United States Court of Appeals
For the First Circuit
No. 12-1023
LUIS A. RIVERA-MELÉNDEZ; WANDA OTERO-RIVERA;
CONJUGAL PARTNERSHIP RIVERA-OTERO,
Plaintiffs, Appellants,
v.
PFIZER PHARMACEUTICALS, LLC,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Marcos E. López, U.S. Magistrate Judge]
Before
Lynch, Chief Judge,
Torruella and Lipez, Circuit Judges.
José L. Barrios-Ramos, with whom Pirillo Hill González &
Sánchez, PSC was on brief, for appellant.
Pedro J. Torres-Díaz, with whom Mariela M. Rexach-Rexach, José
J. Sánchez-Vélez, and Schuster Aguiló LLP were on brief, for
appellee.
Holly A. Thomas, Attorney, United States Department of
Justice, with whom M. Patricia Smith, Solicitor of Labor, United
States Department of Labor, Thomas E. Perez, Assistant Attorney
General, Dennis J. Dimsey, Attorney, United States Department of
Justice, and Erin Aslan, Attorney, United States Department of
Justice, were on brief, for amicus curiae United States.
September 20, 2013
LIPEZ, Circuit Judge. This case requires us to determine
whether the "escalator principle" and "reasonable certainty" test
governing reinstatement claims under the Uniformed Services
Employment and Reemployment Rights Act of 1994 ("USERRA") apply to
non-automatic, "discretionary" promotions. The district court
found that they do not, and used this conclusion to reject
plaintiff Luis Rivera-Meléndez's USERRA reinstatement claim
pursuant to 38 U.S.C. §§ 4312 and 4313 and award summary judgment
to defendant, Pfizer Pharmaceuticals, LLC ("Pfizer"). Because we
conclude that the escalator principle and reasonable certainty test
apply regardless of whether the promotion at issue is automatic or
non-automatic, we vacate the district court's judgment and remand.
I.
A. Background
We summarize the relevant facts in the light most
favorable to Rivera, the party against whom summary judgment was
granted. Barclays Bank PLC v. Poynter, 710 F.3d 16, 18 (1st Cir.
2013).
Luis Rivera-Meléndez ("Rivera") earned his associate's
degree in chemistry from the Technological Institute of Manatí in
1993 and a bachelor's degree in liberal arts from the Pontifical
Catholic University at Arecibo in 2010. He began working at
Pfizer's pharmaceutical manufacturing facility in Barceloneta,
Puerto Rico in 1994. Initially employed as a Chemical Operator
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Trainee, Rivera received several promotions, including a 2004
promotion to Active Pharmaceutical Ingredient ("API") Group Leader.
The API Group Leader position -- which has since been eliminated --
was an hourly, non-exempt position under the supervision of the
exempt API Supervisor and API Manager.1
Rivera also serves his country as a member of the United
States Naval Reserve ("Navy"). During his career at Pfizer, he has
been called twice into active duty service. On October 11, 2008,
Rivera received notice that he was being called to active duty in
Iraq. He promptly notified Pfizer's Senior Human Resources
Specialist that he needed to take military leave. After attending
pre-mobilization training, Rivera commenced his active duty service
on December 5, 2008. His tour of duty concluded on October 21,
2009.
In February 2009, Pfizer restructured its API Department.
As part of this restructuring, Pfizer eliminated the API Group
Leader position held by Rivera and replaced it with two separate
classifications: API Team Leader and API Service Coordinator.
Pfizer management held a meeting with the API Group Leaders at the
Barceloneta facility and informed them that they could apply for
1
The terms "exempt" and "non-exempt" refer to the employee's
status under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201
et seq. For our purposes, the relevant difference between the two
is that an exempt employee is a salaried employee while a non-
exempt employee is paid at an hourly rate. See, e.g., 29 C.F.R. §
541.100(a), 541.200(a).
-3-
the exempt API Team Leader position, for which seven job openings
would be posted. The API Group Leaders were informed that if they
were not among those selected for the API Team Leader position,
they would have three alternatives: (1) to apply to the new, non-
exempt API Service Coordinator position; (2) to be demoted to the
Senior API Operator position; or (3) to participate in a voluntary
separation option.
The API Team Leader positions were posted in March 2009,
seven months before Rivera returned to Pfizer. The position
originally required, inter alia, a Bachelor's Degree in Science or
Business Administration, at least five years of experience in API
manufacturing, and at least five years in a supervisory or
interdisciplinary team environment handling multiple tasks. Pfizer
Senior Human Resources Specialist Lissette Guerra-Sierra testified
in a deposition that an estimated sixteen to seventeen people
applied for the seven API Team Leader vacancies. After a first
round of interviews, Pfizer modified the criteria so that API Group
Leaders without bachelor's degrees could qualify for the position,
subject to their completing the degree requirement within a
specified period of time.
The seven API Team Leader positions were filled by six of
the former API Group Leaders and one Senior API Operator.2 None of
2
The Senior API Operator position was lower than the API
Group Leader position in the structural hierarchy of Pfizer's API
Department. However, the Senior API Operator who was appointed to
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the six API Group Leaders who were promoted satisfied the original
bachelor's degree requirement. Of the API Group Leaders not
selected for the API Team Leader position, one, Luis Bravo, was
appointed to special projects under the supervision of the API
Manager pending the approval of the new API Service Coordinator
position, while two others were demoted to the API Senior Operator
position.
Upon being discharged from active military service,
Rivera contacted Pfizer to request reinstatement. He returned to
work on October 22, 2009. Rivera met with the API Manager, who
told him that he was reinstated as an API Group Leader. However,
because the API Group Leader position had been effectively
eliminated by the time he returned to Pfizer, Rivera, like Luis
Bravo, was assigned to "special tasks" under the supervision of the
API Manager. Although Rivera's salary and benefits were not
altered, he had reduced job responsibilities while assigned to the
"special tasks" role.
On May 17, 2010, Rivera was appointed to the API Service
Coordinator position after the creation of the position had been
officially approved by Pfizer. Three other former API Group
Leaders were appointed to the API Service Coordinator position as
well. Rivera continued to receive the same compensation and
an API Team Leader position possessed a bachelor's degree at the
time of appointment.
-5-
benefits he had received as an API Group Leader, though he had
fewer job responsibilities. Specifically, Rivera stated in his
deposition that he no longer had the limited supervisory duties
with which he was charged as an API Group Leader when supervisors
were unavailable. Rivera also testified that he would have liked
the opportunity to apply for the API Team Leader position, and that
he felt he was qualified for the position.
B. Procedural History
Rivera and the conjugal partnership comprised of Rivera
and his wife filed suit against Pfizer on January 11, 2010,
asserting USERRA and pendent state law claims.3 Rivera's USERRA
claims alleged violations of the statute's anti-discrimination and
reinstatement provisions. Specifically, Rivera argued that Pfizer
had violated his rights by, inter alia, delaying payment of his
differential pay and pay raise, refusing to pay him a 2009
Christmas bonus, failing to provide him with an opportunity to
apply for the API Team Leader position, and subjecting him to a
hostile work environment based on his military service. Rivera
also alleged that he was entitled to be rehired to a supervisory
3
Rivera's initial lawsuit was filed four months before his
official appointment to the API Service Coordinator position. He
filed an amended complaint on August 31, 2010, after a previously-
filed amended complaint had been stricken from the record.
Additionally, the parties consented to proceed before a magistrate
judge pursuant to 28 U.S.C. § 636(c).
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(i.e., the API Team Leader) position upon his return from active
duty.
Pfizer moved for summary judgment on August 23, 2011.4
The district court granted Pfizer's motion as to nearly all of
Rivera's USERRA claims.5 Among the claims the district court
rejected were those Rivera brought pursuant to 38 U.S.C. §§ 4312
and 4313. Specifically, the district court held that Rivera could
not establish that he was entitled to be employed as an API Team
Leader upon his return from active duty because the API Team Leader
position was not Rivera's "escalator position" -- that is, the
"position of employment in which [Rivera] would have been employed
if [his] continuous employment . . . with the employer had not been
interrupted by [his] service." 38 U.S.C. § 4313(a)(2)(A). Because
the API Team Leader position was not an "automatic promotion" and
4
The district court considered two motions to dismiss before
Pfizer filed its motion for summary judgment. On October 19, 2010,
the district court granted Pfizer's motion to dismiss the pendent
state law claims. Pfizer filed a second motion to dismiss on
November 30, 2010, in which it argued that to the extent that
Rivera's USERRA claims were based on the fact that Pfizer did not
contact him to inform him of the API Department restructuring and
the availability of the API Team Leader Position, such claims
should be dismissed, as Pfizer was under no obligation to contact
Rivera about the restructuring while Rivera was performing his
active duty service. The district court denied the motion.
Subsequently, of course, it entered the summary judgment for Pfizer
at issue here.
5
Rivera's claim regarding the $100 Pfizer Christmas bonus was
the only claim that survived summary judgment. The parties
subsequently settled this matter.
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instead involved employer discretion, the court found that Rivera
could assert no entitlement to it under USERRA.
Rivera promptly filed a motion for reconsideration,
arguing, inter alia, that the court had erred when it determined
that the escalator position principle applied only to non-
discretionary promotions. Unpersuaded, the district court simply
reiterated its insistence on the automatic promotion principle.
II.
On appeal, Rivera asks us to vacate the district court's
grant of summary judgment only as to his USERRA reinstatement
claim. He mounts a two-pronged attack on the district court's
analysis. First, he maintains that the district court erred in
holding that USERRA's escalator principle and its associated
reasonable certainty test apply only to automatic promotions.
Second, he argues that, based on the evidence presented below,
there are genuine issues of material fact relating to the question
of whether it was reasonably certain that if not for the period of
service, he would have attained the API Team Leader position.
The United States filed an amicus brief in this case,
also arguing that the district court's grant of summary judgment
must be vacated. Like Rivera, the United States maintains that the
escalator principle and reasonable certainty test apply to both
automatic and non-automatic promotions, and that the proper inquiry
was therefore "not whether the promotion was automatic or
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discretionary, but whether it was reasonably certain that [Rivera]
would have applied for and received the promotion had he not been
in active duty status." The United States takes no position on
whether Rivera could ultimately prove that it was reasonably
certain that he would have been promoted to the API Team Leader
position.6
A. USERRA
Enacted in 1994, USERRA represents "the latest in a
series of laws7 protecting veterans' employment and reemployment
rights." 20 C.F.R. § 1002.2. In enacting the statute, Congress
made clear that, to the extent consistent with USERRA, "the large
body of case law that had developed" under previously enacted
federal laws protecting veterans' employment and reemployment
rights "remained in full force and effect." 20 C.F.R. § 1002.2.
The purpose of USERRA is to (1) encourage noncareer military
service by "eliminating or minimizing the disadvantages to civilian
careers," (2) minimize the disruption of servicemembers and their
6
We thank the United States for its amicus brief, which was
of great assistance to us in working through the issues presented
in this case.
7
The statute's immediate predecessor was the Vietnam Era
Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. §§ 2021-
2027, which was later recodified at 38 U.S.C. §§ 4301-4307 and was
commonly referred to as the Veterans' Reemployment Rights Act
("VRRA"). The VRRA was amended and recodified as USERRA. See 70
Fed. Reg. 75,246-01, 75,246. The rights that Congress sought to
clarify in enacting USERRA were first contained in the Selective
Training and Service Act of 1940, 50 U.S.C. § 301 et seq. See 70
Fed. Reg. at 75,246.
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employers "by providing for the prompt reemployment" of
servicemembers, and (3) prohibit discrimination against
servicemembers. 38 U.S.C. § 4301(a). We have previously noted
that USERRA's provisions "should be broadly construed in favor of
military service members as its purpose is to protect such
members." Vega-Colón v. Wyeth Pharm., 625 F.3d 22, 26 (1st Cir.
2010); see Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S.
275, 285 (1946) (holding that the Selective Training and Service
Act of 1940 "is to be liberally construed for the benefit of those
who left private life to serve their country in its hour of great
need").
In the case of a servicemember whose period of service
exceeded ninety days, section 4313(a)(2) of the statute provides
the rules applicable to the employer's determination of the
servicemember's proper reemployment position. Pursuant to that
section, the servicemember is to be reemployed "in the position of
employment in which [he] would have been employed if the continuous
employment of such person with the employer had not been
interrupted by such service, or a position of like seniority,
status and pay, the duties of which the person is qualified to
perform." 38 U.S.C. § 4313(a)(2)(A) (emphasis added). This
position is the aforementioned "escalator position." If, and only
if, the returning servicemember is not qualified to perform the
position described in section 4313(a)(2)(A) after the employer has
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made reasonable efforts to qualify him, the employer may reemploy
the servicemember "in the position of employment in which [he] was
employed on the date of the commencement of the service in the
uniformed services, or a position of like seniority, status and
pay, the duties of which the person is qualified to perform." Id.
§ 4313(a)(2)(B) (emphasis added).
The Department of Labor's ("Department") regulations
provide further clarification on the escalator principle. As to
the concept of the escalator principle generally, the regulations
state:
As a general rule, the employee is
entitled to reemployment in the job position
that he or she would have attained with
reasonable certainty if not for the absence
due to uniformed service. . . . The principle
behind the escalator position is that, if not
for the period of uniformed service, the
employee could have been promoted (or,
alternatively, demoted, transferred, or laid
off) due to intervening events. The escalator
principle requires that the employee be
reemployed in a position that reflects with
reasonable certainty the pay, benefits,
seniority, and other job perquisites, that he
or she would have attained if not for the
period of service.
20 C.F.R. § 1002.191 (emphases added). The regulations also
provide guidance on the determination of the specific reemployment
position:
In all cases, the starting point for
determining the proper reemployment position
is the escalator position, which is the job
position that the employee would have attained
if his or her continuous employment had not
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been interrupted due to uniformed service.
Once this position is determined, the employer
may have to consider several factors before
determining the appropriate reemployment
position . . . . Such factors may include the
employee's length of service, qualifications,
and disability, if any. The reemployment
position may be either the escalator position;
the pre-service position; a position
comparable to the escalator or pre-service
position; or, the nearest approximation to one
of these positions.
Id. § 1002.192 (emphasis added).
The escalator does not run in only one direction.
Depending on the particular employee's (and the employer's)
circumstances, "the escalator principle may cause an employee to be
reemployed in a higher or lower position, laid off, or even
terminated." Id. § 1002.194. In some cases, for example, the
escalator principle could deliver an employee into "layoff status"
if the "employee's seniority or job classification would have
resulted in the employee being laid off during the period of
service, and the layoff continued after the date of reemployment."
Id.
In designing its final rules implementing USERRA, the
Department of Labor considered whether the escalator principle
applies to promotions based on an employer's discretion. During
the comment period following the Department's issuance of the
proposed regulations in 2004, an employer association suggested
that in cases involving promotion based on employer discretion, 20
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C.F.R. § 1002.1928 would require employers "to speculate whether a
returning employee would have (1) sought the promotion in the first
instance and (2) have been chosen over the successful candidate."
70 Fed. Reg. 75,246-01, 75,271 (internal quotation marks omitted).
Similarly, the Department received a comment from a human resources
consulting firm arguing that "[b]ecause most employees are promoted
based on demonstrated ability and experience, rather than length of
service, the escalator principle cannot operate even-handedly for
all employees. The escalator principle is appropriate only in
workforces where pay increases and promotions occur automatically
. . . rather than for achievement or merit." Id. (internal
quotation marks omitted).
The Department unambiguously rejected these suggestions.
It stated that sections 1002.191 and 1002.192 "incorporate[] the
reasonable certainty test as it applies to discretionary and non-
discretionary promotions," and that these rules "promote[] the
application of a case-by-case analysis rather than a rule that
could result in the unwarranted denial or promotions to returning
service members based on how the promotion was labeled rather than
whether or not it was 'reasonably certain.'" Id. The Department
therefore declined to alter the regulations to indicate that
8
The proposed section 1002.192 to which the comments were
directed is functionally identical to the version that the
Department ultimately adopted.
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discretionary/non-automatic promotions would not be subject to the
escalator principle and the reasonable certainty test.
Finally, we note that USERRA affords broad remedies to a
returning servicemember who is entitled to reemployment. For
example, 20 C.F.R. § 1002.139 unequivocally states that "[t]he
employer may not . . . refuse to reemploy the employee on the basis
that another employee was hired to fill the reemployment position
during the employee's absence, even if reemployment might require
the termination of that replacement employee." Additionally,
USERRA grants courts "full equity powers . . . to vindicate fully
the rights or benefits" of veterans seeking reemployment. 38
U.S.C. § 4323(e) (emphasis added); see Serricchio v. Wachovia Sec.
LLC, 658 F.3d 169, 193-94 (2d Cir. 2011) (approving district
court's use of its equitable powers to craft an appropriate
remedy).
B. The District Court's USERRA Analysis
The district court held that Rivera's attempt to invoke
the escalator principle was improper because "[a]n escalator
position is a promotion that is based solely on employee seniority.
. . . [and] does not include an appointment to a position that is
not automatic, but instead depends on the employee's fitness and
ability and the employer's exercise of discretion." Dist. Ct. Op.
at 17-18 (citation omitted) (internal quotation marks omitted). In
concluding that the escalator principle and the reasonable
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certainty test do not apply to non-automatic promotions, the
district court relied primarily upon McKinney v. Missouri-Kansas-
Texas Railroad Co., 357 U.S. 265 (1958), a case in which the
Supreme Court interpreted the Universal Military Training and
Service Act of 1951.9 There the Court held that a returning
veteran seeking reemployment "is not entitled to demand that he be
assigned a position higher than that he formerly held when
promotion to such a position depends, not simply on seniority or
some other form of automatic progression, but on the exercise of
discretion by the employer." Id. at 272. Accordingly, the
district court found that "the purpose of the escalator principle
is to 'assure that those changes and advancements that would
necessarily have occurred simply by virtue of continued employment
will not be denied the veteran because of his absence in the
military service,'" Dist. Ct. Op. at 18 (quoting McKinney, 357 U.S.
at 272) (emphasis added), and that the principle therefore had no
applicability to the facts of Rivera's case.
In citing the precedential authority of McKinney, the
district court failed to consider the subsequently decided Supreme
Court case of Tilton v. Missouri Pacific Railroad Co., 376 U.S. 169
(1964). In Tilton, reemployed veterans claimed that they were
9
The Universal Military Training and Service Act of 1951 is
yet another of the forerunner statutes to USERRA. See generally
Lapine v. Town of Wellesley, 970 F. Supp. 55, 58-59 (D. Mass. 1997)
(tracing evolution of statutes protecting veterans' reemployment
rights).
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deprived of seniority rights to which they were entitled under the
Universal Military Training and Service Act when their employer
assigned them seniority based upon the date that they returned from
military service and completed the training necessary to advance to
the higher position, rather than the date that they would have
completed the training if they had not been called into service.
Id. at 173-74. The Eighth Circuit had relied upon McKinney to deny
the claims, as the promotion at issue "was subject to certain
contingencies or 'variables'" and therefore was not automatic. Id.
at 178-79. The Supreme Court reversed, finding that McKinney "did
not adopt a rule of absolute foreseeability," id. at 179, and that
"[t]o exact such certainty as a condition for insuring a
ve[]teran's seniority rights would render these statutorily
protected rights without real meaning," id. at 180. The Court
concluded that
Congress intended a reemployed veteran . . .
to enjoy the seniority status which he would
have acquired by virtue of continued
employment but for his absence in military
service. This requirement is met if, as a
matter of foresight, it was reasonably certain
that advancement would have occurred, and if,
as a matter of hindsight, it did in fact
occur.
Id. at 181. Read together, McKinney and Tilton suggest that the
appropriate inquiry in determining the proper reemployment position
for a returning servicemember is not whether an advancement or
promotion was automatic, but rather whether it was reasonably
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certain that the returning servicemember would have attained the
higher position but for his absence due to military service. The
Department has certainly adopted this construction of the
regulations and the relevant precedents. See 70 Fed. Reg. 75,246-
01, 75,272 (stating that "general principles regarding the
application of the escalator provision . . . require that a service
member receive a missed promotion upon reemployment if there is a
reasonable certainty that the promotion would have been granted"
(citing Tilton, 376 U.S. at 177; McKinney, 357 U.S. at 274)); see
also 20 C.F.R. § 1002.191. We accord this interpretation
substantial deference. See Massachusetts v. U.S. Nuclear
Regulatory Comm'n, 708 F.3d 63, 73 (1st Cir. 2013) (citing Auer v.
Robbins, 519 U.S. 452, 461 (1997)).
The district court also misinterpreted the regulations
governing USERRA. For instance, the court cited 20 C.F.R.
§ 1002.191 for the proposition that the escalator principle "is
intended to provide the employee with any seniority-based
promotions that he would have obtained 'with reasonable certainty'
had he not left his job to serve in the armed forces." Dist. Ct.
Op. at 17 (emphasis added). However, nothing in section 1002.191
suggests that the escalator principle is limited to "seniority-
based promotions." Furthermore, the next section states that "[i]n
all cases, the starting point for determining the proper
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reemployment position is the escalator position." 20 C.F.R.
§ 1002.192 (emphasis added).
The court also cited section 1002.213 in support of its
conclusion that "[a]n escalator position is a promotion that is
based solely on employee seniority." Although sections 1002.210-
.213 specifically address "seniority rights and benefits," and make
clear that the reasonable certainty test and escalator principle
apply to promotions that are based on seniority, these sections do
not limit the application of the reasonable certainty test and the
escalator principle to seniority-based promotions.
Finally, the district court misinterpreted the Department
of Labor's commentary on the proposed regulations. In its order on
Rivera's motion for reconsideration, the court stated that "[t]he
commentary merely emphasizes . . . that the final rule is designed
to avoid relying on whether or not the employer has labeled the
position as 'discretionary.'" However, the commentary does much
more than that: it unambiguously states that "[s]ections 1002.191
and 1002.192 . . . incorporate[] the reasonable certainty test as
it applies to discretionary and non-discretionary promotions." 70
Fed. Reg. 75,246-01, 75,271.
Pfizer attempts to save the district court from its
error, stating that, despite its broad language, the district court
actually applied the reasonable certainty test and determined as a
matter of law that it was not reasonably certain that Rivera would
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have attained the API Team Leader position. That position has no
grounding in the district court's analysis. In its decision on
Pfizer's motion for summary judgment, the district court emphasized
throughout that any promotion to the API Team Leader position was
non-automatic, and therefore not subject to the escalator principle
and the reasonable certainty test. There was a similar emphasis in
the district court's decision on Rivera's motion for
reconsideration. The court only engaged the evidence in the
summary judgment record to determine that the promotion was in fact
discretionary.
Because the district court erred in finding that the
escalator principle and the reasonable certainty test apply only to
automatic promotions, and because the court did not apply those
legal concepts to Rivera's claim, the district court's grant of
summary judgment cannot stand. The court's analysis of Rivera's
claim to the API Team Leader position was premised on its
fundamental misapprehension of the correct legal standard, which in
turn compromised its view of the evidence. We prefer to have the
district court decide in the first instance if the summary judgment
record reveals genuine issues of material fact on the question of
whether it is reasonably certain that Rivera would have been
promoted to the API Team Leader position if his work at Pfizer had
not been interrupted by military service. We therefore remand to
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the district court for reconsideration of the motion for summary
judgment in light of the correct legal standard.10
III.
For the foregoing reasons, we vacate the portion of the
judgment appealed from relating to Rivera's reemployment claim and
remand to the district court for proceedings consistent with this
opinion. We do not retain jurisdiction. Costs to appellant.
So ordered.
10
When reconsidering Pfizer's motion for summary judgment on
remand, the district court should be mindful that USERRA's "changed
circumstances" defense is an affirmative defense on which the
employer bears the burden of proof. See 38 U.S.C. § 4312(d); 20
C.F.R. § 1002.139(d) ("The employer defenses included in this
section are affirmative ones, and the employer carries the burden
to prove by a preponderance of the evidence that any one or more of
these defenses is applicable."). As the United States points out
in its amicus brief, the opinion of the district court did not
suggest an awareness of this principle. See United States Br. at
10-11.
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