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The right to pursue a federal USERRA claim in a judicial forum is a procedural right, and, absent any contrary intent expressed by Congress, can be waived through an arbitration agreement as long as the complainant’s underlying substantive rights are not abridged, according to a federal district court in Indiana.
In Kitts v. Menards, Inc., No. 3:06-CV-708, 2007 WL 2901142 (N.D. Ind., Sept. 28, 2007), Kitts was hired by Menards and signed an agreement to arbitrate all claims and disputes related to his work. Later, Kitts brought a claim against Menards under the Uniformed Services Employment and Reemployment Rights Act (USERRA) for unlawful retaliation based on military service. Menards sought to stay the action and compel arbitration, maintaining that the USERRA claim fell within the scope of the agreement to arbitrate. Kitts opposed, alleging that Congress had intended to preclude arbitration of claims arising under USERRA.
The Court held that Congress had not intended to preclude arbitration of USERRA claims, and granted the motion to compel arbitration.
The Court acknowledged that some district courts had concluded that arbitration of USERRA claims was precluded because USERRA forbids any contract that reduces, limits, or eliminates any right or benefit provided by the Act, and that the right to bring an action in federal court was a procedural right that could not be waived by contract under USERRA.
However, the Court instead agreed with the Fifth Circuit Court of Appeals and other district courts that USERRA did not preempt the arbitration of its claims. These courts characterized the right to a judicial forum as a procedural right, and not a substantive right. According to the Court, only substantive rights under USERRA could not be waived; therefore, a waiver of the judicial forum in favor of arbitration was permitted for USERRA claims.
Furthermore, the Court noted that Kitts had to sustain the burden of showing Congress had intended to preempt arbitration of USERRA claims, and had failed to do so. The Court observed that USERRA made no mention of arbitration within its text, did not explicitly preclude arbitration, and, in fact, endorsed the use of other non-judicial procedures and remedies. All this, according to the Court, indicated that Congress did not intend to preempt arbitration of USERRA claims, and required the Court to grant the motion to compel arbitration.
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