Man wins $1.5M discrimination verdict. Then the appellate court completely erased it. Here’s why…

I want to tell you about an Army reservist whose employer investigated him for taking fraudulent leave. That investigation spawned a grand jury indictment for theft. The employee was booked, detained in jail, suspended from his job, and eventually fired.

Yada, yada, yada, a federal jury awarded the employee $1,500,000.

Lest anyone should accuse me of having yada yada’d over the best part, I’ll share a few more important details.

The reservist provided the district attorney’s office with documents substantiating his attendance at military functions on the dates relevant to his indictment. The district attorney dropped the charges, and the employee appealed his termination. During the pendency of that appeal, the two sides settled with the employee signing a release of  “any and all claims whatsoever” in exchange for three weeks of backpay and the chance to return to work.

However, the employee decided not to return to the job. Instead, he sued his former employer for violating the Uniformed Services Employment and Reemployment Rights Act (USERRA). USERRA protects service members’ reemployment rights when returning from a period of service in the uniformed services, including those called up from the reserves or National Guard, and prohibits employer discrimination based on military service or obligation.

The jury awarded the plaintiff $1,500,000.

The defendant argued that the plaintiff had released his USERRA claims. However, the district court disagreed. So, the defendant appealed to the Sixth Circuit Court of Appeals.

In a 2-1 decision, the Sixth Circuit sided with the defendant. It concluded that the plaintiff had released his USERRA claims because the settlement agreement stated that the plaintiff agreed to release “any and all claims whatsoever” as to his termination, words that “speak for themselves”:

[T]he law does not require contracting parties to enumerate, one by one, all the objects they intend a particular clause to reach. That kind of requirement would generate litigation rather than prevent it—by opening the door to disputes later about whether an item was described clearly enough, for example, or about circumstances not expressly foreseen at the time of signing. When the parties intend to settle “any and all claims,” rather, the law allows them to say precisely that.

The court also recognized that although USERRA settlements “must establish rights that are more beneficial for the servicemember than the ones he gives up” (cleaned up), it’s not a court’s role to second-guess what a servicemember believes to be “more beneficial,” in this case a lump sum upfront — even if a jury later awards the plaintiff WAY more than that. The court reasoned that whether a settlement is “more beneficial” cannot depend on future events. Otherwise, nobody would settle a claim with a servicemember.

I encourage you to read the decision, including the strongly worded dissent, and keep in mind that your mileage may vary depending on the facts and circumstances of any settlement of employment claims and the jurisdiction in which the dispute arises. Considering seeking help from an employment lawyer in these situations.