Kevin Ziober says he was illegally fired because he served in Afghanistan. His employer is forcing him to take his complaint to binding arbitration, rather than to court.
Kevin Ziober’s last day at the office started with a sheet cake. A red and blue American flag was iced on the top with tiny, sugary stars, and the inscription read, "Best Wishes Kevin." He remembers co-workers stood up to give him a round of applause, and his office was decorated with camouflage netting.
"I was humbled by the outpouring of support," Ziober said of the early 2013 surprise party. As a Navy Reserve Lieutenant, he was headed to Afghanistan for a year-long deployment.
Ziober would have to be gone from his civilian job at BLB Resources, a federal contractor in Irvine that manages and sells foreclosed properties.
When he first told his bosses about his mobilization orders, Ziober said they were supportive.
A few hours after the celebration, however, he got a call from his HR manager. Ziober walked into a meeting to see the owners of the company and his managers, who said BLB Resources was letting him go. His job would not be available when he got back from Afghanistan.
At the time, Ziober assumed federal law shielding service members from job discrimination was on his side. But he had another surprise waiting for him: BLB Resources had a binding arbitration agreement, signed by every employee, that would prevent the case from going to court.
Warrior and civilian
Members of the National Guard and Reserve like Ziober straddle the military and civilian worlds. They may be pulled away from their civilian jobs for weekend drills and annual trainings. Deployments can be unpredictable and stretch many months.
A specific federal anti-discrimination law, the Uniformed Services Employment and Reemployment Rights Act (USERRA) , is meant to protect veterans, National Guard, and reserve members from losing their civilian jobs because of military service.
But the law is running into a new workplace reality. A growing number of employers require workers to sign binding contracts agreeing to settle discrimination cases and other disputes outside the court system.
Why Ziober lost his job is the subject to ongoing litigation. BLB Resources did not agree to an interview, but said in a statement the company had decided over a year earlier to leave Ziober off the proposed staffing list for a new federal contract because of subpar performance. BLB said the contract Ziober was working on was expiring while he was deployed.
Ziober disputes this, saying his job performance was never brought up when he was let go.
He said it was tough heading overseas with no steady paycheck to return to, but he assumed USERRA was on his side.
"They made everybody sign it"
Passed in 1994, USERRA requires employers to reinstate members of the armed forces to the jobs they held before being called up to military service. It also protects service members’ access to employer-based healthcare, pension, and benefits, and bans workplace discrimination on the basis of military affiliation.
"It’s loosely based upon a statute like Title 7 of the Civil Rights Act that was intended to prevent race discrimination," said Michael Foreman, who directs Penn State's Civil Rights Appellate Clinic and works on USERRA cases.
"The idea is, if we have a service person that is serving this country, their employment rights shouldn’t be jeopardized," Foreman said
Ziober believed this protection gave him the right to sue BLB Resources for violating USERRA and for wrongful termination. When he returned from Afghanistan in early 2014, he filed a complaint in federal district court in Orange County.
The complaint was short-lived. BLB countered with a motion to compel arbitration, bringing Ziober’s USERRA claim to a halt.
BLB laid the groundwork for this back in 2010, when the company required employees, including the newly hired Ziober, to sign an arbitration agreement.
"It really isn’t a negotiation. Are you going to call the company’s bluff and say, 'I'm not going to sign it?'" Ziober said. "They made everybody sign it."
The judge agreed that BLB had the right to move the dispute to arbitration. The case was dismissed.
Ziober’s legal team then took the case to the U.S. 9th Circuit Court of Appeals, where BLB attorney Lonnie Giamela spoke before a 3-judge panel in a hearing last July, emphasizing the company’s history of hiring servicemembers and support for the anti-discrimination provisions of USERRA.
"BLB resources is very grateful for the service that Lt. Ziober and our servicemen and women give to our country on a daily basis," Giamela said.
"An un-American thing?"
Employer advocates argue arbitration agreements are more efficient than lawsuits.
But arbitration is generally confidential, which means information about the case can’t be shared or create precedent for future disputes. There isn’t the same level of discovery allowed, depositions can be limited, and there’s no appeals process. In many arbitration agreements, employees can’t join together in a class-action lawsuit against a company.
"It’s essentially a secret court where you can’t appeal the decisions and you’ve got one or two hands tied behind your back to prove your case," said Ziober’s attorney, Peter Romer-Friedman. "It’s really an un-American thing when it’s forced."
"I think we can all agree if any group should be free to litigate their claims in federal or state court, and ensure that the public knows about these problems that are facing our service members, it’s the service member and veteran community," Romer-Friedman said.
Judges on the 9th Circuit ultimately ruled against Ziober, rejecting his appeal to litigate his USERRA case in court.
Judge Mary Helen Murguia acknowledged in the July 2016 hearing there is a possibility Congress wanted to shield members of the armed forces from binding arbitration.
"It does seem that both the Supreme Court and our court have suggested that we should construe any ambiguities regarding veterans reemployment rights and statutes in favor of the veteran," she said. "It seems like this should distinguish this case."
But the court decided this intention was not directly expressed in the statute and dismissed the case last October.
"It is becoming the standard"
Ziober’s case mirrors the situation for a growing number of non-union civilian employees.
Michael Foreman of Penn State sees mandatory arbitration agreements coming to dominate workplaces nationwide.
"It is becoming the standard rather than the exception," Foreman said. "And in most of these situations, the individual doesn’t have a lot of choice."
A Loyola Law School study released in September reported 80 percent of Fortune 100 companies have used arbitration agreements to deal with workplace disputes.
Earlier this month, the Supreme Court began its new fall term hearing arguments in three cases involving unpaid overtime. Workers in these cases want to join a class action lawsuit, but the companies argue the hiring agreements employees signed included a requirement to go to individual arbitration.
The Supreme Court signaled over the summer it would not hear Kevin Ziober’s appeal. After a fight lasting more than three years, Ziober’s case will soon end in a closed arbitration.
He worries this will put him under a cone of silence, without setting a precedent for future Guard and reserve members who face problems with their civilian employment.
"I’m hoping to be victorious, but if I am, it can’t serve as any kind of deterrent for other companies who are doing this type of thing," Ziober said.
He said it took 18 months to find a new job in his field when he got back from Afghanistan, and he doesn’t want other reservists to face the same uncertainty.
In the remaining time Ziober is legally allowed to discuss the case, he is pushing for a legislative fix to clarify USERRA protections.
A bipartisan group in Congress has introduced a bill to nullify binding arbitration agreements between employers and members of the military.
"This is not a partisan issue. This is an American issue," Ziober said. "A strong USERRA allows reservists who make a big part of our national defense to go serve without making a sacrifice and choice between paycheck or serving [their] country."
The Justice for Servicemembers Act is currently in the House Veterans Affairs Subcommittee on Economic Opportunity.
The Chamber of Commerce opposes the bill, arguing that it’s "intended to profit trial lawyers."
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