Walmart and an Army reservist have reached an agreement to settle his claims regarding paid military leave that could ultimately pay up to $14 million to thousands of Guard and Reserve members.
The proposed settlement, if approved by the court, could include more than 7,000 current and former Walmart employees who have taken military leave since October 2004, according to court documents. Walmart has also changed its policy as of Jan. 1, to increase the paid military leave benefit during shorter-term military duties.
The settlement could also potentially have an impact on other employers, said Kevin Hollinger, legislative director for the Reserve Officers Association.
The reservist, Nickolas Tsui, of Dracut, Massachusetts, alleges Walmart violated his rights under the Uniformed Services Employment and Reemployment Rights Act, known as USERRA. Tsui, who is currently employed at a Sam’s Club store operated by Walmart in Hudson, New Hampshire, alleges that Walmart violated his USERRA rights by not providing fully paid leave when he took short-term military leave — leave that lasts 30 consecutive days or fewer.
The lawsuit was filed Dec. 31 in the U.S. District Court for the District of Massachusetts, the same day attorneys for Tsui and for Walmart filed a joint notice of a proposed class action settlement.
Tsui has worked for Walmart since May, 2009, and joined the Army Reserve in April, 2014. Since then, he has routinely taken short-term military leave for his duties as a reservist, and hasn’t received any paid leave from Walmart, according to court documents.
Under USERRA, employers aren’t specifically required to pay Guard and Reserve members while they are performing military duties, although a number of employers, including Walmart, do. But this case revolves around another aspect of USERRA, which requires military leave to be treated no less favorably than any other forms of comparable leave that an employer provides to its employees, according to the complaint. “By providing fully paid leave to associates who take jury duty leave, bereavement leave, and other comparable forms of leave, Walmart was obligated by USERRA… to do the same for its associates who take short-term military leave,” according to the lawsuit.
The lawsuit notes that, since 2017, for most types of military leave of at least four days, Walmart has paid its employees the difference between their pay at Walmart and their military pay, commonly known as differential pay. But Walmart has never provided fully paid leave to employees who have taken short-term military leave of three days or less, according to the lawsuit.
“I’m pleased that Walmart and Sam’s Club were willing to resolve this issue for me and thousands of other associates who take leave to fulfill their military commitments,” said Nickolas Tsui, in a press release issued by his attorneys. He said the company’s change in its leave policy “emphasizes the company’s commitment to me and other associates who are proud to serve our country.”
As part of the settlement, Walmart has implemented a new policy, effective on Jan. 1, that provides fully paid leave for employees who take up to 30 days of military leave in a calendar year. When the employee takes more than 30 days of military leave in a calendar year, the employee may be eligible for differential pay for the additional days of military leave — the difference between their Walmart pay and their military pay, if their Walmart pay is greater than their military pay — for up to 12 months.
In a statement in the press release, a senior vice president at Walmart said the company had been looking at how they can enhance their military leave policy.
“We are pleased to be providing these extra military leave benefits in connection with this settlement,” said Adam Stavisky, senior vice president for U.S. benefits at Walmart, in the announcement. “We have a history of supporting our members of the military and veterans, and over the last seven years alone have hired more than 320,000 veterans and military spouses. We remain committed to their success with Walmart.”
Walmart denies liability or wrongdoing of any kind associated with the allegations, and Walmart officials contend the litigation isn’t appropriate for class-action treatment, according to court documents. But officials agree that, for purposes of the settlement, they won’t oppose the court’s certification of the settlement class to include thousands of other Walmart employees.
Attorneys have identified more than 7,000 current and former employees who could be eligible for payments under the proposed settlement, based on short-term military leave between 2004 and 2020, but there are additional people for whom Walmart doesn’t have records, according to court documents. The minimum amount available for the payments is $10 million; the ceiling is $14 million.
According to documents outlining the proposed settlement, the payments will be based on the calendar years when the employee took short-term military leave. The employees will receive a pro rata share of the total, and the amount will depend on how many claims are filed and how many years of short-term military leave are verified. For example, the current estimate is a $1,200 payment for each year of military leave. If the total approved claims exceed $14 million, there would be a prorated reduction in the $1,200 payment for each calendar year. If there are fewer claims, there would be a prorated increase in the payment so that the total amount awarded would reach $10 million. But with that $1,200 estimated payment, attorneys fees and other costs are expected to reduce the payment to about $775 for each year of military leave for those eligible, according to court documents.
If the settlement is approved by the court, information will be sent to those who potentially qualify to submit a claim. A website has been identified for more information about submitting claims when the process begins, but it is not currently active.
This isn’t the first time the argument regarding comparable leave policies has been made, said Hollinger, of the Reserve Officers Association. It’s of national interest, he added, because of the wide reach of Walmart and the large number of Walmart employees. Walmart employs more than 1.5 million people in the U.S.
While the settlement may not have the same impact that a court opinion might, its effects will likely spill over into other companies, and other reservists may have a valid argument for similar treatment, Hollinger said.
“I believe this is more of a fair employment case than a USERRA case,” Hollinger said, because of the comparison to benefits provided by corporations during short term leaves of absence. He also emphasized that Walmart “has shown their ability to hire and treat reservists very well throughout time. Walmart has supported Reserve and National Guard members.”
Hollinger, who retired from the Army National Guard as an E7 in 2020, recalled his own experience as a Walmart employee in 1996 when he joined the Army. “They were more than helpful,” he said, allowing him to take time off for MEPS, and allowing his recruiter to come into the store and use office space for him to sign the needed paperwork.