large body of case law that ha[s] developed under those statutes remain[s] in full force and effect, to the extent it is consistent with USERRA”). The purpose of USERRA is to encourage military service “by eliminating or minimizing the disadvantages to civilian careers”; “to minimize the disruption to the lives” of servicemembers and their employers “by providing for the prompt reemployment” of servicemembers; and “to prohibit discrimination” against servicemembers. 38 U.S.C. § 4301(a).

USERRA provides in relevant part that servicemembers called away to military service “shall be promptly reemployed” by their former employers upon completion of a period of service in the armed forces. 38 U.S.C. § 4313(a) (emphasis added). In order for this guarantee to apply, the servicemember must “notify the employer ... of the person's intent to return to a position of employment with such employer ... by submitting an application for reemployment with the employer not later than 90 days after the completion of the period of service.” 38 U.S.C. § 4312(e)(1)(D).

The Supreme Court has explained that reemployment protections for servicemembers are “to be liberally construed for the benefit of those who left private life to serve their country....” Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 285, 66 S.Ct. 1105, 90 L.Ed. 1230 (1946) (discussing the Selective Training and Service Act of 1940). Consistent with this directive, we have held that where a returning servicemember's application for reinstatement puts the employer “on ample notice of his claim” to reemployment, any “technical failure[s]” in the form of the application will not prevent a rehiring mandate from binding the employer. Martin v. Roosevelt Hosp., 426 F.2d 155, 159 (2d Cir.1970); accord 20 C.F.R. § 1002.118 (“An application for reemployment need not follow any particular format.”). Indeed, the regulations provide that an “employee is permitted but not required to identify a particular reemployment position in which he or she is interested.” 20 C.F.R. § 1002.118.

Section 4316(a) of USERRA entitles a returning servicemember to “the seniority and other rights and benefits determined by seniority that the person had on the date of the commencement of service in the uniformed services plus the additional seniority and rights and benefits that such person would have attained if the person had remained continuously employed.” 38 U.S.C. § 4316(a) (emphasis added); 38 U.S.C. § 4313(a)(2)(A) (stating that a servicemember whose period in service exceeds 90 days is entitled to reemployment “in the position of employment in which the person would have been employed if the continuous employment of such person with the employer had not been interrupted by such service, or a position of like seniority, status and pay, the duties of which the person is qualified to perform”). USERRA's regulations explain that this means that “[a]s a general rule, the employee is entitled to reemployment in the job position that he or she would have attained with reasonable certainty if not for the absence due to uniformed service.” 20 C.F.R. § 1002.191. This position is referred to as the “escalator position.” Id. The “escalator position” may require that the returning servicemember be promoted as part of the reemployment package. Id. It can also lead to demotion or transfer, depending upon any intervening events during the servicemember's period of active duty. Id.

Setting aside intervening circumstances that would justify a downward departure in a returning servicemember's reemployment position, USERRA makes clear that the critical question is whether the reemployment position offered—if not the same job the servicemember would have had but for the period of service—is of “like seniority, status and pay” to that position. 38 U.S.C. § 4313(a)(2)(A). In determining whether the position is of similar “status,” an employer can consider the employee's “opportunities for advancement, general working conditions, job location, shift...