[Federal Register Volume 64, Number 194 (Thursday, October 7, 1999)]
[Rules and Regulations]
[Pages 54507-54508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26102]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 64, No. 194 / Thursday, October 7, 1999 / 
Rules and Regulations  

[[Page 54507]]


=======================================================================
-----------------------------------------------------------------------

MERIT SYSTEMS PROTECTION BOARD

5 CFR Part 1201


Practices and Procedures

AGENCY: Merit Systems Protection Board.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Merit Systems Protection Board (MSPB or the Board) is 
amending its rules of practice and procedure to implement provisions of 
the Uniformed Services Employment and Reemployment Rights Act of 1994 
(USERRA), as amended by the Veterans Programs Enhancement Act of 1998. 
The purpose of the amendment is to provide guidance to the parties to 
MSPB cases, and their representatives, on how to proceed in cases 
raising claims that an agency employer or the Office of Personnel 
Management (OPM) has not complied with a USERRA provision governing the 
employment and reemployment rights to which a person is entitled after 
service in the uniformed services.

EFFECTIVE DATE: October 7, 1999.

FOR FURTHER INFORMATION CONTACT: Robert E. Taylor, Clerk of the Board, 
(202) 653-7200.

SUPPLEMENTARY INFORMATION: On December 22, 1997, the Board issued an 
interim rule to implement provisions of the Uniformed Services 
Employment and Reemployment Rights Act of 1994 (USERRA), Public Law 
103-353 (62 FR 66813). The interim rule requested public comments and 
allowed 60 days, until February 20, 1998, for submission of comments.
    Comments were received from two Federal agencies, both of which 
have significant responsibilities under USERRA. The Office of Personnel 
Management supported the interim rule, as published, citing in 
particular its support for the establishment of time limits for filing 
a USERRA appeal with MSPB. (The Preamble to the interim rule explained 
that the Board is authorized by 5 U.S.C. 1204(h) to promulgate 
regulations to carry out its functions, that the Board has used this 
authority since its inception to prescribe time limits for filing 
appeals with the Board, and that the Board is also authorized by 38 
U.S.C. 4331(b)(2)(A) to promulgate regulations to carry out its 
functions under USERRA.) The OPM comments noted that the establishment 
of time limits would avoid matters becoming stale, while adequately 
safeguarding the procedural rights of Federal employees.
    The Department of Labor, on the other hand, objected to the 
establishment of time limits for filing USERRA appeals. In support of 
its position, the Department cited the broad remedial purpose of USERRA 
and the stated intent of Congress that Federal employees be provided 
protections comparable to those afforded employees of State and private 
employers. The Department pointed out the specific prohibition on 
application of any State statute of limitations to claims brought 
against State or private employers (38 U.S.C. 4323(c)(6), now 38 U.S.C. 
4323(i) as amended by the Veterans Programs Enhancement Act of 1998). 
The Department argued that, rather than imposing time limits on the 
filing of USERRA claims, the Board should apply the equitable doctrine 
of laches to claims brought by Federal employees.
    While the Board was evaluating these comments, the House of 
Representatives passed H.R. 3213, the USERRA Amendments Act of 1998. 
This bill included a provision (section 4) that would require the Board 
to adjudicate any USERRA claim filed on or after October 13, 1994 (the 
enactment date of USERRA) ``without regard as to whether the complaint 
accrued before, on, or after October 13, 1994.'' Subsequently, both the 
House and Senate passed H.R. 4110, the Veterans Programs Enhancement 
Act of 1998, which incorporated the language of section 4 of H.R. 3213 
as section 213. (The other provisions of H.R. 3213 became sections 211 
and 212 of H.R. 4110.) The President signed H.R. 4110 on November 11, 
1998, Public Law 105-368. Under this amendment to USERRA, the time 
limits in the Board's interim rule clearly could not be applied to 
USERRA complaints that accrued prior to October 13, 1994.
    In view of both the 1998 USERRA amendments and the comments on the 
interim rule submitted by the Department of Labor, the Board undertook 
an extensive review of the history of veterans reemployment rights law. 
From this review, the Board has concluded that it would be inconsistent 
with the intent of Congress for the Board to exercise its regulatory 
authority to establish a time limitation on the filing of claims by 
Federal employees under USERRA.
    The prohibition on State statutes of limitation in USERRA is 
carried over from an earlier law, the 1974 Vietnam Era Veterans 
Readjustment Assistance Act. Section 404 of that law, which created 
Chapter 43 of Title 38, is commonly referred to as the Veterans 
Reemployment Rights Act (VRR Act). The legislative history makes clear 
Congress' preference for the application of laches in VRR cases. The 
Senate Report, S. Rep. No. 907, 93d Cong., 2d Sess. at 111 (1974) 
(emphasis added) states:

    There is also added a provision at the end of this section which 
reaffirms and reflects more clearly the congressional intent that 
legal proceedings under this chapter shall be governed by equity 
principles of law, specifically by barring the application of State 
statutes of limitations to any such proceeding.
    Congress, in 1940, omitted any reference to the application of a 
time-barred defense in cases arising under this law, in part to 
insure the application of a policy of keeping enforcement rights 
available to returned veterans as uniform as possible throughout the 
country. The equity doctrine of laches accomplishes the purpose as 
nearly as possible. 
    Therefore, those court decisions which have either applied a 
State statute of limitations to completely bar a claim under the 
prior law (see e.g. Blair v. Paige Aircraft Maintenance, Inc., 467 
F.2d 815 (1972) (Alabama 1-year statute of limitations); Bell v. 
Aerodex, Inc., 473 F.2d 869 (5th Cir. 1973) (Florida 1-year statute 
of limitations) or have applied a State statute of limitations to 
partially bar a claim under the prior law (see e.g. Gruca v. United 
States Steel Corp., (No. 73-1803 3d Cir. decided April 17, 1974); 
Smith v. Continental Airlines, Inc., 70 CCH Labor Cases 13,501 
(C.I.), Calif. 1973) are not in accord with the intent of Congress 
as to the application of time-barred defenses.

    Congress did not include either in the 1974 law or in USERRA in 
1994 an explicit prohibition on the application

[[Page 54508]]

of a Federal time limitation to veterans reemployment rights claims 
brought by Federal employees. Congress' silence regarding applying 
Federal statutes of limitation to veterans reemployment cases, however, 
is not necessarily determinative. In Wallace v. Hardee's of Oxford, 874 
F. Supp. 374, 376 (M.D. Ala. 1995), the court rejected Hardee's 
argument that if Congress intended to preempt use of Federal statutes 
of limitation it would not have barred only State statutes of 
limitation. The court noted that ``the Act's silence can be explained 
on the basis that Congress enacted the bar on State statutes of 
limitations specifically to overrule case law on that issue.'' Id. 
``Because, to the court's knowledge, there was no case law borrowing 
from Federal statutes of limitations in the veterans' reemployment 
area, there would have been no reason for Congress to enact a statute 
on that subject. In this situation, Congress's silence on borrowing 
from Federal statutes of limitation cannot be determinative.'' Wallace, 
874 F. Supp. at 376.
    Other courts considering time limits in veterans reemployment 
matters have applied laches. In Farries v. Stanadyne/Chicago Div., 832 
F.2d 374, 379-80 (7th Cir. 1987), the court applied laches to a VRR Act 
claim, relying on the Senate Report language cited above indicating 
that legal proceedings under the Act are to be governed by equitable 
principles, including the doctrine of laches. In Stevens v. Tennessee 
Valley Authority, 712 F.2d 1047, 1056-57 (6th Cir. 1983), the court 
applied laches to a veterans reemployment rights matter (cited with 
approval in the USERRA legislative history, H.R. Rep. No. 65, 103rd 
Cong., 1st Sess. at 39 (1993)). In Goodman v. McDonnell-Douglas Corp., 
606 F.2d 800, 805 (8th Cir. 1979), cert. denied, 446 U.S. 913 (1980), 
the court applied laches in a VRR Act case, concluding that analogous 
statutes of limitation are only one element in determining ``whether 
the length of delay was unreasonable and whether the potential for 
prejudice was great.'' The court found that this approach is consistent 
with the purpose of the doctrine of laches and congressional intent to 
protect veterans' reemployment rights. Id.
    USERRA broadened both the substantive and procedural rights of 
veterans. The legislative history does not distinguish between those 
rights in noting a congressional intent to construe the Act broadly but 
directs that the Act be treated as ``an organic whole.'' The House 
Report at 19 states:

* * * the extensive body of case law that has evolved over (the 
fifty years of legislation regarding veterans employment and 
reemployment rights), to the extent that it is consistent with the 
provisions of this Act, remains in full force and effect in 
interpreting these provisions. This is particularly true of the 
basic principle established by the Supreme Court that the Act is to 
be ``liberally construed.''

    The House Report cites two Supreme Court cases for its principle of 
liberal construction. Fishgold v. Sullivan Drydock & Repair Corp., 328 
U.S. 275 (1946), interprets the provision of the Selective Service Act 
requiring that, upon return from military service, an employee is to be 
restored without loss of seniority. Noting that the Act is to be 
liberally construed, the Court stated that it must ``construe the 
separate provisions of the Act as parts of an organic whole and give 
each as liberal a construction for the benefit of the veteran as a 
harmonious interplay of the separate provisions permits.'' Id. at 285 
(emphasis added). In Alabama Power Co. v. Davis, 431 U.S. 585 (1977), 
the Court, citing Fishgold, held that the Military Selective Service 
Act should be construed broadly to enable an employee to accumulate 
pension benefits while on military duty, as long as there is 
``reasonable certainty'' that he would have accumulated those benefits 
had he stayed at his job. Id. at 591-92.
    Given the broad remedial purpose of USERRA, the mandate for its 
liberal construction, the stated intent of Congress that Federal 
employees be provided protections comparable to those afforded 
employees of State and private employers, the stated intent of Congress 
that the Federal Government serve as a model employer, the 1998 
amendment extending the Board's jurisdiction to complaints that accrued 
prior to the USERRA effective date, and the legislative history and 
judicial construction of veterans' reemployment rights law reviewed 
above, the Board has concluded that application of a time limitation to 
Federal employees' USERRA claims would be inconsistent with 
congressional intent.
    The Board in this final rule is revising 5 CFR 1201.22(b)(2) to 
remove the time limits for filing USERRA appeals and to state instead 
that the time limit set forth in Sec. 1201.22(b)(1)--which applies to 
MSPB appeals generally--shall not apply to appeals alleging non-
compliance with the provisions of chapter 43 of title 38 of the United 
States Code relating to the employment or reemployment rights or 
benefits to which a person is entitled after service in the uniformed 
services. No other changes are made to the interim rule.
    The Board is publishing this rule as a final rule pursuant to 5 
U.S.C. 1204(h) and 38 U.S.C. 4331.
    Accordingly, the Board adopts its interim rule published on 
December 22, 1997 (62 FR 66813), as final, with the following change:
    1. The authority citation for part 1201 continues to read as 
follows:

    Authority: 5 U.S.C. 1204 and 7701, and 38 U.S.C. 4331, unless 
otherwise noted.

    2. Section 1201.22(b)(2) is revised to read as follows:


Sec. 1201.22  [Amended]

    (b) * * *
    (2) The time limit in paragraph (b)(1) of this section shall not 
apply to an appeal alleging non-compliance with the provisions of 
chapter 43 of title 38 of the United States Code relating to the 
employment or reemployment rights or benefits to which a person is 
entitled after service in the uniformed services (see paragraph (a)(22) 
of Sec. 1201.3 of this part).

    Dated: September 28, 1999.
Robert E. Taylor,
Clerk of the Board.
[FR Doc. 99-26102 Filed 10-6-99; 8:45 am]
BILLING CODE 7400-01-U