California Court: USERRA Claims Cannot Be Released

General releases are ineffective to release a growing list of statutory claims. Claims under the FLSA, FMLA, and claims for unpaid wages under California law are just some of the claims that may not be included in a release. The California Supreme Court is going to decide whether claims for unpaid expenses under Lab. Code section 2802 may be released, as was held in Edwards v. Arthur Andersen, discussed here.

So, add another statute to the list of un-releseable laws: USERRA. The Court of Appeal decided in Perez v. Uline, Inc. that a general release was ineffective against a later claim for wrongful termination in violation of public policy and breach of contract. USERRA contains language invalidating such waviers:

This chapter supersedes any State law . . . contract, agreement, . . . or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter . . . .

Applying this section, the Court held that a release of USERRA claims was invalid. The common law Tameny and contract claims, however, are not USERRA claims. But the Court of Appeal did not make that distinction.

An alternative practice may be to have the employee agree (if true) that he or she has received all wages and leave to which he or she is entitled.

USERRA claims will be more prevalent as more soldiers return to work from duty in Iraq and Afghanistan. Employers should be aware of their obligations under this law. A release apparently is not an option.

As a final note, the case is interesting, too, because it reminds practitioners that waivers of Civ. Code section 1542 are not required in a release for it to be enforceable:

Plaintiff testified he understood he was releasingclaims arising under all statutes the agreement referred to, even those he did notunderstand. This knowledge is sufficient to withstand the provisions of Civil Codesection 1542. Nothing in that statute requires that it be designated in the release or that aparty specifically waive its provisions. While it might have been more comprehensive to have a reference to Civil Code section 1542 in the release, “‘To be effective, a releaseneed not achieve perfection . . . .’ [Citation.]”

This is not exactly news, but it may be new to you. For the record, we always recommend inclusion of the waiver to avoid disputes over the enforceability of a general release.

Greg