Deployed Soldier Gets Right to Sue Former Employer After Sale of Company

Federal case law summary by Attorney Richard Clem: Uniformed Services Employment and Reemployment Rights Act (USERRA).

Jonathan Dorris v. TXD Services, LP. Uniformed Services Employment and Reemployment Rights Act (USERRA)

Jonathan Dorris was a member of the Arkansas Army National Guard and worked for TXD Services, LP, near Morrilton, Arkansas. In April 2007, he received notification that he would be mobilized within the next six months. He notified his employer and asked whether TXD would make up his difference in salary while deployed. He was told by the managing partner that he wouldn't be paid. He continued working until September and reported for duty on October 1. He then served on active duty for about 12 months in 2008.

Shortly after reporting for duty, Dorris received a letter from TXD's benefits administrator stating that he was eligible for COBRA benefits. This letter stated that the letter was the result of "termination of employment." His wife informed him of this letter, and he called the company. He was told that he had been "terminated for not showing up for work."

While Dorris was in Iraq, TXD sold all of its assets to Foxxe Energy Holdings, LLC, which continued TXD's operations. After this sale, TXD ceased operating as a going business. Part of the sale contract included a list of all current employees, and stated that Foxxe "will use reasonable efforts to offer employment" to those employees. Foxxe did hire all of TXD's employees, and no unemployment claims were ever filed as a result of the sale.

The Army sent a letter to Foxxe regarding the "unsettling situation".

When Dorris returned home from deployment, he contacted TXD and Foxxe about getting his job back. Foxxe eventually rehired him in April 2009.

In November, 2010, Dorris filed a lawsuit against TXD for violating his rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. chapter 43 for firing him. In this lawsuit, filed in the U.S. District Court in Arkansas, Dorris did not specify in his complaint any particular section of the Act. The District Court dismissed the lawsuit. First of all, it held that Dorris had no claim for failure to rehire, and Dorris did not appeal this part of the dismissal.

The District Court also held that Dorris had no claim for not being included on the list of current employees that was sent to Foxxe. The lower court reasoned that since Dorris was not a current employee, there was no obligation under USERRA to include his name on a list of current employees. The court also based its ruling on the fact that Dorris had "not offered any evidence that TXD allowed employees on leave of absence or furlough to remain on any list of TXD's active or current employees."

For these reasons, the district court granted TXD's motion for summary judgment, and Dorris appealed to the U.S. Court of Appeals for the Eighth Circuit in St. Louis.

The Court of Appeals reversed, because it concluded that the district court had misallocated the burden of proof. The Court of Appeals first noted that USERRA requires employers to give employees on active duty the same rights and benefits as employees who are on furlough for other reasons. The Court of Appeals concluded that being placed on the list of employees could have been a been one such benefit. And there was no evidence, one way or another, of whether employees who were on leave for reasons other than military service would have been excluded from the list. The District Court dismissed the case because Dorris did not offer this evidence.

The Court of Appeals held that this incorrectly allocated the burden of proof. The court held that TXD had the burden of proof to show that it would have taken the same actions for employees furloughed for other reasons. Since there was no evidence one way or another, the Court of Appeals held that this was an issue of material fact, and that summary judgment was improper for that reason.

For these reasons, the Court of Appeals reversed the grant of summary judgment and sent the case back to the District Court for further proceedings.

No. 12-3096 (8th Cir. Feb. 27, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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