Serricchio v. WACHOVIA SECURITIES LLC

10-1590-cv
Serricchio v. Wachovia Securities, LLC

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
____________________

August Term, 2010

(Argued: June 20, 2011 Decided: September 13, 2011)

Docket No. 10-1590-cv
____________________

MICHAEL SERRICCHIO,

Plaintiff-Appellee,

-v-

WACHOVIA SECURITIES LLC,

Defendant-Appellant,

PRUDENTIAL SECURITIES, INC.,

Defendant.*

_____________________

Before: POOLER and WESLEY, Circuit Judges, KOELTL, District Judge.**

Appeal from three orders of the United States District Court for the District of

Connecticut (Arterton, J.), issued during the pendency of an action commenced under the

Uniformed Services Employment and Reemployment Rights Act (“USERRA”), by Appellee

Michael Serricchio, a member of the United States Air Force Reserve.

The first order denied summary judgment to Appellant Wachovia Securities LLC on the

*
The Clerk of the Court is directed to conform the caption in accordance herewith.
**
Honorable John G. Koeltl of the United States District Court for the Southern District
of New York, sitting by designation.
ground that Serricchio’s request for reinstatement to his prior employment position following a

period of active military duty was adequate as a matter of law under USERRA. See Serricchio v.

Wachovia Sec., LLC, 556 F. Supp. 2d 99 (D. Conn. 2008). The second order was issued

following a bench trial on damages, after a separate and prior proceeding in which a jury found

Wachovia liable for violating USERRA by failing to reemploy Serricchio “promptly” in a

position of like “seniority, status and pay” as required by the statute. See Serricchio v. Wachovia

Sec., LLC, 606 F. Supp. 2d 256 (D. Conn. 2009). That order is appealed only insofar as the

district court (a) found that Wachovia had willfully violated USERRA and thus awarded

liquidated damages in an amount equal to the backpay award, which was $389,453, and (b)

authorized equitable relief distinct from the backpay award in the form of ordering Wachovia to

reinstate Serricchio to a financial advisor position with a fixed salary for three months while he

regained his broker’s licenses, to be followed by a nine-month period in which Serricchio would

receive a fixed “draw” to be offset by any commissions he earned during that time, as he rebuilt

his book of business. The third order denied, in relevant part, Wachovia’s post-trial motions for

judgment as a matter of law, or in the alternative, for a new trial. See Serricchio v. Wachovia

Sec., LLC, 706 F. Supp. 2d 237 (D. Conn. 2010).

Because we find no error in the district court’s thoughtful and well-reasoned opinions, we

affirm.

AFFIRMED.

____________________

DAVID S. GOLUB, Jonathan M. Levine, Marilyn J. Ramos, Craig
N. Yankwitt, Silver, Golub & Teitell LLP, Stamford, CT, for
Plaintiff-Appellee.

2
DAVID BENNET ROSS, Devjani Mishra, Brian D. Murphy,
Seyfarth Shaw LLP, New York, NY, for Defendant-Appellant.

M. PATRICIA SMITH, Solicitor of Labor, Office of the Solicitor,
United States Department of Labor, Thomas E. Perez, Assistant
Attorney General, United States Department of Justice, Dennis J.
Dimsey, Erin Aslan, Attorneys, Appellate Section, Civil Rights
Division, Untied States Department of Justice, Washington, D.C.,
for Amicus Curiae, Secretary of the United States Department of
Labor.

POOLER, Circuit Judge:

This is an appeal from three orders of the United States District Court for the District of

Connecticut (Arterton, J.): (1) denying summary judgment to Appellant Wachovia Securities

LLC (“Wachovia”)1 on the ground that Appellee Michael Serricchio had adequately requested

reinstatement to his prior employment position following a period of active military duty; (2)

awarding liquidated damages, in an amount equal to the award of backpay, which was $389,453,

and granting equitable relief to Serricchio following a bench trial on damages after a jury found

Wachovia liable for violating the Uniformed Services Employment and Reemployment Rights

Act (“USERRA”) in failing to reemploy Serricchio “promptly” to a position of like “seniority,

status and pay” following his military service; and (3) denying Wachovia’s motion for judgment

as a matter of law, or, in the alternative, for a new trial.2

Michael Serricchio, a member of the United States Air Force Reserve, was employed by

1
Serricchio commenced this action against both Prudential Securities LLC and
Wachovia, which merged with Prudential in July 2003. The post-merger entity was known as
Wachovia, and we therefore refer to Serricchio’s employer as Wachovia throughout.
2
Serricchio filed a cross-appeal in connection with this matter, see Case No. 10-1892-cv,
that was later withdrawn.

3
Wachovia as a financial advisor. In the wake of September 11, 2001, Serricchio was called to

active duty. After serving his country, Serricchio requested reemployment at Wachovia, as he

was entitled to do under USERRA. Wachovia failed to reemploy Serricchio for a term of nearly

four months after he requested reinstatement and ultimately offered Serricchio a reemployment

position that set his compensation at the commission rate he had received prior to activation but

without regard to the sizable book of business he had established in the months before his

military service. A jury found that Wachovia’s actions violated USERRA, because the bank

failed to reemploy Serricchio “promptly” and because the reemployment position offered to

Serricchio was not of equivalent “seniority, status and pay” to his pre-service position. The

district court held a separate bench trial on damages, after which it ordered Wachovia to reinstate

Serricchio with a fixed salary for three months during which time he was to undergo training to

regain his broker’s licenses. The district court later denied Wachovia’s post-trial motions, and

Wachovia appealed.

Although this case presents a number of issues of first impression for this and other

courts, two predominate. First, we must decide whether USERRA requires an employer, who

compensated a servicemember on a commission basis prior to his activation, to consider the size

of the servicemember’s pre-activation book of business in determining the appropriate post-

service reemployment position. USERRA guarantees servicemembers a position of like

“seniority, status, and pay” upon their return from active duty. See 38 U.S.C. § 4313(a)(2)(A).

Is a reemployment position that provides the same commission rate (i.e., the same fixed

percentage on accounts serviced), without regard to the volume or size of the accounts in the

servicemember’s pre-activation book of business, sufficient to satisfy USERRA, as a matter of

4
law? The district court concluded that it was not, and the Secretary of the United States

Department of Labor, charged with promulgating regulations under the statute, see 20 C.F.R. §

1002.2, has submitted a letter amicus curiae advancing the same conclusion. For reasons

discussed in full detail below, we agree.

Second, we must decide whether it was an abuse of discretion for the district court to

award Serricchio reinstatement to his prior financial advisor position with a fixed salary, even

though his pre-service compensation was wholly commission-based. On this point, we note that

where, as here, a jury has returned a verdict in favor of the servicemember, the statute authorizes

a district court to use its “full equity powers . . . to vindicate fully the rights of” veterans. 38

U.S.C. § 4323(e) (emphasis added). Wachovia has identified no evidence overlooked, or legal

precedent misinterpreted, that would lead us to the conclusion that the district court abused its

discretion in fashioning the terms of Serricchio’s reinstatement.

Accordingly, we affirm the orders of the district court in their entirety.

The Uniformed Services Employment and Reemployment Rights Act (“USERRA”) is the

“latest in a series of laws protecting veterans’ employment and reemployment rights going back

to the Selective Training and Service Act of 1940.” 20 C.F.R. § 1002.2. USERRA’s immediate

predecessor, which was enacted as part of the Vietnam Era Veterans’ Readjustment Assistance

Act of 1974, was commonly referred to as the Veterans’ Reemployment Rights Act. See id. In

enacting USERRA, Congress made clear that the statute should be thought of as an extension of

existing law—not an entirely new piece of legislation supplanting the body of case law that had

developed around veterans’ rights. See id. (noting that “federal laws protecting veterans’

5
employment and reemployment rights for the past fifty years ha[ve] been successful and that the

large body of case law that ha[s] developed under those statutes remain[s] in full force and

effect, to the extent it is consistent with USERRA”). The purpose of USERRA is to encourage

military service “by eliminating or minimizing the disadvantages to civilian careers”; “to

minimize the disruption to the lives” of servicemembers and their employers “by providing for

the prompt reemployment” of servicemembers; and “to prohibit discrimination” against

servicemembers. 38 U.S.C. § 4301(a).

USERRA provides in relevant part that servicemembers called away to military service

“shall be promptly reemployed” by their former employers upon completion of a period of

service in the armed forces. 38 U.S.C. § 4313(a) (emphasis added). In order for this guarantee

to apply, the servicemember must “notify the employer . . . of the person’s intent to return to a

position of employment with such employer . . . by submitting an application for reemployment

with the employer not later than 90 days after the completion of the period of service.” 38

U.S.C. § 4312(e)(1)(D).

The Supreme Court has explained that reemployment protections for servicemembers are

“to be liberally construed for the benefit of those who left private life to serve their country . . . .”

Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 285 (1946) (discussing the

Selective Training and Service Act of 1940). Consistent with this directive, we have held that

where a returning servicemember’s application for reinstatement puts the employer “on ample

notice of his claim” to reemployment, any “technical failure[s]” in the form of the application

will not prevent a rehiring mandate from binding the employer. Martin v. Roosevelt Hosp., 426

F.2d 155, 159 (2d Cir. 1970); accord 20 C.F.R. § 1002.118 (“An application for reemployment

6
need not follow any particular format.”). Indeed, the regulations provide that an “employee is

permitted but not required to identify a particular reemployment position in which he or she is

interested.” 20 C.F.R. § 1002.118.

Section 4316(a) of USERRA entitles a returning servicemember to “the seniority and

other rights and benefits determined by seniority that the person had on the date of the

commencement of service in the uniformed services plus the additional seniority and rights and

benefits that such person would have attained if the person had remained continuously

employed.” 38 U.S.C. § 4316(a) (emphasis added); 38 U.S.C. § 4313(a)(2)(A) (stating that a

servicemember whose period in service exceeds 90 days is entitled to reemployment “in the

position of employment in which the person 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”).

USERRA’s regulations explain that this means that “[a]s 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.” 20 C.F.R. § 1002.191. This position is referred

to as the “escalator position.” Id. The “escalator position” may require that the returning

servicemember be promoted as part of the reemployment package. Id. It can also lead to

demotion or transfer, depending upon any intervening events during the servicemember’s period

of active duty. Id.

Setting aside intervening circumstances that would justify a downward departure in a

returning servicemember’s reemployment position, USERRA makes clear that the critical

question is whether the reemployment position offered—if not the same job the servicemember

7
would have had but for the period of service—is of “like seniority, status and pay” to that

position. 38 U.S.C. § 4313(a)(2)(A). In determining whether the position is of similar “status,”

an employer can consider the employee’s “opportunities for advancement, general working

conditions, job location, shift assignment, rank, responsibility, and geographical location.” 20

C.F.R. § 1002.193(a). The regulations further provide that regardless of whether a

servicemember is employed in the “pre-service position,” “another position” or in the “escalator

position,” the “rate of pay must be determined by taking into account any pay increases,

differentials, step increases, merit increases, or periodic increases that the employee would have

attained with reasonable certainty had he or she remained continuously employed during the

period of service.” 20 C.F.R. §§ 1002.236(a)&(b).

Once a violation of USERRA has been found, the statute provides that “[t]he court shall

use, in any case in which the court determines it is appropriate, its full equity powers, including

temporary or permanent injunctions, temporary restraining orders, and contempt orders, to

vindicate fully the rights or benefits of persons under this chapter.” 38 U.S.C. § 4323(e).

Michael Serricchio, an Air Force reservist, was employed as a financial advisor at

Wachovia in its Stamford, Connecticut office. During the 11 months prior to his activation,

Serricchio opened more than 130 client accounts, and, together with his partner, Joseph Zinicola,

was servicing more than $9.4 million in assets. Because some of Serricchio’s accounts were

jointly administered with partners, including Zinicola, the actual share of the assets under his

management was closer to $4.1 million. Serricchio’s accounts generated more than $12,000 in

8
monthly gross revenues, and Serricchio was earning more than $75,000 in annualized net

commissions.

Serricchio was called to active duty in the wake of September 11, 2001, at which point

Zinicola assumed responsibility for servicing Serricchio’s transactional clients. At trial,

Serricchio argued that Lawrence Meyers, a First Vice President of the Westport branch of the

bank, was hostile to the arrangement between Serricchio and Zinicola, and took certain steps to

cripple Zinicola’s ability to manage Serricchio’s accounts. Wachovia argued that the actions

identified by Serricchio were really part of a firm-wide transition away from commission-based

transactions, toward a fee-based business model. As part of this move, Wachovia created a

“national call center” that was designed to handle accounts with balances of $25,000 or less. As

of the date when Serricchio was activated, he and Zinicola were responsible for 142 accounts

that were eligible to be sent to the call center.

During Serricchio’s period of active duty, he and Zinicola agreed that Zinicola would

partner with another financial advisor, Frank Murgalo, who would assist in managing

Serricchio’s accounts. Zinicola, however, was terminated on April 13, 2003, for misconduct

relating to a compliance violation. Once he obtained new employment, he took three of the

largest accounts with him to his new employer. These accounts were among those he managed

with Serricchio. The remaining accounts were assigned to Murgalo, but he resigned and joined a

competitor firm less than a month after Zinicola’s departure. Following Murgalo’s departure,

Serricchio’s remaining accounts were assigned to various advisors in the branch.

Wachovia’s military leave policy, which governed Serricchio’s absence and eligibility

9
for reemployment, mirrors USERRA’s statutory language. It provides in relevant part that an

employee who takes military leave is “eligible for reemployment in the job [he] would have had

if [he] had not been absent for military service, with the same seniority, pay and benefits.”

Wachovia argues that this policy, and by extension USERRA, “provides [only] that an advisor

who takes military leave will be returned to work at the same commission scale that he worked at

prior to the leave, along with an initial monthly draw.” That is, Wachovia argues that its

obligation to a returning servicemember employed in a straight commission job is only to

provide the same commission structure, without reference to the broker’s prior book of business,

upon the servicemember’s return from active duty.

Serricchio was honorably discharged in October 2003, at which point he consulted with

an attorney regarding his rights under USERRA. He then sent a letter to Wachovia, through his

attorney, dated December 1, 2003, requesting, among other things, reinstatement. The letter

stated that Serricchio’s “ability to resume his position and regain his prior earnings level ha[d]

been severely impaired” by Wachovia’s actions during his absence, which caused Serricchio to

“face[ ] immediate and long-term career damage[ ].” The letter further requested that the matter

be forwarded to Wachovia’s counsel “for discussion of appropriate ways in which Mr.

Serricchio’s return to work [could] be implemented.”

On January 26, 2004, nearly two months later, Wachovia first responded to Serricchio’s

letter; an Employee Relations Specialist, Ken Rotondo, telephoned Serricchio. The parties

disagree about the purpose of the call, but agree that Serricchio referred Rotondo to his attorney.

On March 31, 2004, Serricchio reported to Wachovia’s Westport office to begin work. When

10
Serricchio arrived, Lawrence Meyers, the branch manager, was not present and Serricchio

instead spoke with the Branch Administrator, Carson Coyle. At that time, Coyle provided

Serricchio with lists of those accounts still remaining that Serricchio had serviced in the past.

Serricchio reviewed these lists and then communicated to Coyle that the list he had provided

would generate virtually no commissions. Coyle told Serricchio he needed to speak with Meyers

regarding the client lists.

Serricchio had a subsequent meeting with Meyers, in which Meyers told him that

Wachovia would pay him a state-mandated $2000 monthly draw while he rebuilt his book of

business. Wachovia contends that Serricchio would not have been required to repay this draw if

his commission earnings had been less than the draw; however, Serricchio testified that Meyers

told him he would be required to repay the draw regardless. At that time, Wachovia offered

Serricchio no additional assistance in rebuilding his book of business, even though, as Serricchio

testified, the bank could have arranged for him to partner with other brokers who had large

accounts, could have offered him an interim salary while he rebuilt his book of business or could

have offered him accounts opened from unsolicited new client calls. Instead, Wachovia offered

him the opportunity to make “cold calls” to rebuild his book of business, a task he had not been

required to undertake since the early days in his career.

A jury returned a verdict in favor of Serricchio on June 17, 2008, finding that Wachovia’s

actions constituted a violation of USERRA insofar as the bank (1) failed to offer him prompt

reinstatement in failing to reinstate him by December 18, 2003; (2) failed to reinstate him to a

position of employment as required by USERRA; and (3) constructively discharged him by

11
failing to offer him an adequate reemployment position or respond to the problems with the

reemployment position that Serricchio had communicated to Wachovia. Following a bench trial

on the issues of damages and equitable relief, on March 19, 2009, the district court awarded

Serricchio backpay in the amount of $389,453, and liquidated damages in the same amount

(based upon a finding that the USERRA violation was willful). See Serricchio v. Wachovia Sec.,

LLC, 606 F. Supp. 2d 256, 268 (D. Conn. 2009). The court also exercised its equitable powers to

order Wachovia to reinstate Serricchio as a financial advisor and to offer him a salary of $12,300

per month for three months, while he regained his broker’s licenses. The court further ordered

Wachovia to pay Serricchio a monthly “draw” of $12,300 for the following nine months, to be

offset against any commissions he would take in during that period.

Wachovia moved for judgment as a matter of law, or, in the alternative, a new trial.

Wachovia argued in relevant part that it had complied with USERRA by offering Serricchio

reemployment as a financial advisor at the same “rate of pay”—that is, the same commission rate

he received before he was activated. On March 31, 2010, the district court denied Wachovia’s

post-trial motions, calculated the amount of pre-judgment interest, and awarded attorneys’ fees

and costs. Serricchio v. Wachovia Sec., LLC, 706 F. Supp. 2d 237 (D. Conn. 2010). The district

court found that the evidence at trial was sufficient to allow the jury to conclude that Wachovia

had violated USERRA when it made Serricchio “a reinstatement offer that a reasonable person

could regard as financially precarious and professionally degrading.” Id. at 249-50. On May 5,

2010, Wachovia appealed to this Court.

12
During the pendency of this appeal, we invited the Secretary of the United States

Department of Labor to submit a letter regarding the Department’s views on an employer’s

obligations under USERRA, where, as here, the servicemember was previously employed solely

on a commission basis. The Secretary did so on July 21, 2011, through a submission signed by

both the United States Department of Labor and the United States Department of Justice. We

consider the views expressed therein for persuasive value. See Skidmore v. Swift & Co., 323

U.S. 134, 140 (1944) (stating that agency interpretations “constitute a body of experience and

informed judgment to which courts and litigants may properly resort for guidance. The weight of

[an agency’s] judgment in a particular case will depend upon the thoroughness evident in its

consideration, the validity of its reasoning, its consistency with earlier and later pronouncements,

and all those factors which give it power to persuade, if lacking power to control.”); New York

State Rest. Ass’n v. New York City Bd. of Health, 556 F.3d 114, 130 (2d Cir. 2009) (affording

Skidmore deference to amicus brief from Food and Drug Administration).

The Department of Labor, in its submission to this Court, takes the position that

Wachovia violated USERRA on the facts of this case by failing to reemploy Serrichio in a

position of like “status” and “pay.” Specifically, the Department of Labor states that “Wachovia

should have determined what Serricchio’s book of business would have been but for his military

service by examining Serricchio’s past performance and how similarly situated financial analysts

fared during his absence, and then offered Serricchio his original and/or comparable client

accounts that corresponded to his ‘escalator position’ book of business.” The Department of

Labor further states that “If, for whatever reason, it was not possible to provide Serricchio with

the appropriate book of business, Wachovia should have taken other steps to restore Serricchio

13
to a position of like ‘pay,’ such as paying him an appropriate interim salary or offering him other

opportunities for additional compensation while he built up his book of business to the requisite

level.” Finally, the Department of Labor explained that “Wachovia also violated USERRA by

failing to offer a reemployment position of like ‘status’ when—instead of offering Serricchio a

book of business that corresponded to his ‘escalator position’—it required him to ‘cold call’ to

rebuild his client accounts. This requirement diminished Serricchio’s level of responsibility, his

position vis-a-vis other employees, and his opportunity for advancement.”

Both parties submitted responses to the Department of Labor’s letter on July 28, 2011.

Serricchio wrote in support of the Department of Labor’s position and further noted that

USERRA contains a safety valve provision in the form of a statutory defense that allows an

employer to avoid the statute’s reemployment obligations, inter alia, “if the employer’s

circumstances have so changed as to make such reemployment impossible or unreasonable,” 38

U.S.C. § 4312(d)(1). Serricchio argues that Wachovia could have invoked this safety valve but

affirmatively chose not to do so, and accordingly, Serricchio maintains that Wachovia has

waived any right to raise any related defense now.

Wachovia’s submission took a different position. Wachovia argued that the authorities

relied upon by the Department of Labor are dated and inapposite. The principal thrust of

Wachovia’s argument was that the Department of Labor places too much stock in cases relating

to commissioned employees operating in limited geographic areas (i.e., returning

servicemembers with exclusive rights to a particular sales territory). Because Serricchio did not

have an assigned “territory,” Wachovia contends that the cases addressing commissions in this

14
context are not helpful in understanding Serricchio’s rights under USERRA.

III

Wachovia raises a number of arguments on this appeal. Wachovia argues first that

the district court erred in denying summary judgment to the company. The company maintains

that Serricchio’s December 1, 2003 letter was not an unconditional demand for reinstatement as

required by USERRA, and therefore, the question of liability under USERRA should never have

been submitted to a jury. Second, Wachovia argues that the district court erred in denying

judgment as a matter of law to Wachovia on two separate claims: (1) Serricchio’s claim that

Wachovia failed to reemploy him in an appropriate position under USERRA; and (2)

Serricchio’s claim that Wachovia constructively discharged him. Third, Wachovia argues that

the district court’s jury instructions contained four errors relating to (1) the calculation of rate of

pay under USERRA, (2) the elevator principle, (3) the definition of seniority based benefits, and

(4) what it means for income to be “reasonably certain” under the statutory framework. Fourth,

Wachovia argues that there were a number of errors in the district court’s damages verdict,

including (1) that the district court reinstated Serricchio to a salaried position, even though he

had not been employed in a salaried position prior to his activation, and (2) that the district court

awarded liquidated damages on the basis that Wachovia’s violation of USERRA was willful, a

finding Wachovia argues was not supported by the evidence. Each argument is discussed in turn

below.

We review an order denying summary judgment de novo, construing the evidence in the

light most favorable to the nonmoving party and drawing all reasonable inferences in that party’s

15
favor. See Okin v. Vill. of Cornwall-on-Hudson Police Dep’t, 577 F.3d 415, 427 (2d Cir. 2009).

Initially, Wachovia argues that the district court erred in failing to grant it summary

judgment because, in Wachovia’s view, Serricchio’s December 1, 2003 letter was not an

unconditional demand for reinstatement. Under USERRA, servicemembers called away to

military service “shall be promptly reemployed” by their former employers upon discharge. 38

U.S.C. § 4313(a). USERRA’s regulations explain that “‘[p]rompt reemployment’ means as soon

as practicable under the circumstances of each case,” but “[a]bsent unusual circumstances

reemployment must occur within two weeks of the employee’s application for reemployment.”

20 C.F.R. § 1002.181 (emphasis added). In order for USERRA’s protections to apply, the

servicemember must “notify the employer . . . of [his] intent to return to a position of

employment with such employer . . . by submitting an application for reemployment with the

employer not later than 90 days after the completion of the period of service.” 38 U.S.C. §

4312(e)(1)(D). In the context of a predecessor law, we have held that where a returning

servicemember’s application for reinstatement puts the employer “on ample notice of his claim”

to reemployment, “technical failure[s]” in the form of the application will not prevent the law’s

rehiring mandate from binding the employer. See Martin v. Roosevelt Hosp., 426 F.2d 155, 159

(2d Cir. 1970).

In Martin, a medical resident was called away to Navy service. Id. at 157. During his

service, he wrote to the hospital where he had been a resident to inquire about the possibility of

returning to his previous position upon his discharge from the Navy. Id. The hospital asked him

to fill out an application, but ultimately told him there was no room in the program. Id. at 157-

58. Martin took another position at a different hospital, with which he quickly became

16
dissatisfied, and he again took up correspondence with the former hospital in an attempt to return

to his residency there. Id. at 158.

During the second round of communications, Martin requested that he be hired as a

second-year resident, even though he had left the hospital when he was a first year resident. Id.

at 158-59. The hospital argued that Martin had not met the requirements of the Selective Service

Act (USERRA’s predecessor), because the first round of communications during which he asked

for reinstatement occurred outside the statutory period for notification (i.e., before he was

discharged), and the second round of communications included no demand for reinstatement. Id.

We rejected the claim that Martin’s second round of communications did not constitute a

demand for reinstatement simply because they requested a position to which he was not entitled

under the statute. Martin’s communications were adequate because, although they demanded a

second-year residency position, they did “not suggest that he was no longer interested in the

first-year residency position if that was the best he could get.” Id. at 159. We concluded that

“[i]t would be out of keeping with the broadly protective purpose of the statute to deny its

benefits because Dr. Martin did not, during the ninety days following discharge, repeat the

request which the hospital had already twice rejected.” Id. We also cited with approval to the

First Circuit’s reasoning in Trusteed Funds, Inc. v. Dacey, 160 F.2d 413 (1st Cir. 1947), in which

the court held that “a veteran does not necessarily lose all his rights under the Act merely

because in applying for reemployment he couples such application with a demand for something

he erroneously believes to be his due.” Martin, 426 F.2d at 159 (internal quotation marks

omitted).

Only two cases have held that an employee’s demand for reinstatement after a period of

17
military service was too ambiguous to meet the requirements of USERRA. The first, Baron v.

United States Steel Corp., 649 F. Supp. 537 (N.D. Ind. 1986), involved a plaintiff who visited his

former employer and notified it that “he was going to try to go to college and that if he did not

succeed in getting admitted to college, he would come back to USX and request work.” Id. at

540. The district court held that this was not an unconditional demand for reemployment, and

therefore, was not effective to trigger the plaintiff’s right to reemployment. Then, in McGuire v.

United Parcel Service, 152 F.3d 673 (7th Cir. 1998), the Seventh Circuit upheld a grant of

summary judgment to a defendant employer under USERRA where the employee had only

casually inquired about the procedures for obtaining reemployment, and when the employer

responded, directing him to contact the HR supervisor, he filed suit instead of acting as

instructed. Id. at 677-78. The court held that the plaintiff’s casual inquiry into the procedures

for obtaining his job was not “an application for reemployment” as required by USERRA. Id. at

678.

Wachovia argues that, as in Baron and McGuire, Serricchio never “unconditionally”

asked for reinstatement. Wachovia bases this argument on the fact that Serricchio asked to be

reinstated in a letter in which he also (1) identified a number of actions he believed Wachovia

had taken in violation of its obligations under USERRA, and (2) grossly overstated the size of

his pre-activation book of business. Wachovia urges us to interpret the letter as a threat of

litigation rather than a reemployment application. However, the letter plainly asked that

Serricchio be reinstated, and the fact that it complained about other actions taken by Wachovia

does not, under relevant law, negate the fact that it included a demand for reinstatement. See

Dacey, 160 F.2d at 422; accord 20 C.F.R. § 1002.118 (“An application for reemployment need

18
not follow any particular format. . . . The application should indicate that the employee is a

former employee returning from service in the uniformed services and that he or she seeks

reemployment with the pre-service employer. The employee is permitted but not required to

identify a particular reemployment position in which he or she is interested.”).

Here, the letter opened by stating that “Michael Serricchio, who has now completed his

active duty service with the United States Air Force . . . seeks reinstatement to his Financial

Advisor position with Wachovia Securities (formerly Prudential Securities)

[“Wachovia/Prudential”] with the full reemployment rights guaranteed by the Uniform Services

Employment and Reemployment Rights Act (“USERRA”), 38 U.S.C. § 4301, et seq.” The letter

then complained of certain “adverse employment actions” taken by Wachovia and provided a list

of such actions. However, the letter also went on to note that the “adverse actions” had

“impaired” Serricchio’s “ability to resume his position and regain his prior earnings level.” And

while the letter requested a meeting with counsel for Wachovia, it did so only in the context of a

“discussion of the appropriate ways in which Mr. Serricchio’s return to work can be

implemented and the harm to Mr. Serricchio addressed.” The letter was plainly not a conditional

request for reemployment; it requested reinstatement in no uncertain terms. Therefore, there is

no question that the district court did not err in denying summary judgment to Wachovia on this

claim. See Serricchio v. Wachovia Sec., LLC, 556 F. Supp. 2d 99 (D. Conn. 2008).

Having concluded that the district court correctly denied Wachovia’s motion for

summary judgment, we move to the district court’s denial of Wachovia’s motion for judgment as

a matter of law, which we review de novo. See Parrot v. Guardian Life Ins. Co. of Am., 338

19
F.3d 140, 142 (2d Cir. 2003).

Wachovia argues first that the district court erred in denying judgment as a matter of

law because the bank did, in fact, offer Serricchio reemployment in “the position most

comparable to the one he would have held if not for his leave,” which is all that USERRA

requires. Specifically, Wachovia argues that Serricchio was offered an identical “rate of pay”: “a

standard monthly minimum draw plus additional compensation that was determined on a 100%

commission basis.” In this context, Wachovia maintains that only “the total amount of pay . . .

changed.” Wachovia further argues that USERRA required only the restoration of “seniority-

based” benefits, and since “[n]either the volume of Serricchio’s pre-leave book of business nor

the commissions he might have earned meets the definition of ‘seniority-based benefits’ . . .

Serricchio could not lay claim to either under USERRA.”

In the first instance, we note that Wachovia’s failure to reply to Serricchio’s letter

requesting reinstatement for nearly two months, coupled with the bank’s failure to actually

reemploy him for nearly four months, created a triable issue of fact regarding whether Wachovia

violated USERRA. See 20 C.F.R. § 1002.181 (“Absent unusual circumstances, reemployment

must occur within two weeks of the employee’s application for reemployment.” (emphasis

added)). Indeed, the jury concluded that Wachovia’s failure to reemploy Serricchio by

December 18, 2003, constituted a violation of Serrichio’s rights under USERRA. Wachovia has

not appealed this portion of the verdict. Thus, the question of whether Wachovia offered

Serricchio suitable reemployment is relevant primarily to the district court’s calculation of

damages—not to the jury’s finding of liability, which was based in part on Wachovia’s failure to

20
offer Serricchio any position of reemployment by December 18.

With respect to the position Wachovia ultimately offered Serricchio in March 2004,

USERRA requires employers to offer returning servicemembers either “the position of

employment in which the person 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). Here, the parties agree that the nature of Serricchio’s straight

commission job was such that the relevant question regarding reemployment is limited to

whether the position Wachovia offered Serricchio was of “like seniority, status and pay.”

In the context of USERRA, “the status of the reemployment position requires the

employer to assess what would have happened to such factors as the employee’s opportunities

for advancement, working conditions, job location, shift assignment, rank, responsibility, and

geographical location, if he or she had remained continuously employed.” 20 C.F.R. § 1002.194.

“The reemployment position may involve transfer to another shift or location, more or less

strenuous working conditions, or changed opportunities for advancement, depending upon the

application of the escalator principle.” Id.

Wachovia argues, albeit for the first time in its reply brief, that the case law interpreting

“status” in the context of USERRA and predecessor statutes limits the relevant question to

whether Serricchio was given a demotion in title upon his return from active duty. In support of

this argument, Wachovia cites Nichols v. Department of Veterans Affairs, 11 F.3d 160, 161 (Fed.

Cir. 1993) (“Chief, Chaplain Services” demoted to “Staff Chaplain”); Trusteed Funds v. Dacey,

21
160 F.2d 413 (1st Cir. 1947) (“Public City Manager” demoted to a “Vice President” role with

different responsibilities in another city); Duarte v. Agilent Technologies, Inc., 366 F. Supp. 2d

1039, 1042 (D. Colo. 2005) (“primary design consultant” demoted to position where he reported

to other “primary design consultants”); and Harris v. City of Montgomery, 322 F. Supp. 2d 1319,

1323-24 (M.D. Ala. 2004) (“Head Coach” demoted to “Assistant Coach”). While these cases

establish that a titular demotion may constitute an actionable alteration in “status” under

USERRA, they do not establish that such a titular demotion is necessary to find that such an

alteration occurred. Rather, the plain language of USERRA makes clear that status must be

assessed with regard to factors beyond mere title or “rank”—employers must also assess the

“employee’s opportunities for advancement, working conditions, job location, shift assignment

. . . responsibility, and geographical location.” 20 C.F.R. § 1002.194.

Here, the evidence indicated that prior to his activation, Serricchio was responsible for

servicing in excess of 130 accounts, and, along with a partner, was responsible for managing in

excess of $9 million dollars. By contrast, Wachovia’s offer for reemployment consisted of

providing Serricchio with a limited number of small accounts, a modest monthly draw that

would be offset by any commissions earned, and opportunities for cold calling clients. As the

district court concluded, these facts were sufficient for a reasonable fact finder to conclude that

the position Serricchio was offered upon his return to Wachovia did not provide the same

opportunities for advancement, working conditions and responsibility that he would have had but

for his period of military service. See Serricchio v. Wachovia Sec., LLC, 706 F. Supp. 2d 237,

245 (D. Conn. 2010). And because judgment as a matter of law may only be granted where there

is a “complete absence of evidence supporting the verdict,” Brady v. Wal-Mart Stores, Inc., 531

22
F.3d 127, 133 (2d Cir. 2008), we conclude the district court committed no error in denying

judgment to Wachovia on this ground.

Wachovia next argues that the district court erred in denying judgment as a matter of law

on the question of whether Serricchio was reinstated at a position with the same “pay” as he

would have received but-for his period of military service. It is undisputed that the

compensation package offered by Wachovia upon Serricchio’s return from active duty—a $2000

per month standard draw to be offset by commissions (paid at his preservice rate), a limited

number of accounts, and an opportunity to make “cold calls” to rebuild his book of

business—would have provided Serricchio significantly less than the approximately $6500 per

month that he earned in commissions prior to his activation.

USERRA’s legislative history states that “pay” is “easily determined,” though the statute

and its regulations offer limited clarification on how that term is to be construed. H.R. Rep. No.

103-65, at 31 (1993), reprinted in 1994 U.S.C.C.A.N. 2449, 2464, 1993 WL 235763. The

commentary to USERRA’s regulations provides that the servicemember is entitled to “any

compensation, in whatever form, that the employee would have received with reasonable

certainty if he or she had remained continuously employed.” Uniformed Services Employment

and Reemployment Rights Act of 1994, 70 Fed. Reg. 75,246, 75,278 (Dec. 19, 2005). In

determining the appropriate pay, an employer may examine the servicemember’s work history,

his “prospects for future earnings,” and the pay of similarly situated employees. 20 C.F.R. §

1002.193(a) (work history and future earnings); see also Loeb v. Kivo, 169 F.2d 346, 351 (2d

23
Cir. 1948) (pay of similarly situated employees).

In the context of a predecessor statute, a number of courts, including this Court, have

held that a servicemember who was previously employed in a commission-based position prior

to activation must be reemployed in a position that provides comparable commission earning

opportunities. For example, in Loeb v. Kivo, 169 F.2d at 351, this Court held that the employer

had failed to offer a returning servicemember salesman a position of like pay, seniority and

status where the servicemember “was kept at work in the stockroom, was given no opportunity

to meet any customers, . . . no time outside the defendants’ offices to solicit business or to seek

familiarity with his old customers, and denied all opportunity of any kind to act as a salesman.”

Id. at 348 (internal quotation marks omitted). In Levine v. Berman, 161 F.2d 386 (7th Cir. 1947),

the Seventh Circuit reached a similar conclusion. That case involved an employer who offered a

returning servicemember reemployment in a different territory and at a different commission rate

than he had received prior to his service. The court held that the offer for reemployment was

deficient in part because the servicemember was not allowed to leverage “his acquaintance and

knowledge of [the prior] territory” into commission generating sales, which resulted in reduced

earnings opportunities. Id. at 388. Finally, in Dacey, the First Circuit held that a reemployment

offer was not of like seniority, status and pay where, among other things, the reemployment

position would have required the servicemember salesman “to start from scratch, recruiting a

sales force, and building up the business in the region assigned.” 160 F.2d at 419. Accord

Whitver v. Aalfs-Baker Mfg., 67 F. Supp. 524, 527 (N.D. Iowa 1946) (reemployment offer “did

not constitute an offer to restore the plaintiff to a position with like pay . . . because the volume

of sales in the proffered territory would be smaller”).

24
More recently, a district court in Massachusetts held that an employer had violated

USERRA because the reemployment “position lacked the sales commissions and other benefits

of plaintiff’s preservice position.” Fryer v. A.S.A.P. Fire & Safety Corp., 680 F. Supp. 2d 317,

326 (D. Mass. 2010). The court explained, “The evidence supports a significant reduction in pay

because . . . the position lacked an adequate opportunity to pursue and procure sales

commissions.” Id.

As the Department of Labor explains at length in its letter to this Court, Fryer and the

other holdings are consistent with the interpretation of the reemployment right that the

Department of Labor has given USERRA’s predecessor statutes, which contained similar

provisions. See, e.g., U.S. Dep’t of Labor, Legal Guide and Case Digest, Veterans

Reemployment Rights Under the Universal Military Training and Service Act, as amended, and

related Acts § 6.211 (1979) (“Legal Guide”). In the Legal Guide, which interprets a predecessor

statute, the Department of Labor explained that “[t]he ‘pay’ protected under the statutes includes

all elements of pay, such as traveling expenses, drawing accounts, hourly rates, piece rates,

bonuses, etc.” Id. Specifically, the Legal Guide states that:

It must be borne in mind that the courts look to the actual pay
accorded the ex-serviceman, not the technical pay terms of his job.
Hence, assigning an ex-serviceman as a “like” position a different
sales territory with commission percentages identical to those in his
former position will not effect compliance, if the new territory does
not yield the equivalent of the pay he would receive, if restored to his
former position.

Id. (emphasis added). For the purpose of clarity, the Legal Guide continues: “Likewise, piece

rates or hourly rates in a job yielding less total pay than the former position will not effect

compliance, notwithstanding the job is of ‘like’ seniority and status and the rates are identical to

25
those of the former job.” Id. (emphasis added). This interpretation, though not controlling, is

entitled to deference under the principles announced in Skidmore v. Swift & Co., 323 U.S. 134

(1944), as a number of other courts have recognized. See, e.g., Sykes v. Columbus & Greenville

Ry., 117 F.3d 287, 295 (5th Cir. 1997); Lieb v. Georgia-Pac. Corp., 925 F.2d 240, 245 (8th Cir.

1991).

The Legal Guide, like the case law chronicled above, makes clear that where an

employee previously received commissions, the relevant inquiry regarding reemployment relates

to the total amount of pay the servicemember previously received—not just the rate of the

commissions. Because Wachovia moved for judgment as a matter of law on the ground that it

was not obligated to do more than offer Serricchio the same rate of commissions that he had

previously received, an interpretation of USERRA that we reject, we also conclude that the

district court did not err in denying judgment to Wachovia on this ground.

Finally, Wachovia has moved for judgment as a matter of law on Serricchio’s claim that

the company’s actions resulted in his constructive discharge.

Constructive discharge of an employee occurs when an employer, rather than directly

discharging an individual, intentionally creates an intolerable work atmosphere that forces an

employee to quit involuntarily. Working conditions are intolerable if they are so difficult or

unpleasant that a reasonable person in the employee’s shoes would have felt compelled to resign.

Chertkova v. Conn. Gen. Life Ins. Co., 92 F.3d 81, 89 (2d Cir. 1996) (internal citation and

quotation marks omitted); see also Terry v. Ashcroft, 336 F.3d 128, 151–52 (2d Cir. 2003).

Wachovia argues that the district court erred in denying its post trial motion to set aside

26
the constructive discharge verdict on the ground that there was no direct evidence in the record

that it “intentionally dissipated any accounts or otherwise sought to render [Serricchio’s]

working conditions intolerable.” Specifically, Wachovia argues that “[t]he only evidence

concerning the diminution of Serricchio’s book of business established that it was caused by

factors outside of Wachovia’s control.” Wachovia points to market conditions, the fact that

many of Serricchio’s accounts were shared with other advisors, who left and took the accounts

with them to their new employers, and transfers to the national call center, which were part of a

corporation-wide initiative that Wachovia urges could not have been reasonably interpreted as a

plan to render Serricchio’s working conditions intolerable. Rather, Wachovia argues that the

national call center, in particular, “coincided with an overall shift in [Wachovia’s] focus from

transactional business, in which financial advisors are paid commissions based upon their

clients’ trading activity, to fee-based business, in which advisors are paid fees as a percentage of

assets under management and are incentivized to grow such assets,” a change that was not

specific to Serricchio at all. Wachovia further notes that on the date Serricchio’s position was

offered to him, no information was available about how his accounts would perform after April

2004. Finally, Wachovia argues that Serricchio was required to give his employer an opportunity

to remedy the working conditions before bringing a constructive discharge claim, which

Serricchio did not do, since he “abandoned his position within hours of reinstatement.”

None of the three cases cited by Wachovia in support of its position dictates the outcome

of a case like this, where the employer had notice of the particular problems with the

employment position and took no steps to attempt to ameliorate them. In Knowles v. Citicorp.

Mortgage, Inc., 142 F.3d 1082 (8th Cir. 1998), for example, the veteran notified his employer of

27
the reason he quit only after he had abandoned his position. Id. at 1084-85. Similarly, in Major

v. Phillips-Jones Corp., 192 F.2d 186 (2d Cir. 1951), the employer’s reasonable suggestions

regarding accommodations were “met by flat refusals on the part of the plaintiff to discuss the

situation at all.” 192 F.2d at 188-89. Finally, in Lisdahl v. Mayo Foundation for Medical

Education & Research, 698 F. Supp. 2d 1081 (D. Minn. 2010), the plaintiff left for medical

leave and then quit without ever even telling the employer of the allegedly intolerable working

conditions. Id. at 1109.

Here, by contrast, Wachovia knew for months about the problems with its offer for

reemployment. That is, in December 2003, Serricchio (through his attorney) sent a reinstatement

demand letter to Wachovia outlining his concerns and identifying specific problems that he

believed existed. Wachovia took no action in response. Although Wachovia disputes the

substance of the conversation between Wachovia and Serricchio when the company first

contacted him in response to his letter, the parties agree that the first contact from Wachovia was

a call from Employee Relations Specialist Ken Rotondo on January 26, 2004, nearly two months

after Serricchio sent his letter. More than two more months then passed before Serricchio was

invited to report to the Westport Office for work, at which point Serricchio spoke to Branch

Administrator Carson Coyle, who communicated Wachovia’s offer: a position with a $2000 per

month draw and accounts that would yield very limited commissions. During the meeting with

Coyle, Serricchio again voiced his concerns about the offer, but no actions were taken to address

Serricchio’s complaints aside from Coyle’s referring Serricchio to Meyers to discuss the terms of

his reemployment. Serricchio returned to the branch a few days later to discuss the position with

Meyers, who reaffirmed the offer as it had previously stood. Because there is no question that

28
Wachovia knew about Serricchio’s grievances and did nothing to redress them, the cases cited

by Wachovia are inapposite.

The alternate ground on which Wachovia relies, namely that there is no “direct” evidence

of Wachovia’s wrongful intent, only circumstantial evidence, is equally meritless. In the Title

VII context, we have accepted circumstantial evidence to establish an employer’s wrongful

intent. See Krieger v. Gold Bond Bldg. Prods., 863 F.2d 1091, 1096-97 (2d Cir. 1988). We see

no principled basis on which to limit liability under USERRA to only direct evidence, nor has

Wachovia pointed to any statutory language that would support such a conclusion. Moreover, as

the district court observed, there was ample circumstantial evidence to support the jury’s finding

of liability on Serricchio’s constructive discharge claim. As the court noted, the jury heard

evidence

including Wachovia’s unexplained[] lengthy delay in offering to
reinstate Serricchio. . . . It also heard testimony from Nancy Gibbons,
Wachovia’s expert on its leave policy, that Wachovia ostensibly
maintained a generous military-leave policy applicable to returning
veterans, and there was no reason for the delay in reemploying
Serricchio. In addition . . . evidence was presented that Serricchio
was offered reinstatement in an inferior position than he had had
before he left for military service on which he could not have
supported his family, even if his draw would have been the same,
particularly where Wachovia had changed the structure of
Serricchio’s role as financial advisor and altered its business model
from transaction-based to fee-based, leaving him to do “cold calling,”
which he had not done since his early days as an employee of
Defendant. Further, there was evidence that Serricchio’s supervisor,
Lawrence Meyers, was dissatisfied with his accounts and froze them
before his return. Meyers testified that he knew that Serricchio
would be unable to support himself and his family on the monthly
draw and minimal commissions generated by the remaining accounts.

706 F. Supp. 2d at 249. Based on this and other record evidence, we conclude that the district

29
court committed no error in denying judgment to Wachovia on Serricchio’s constructive

discharge claim.2

Wachovia next appeals based upon what it argues are errors in the jury charge. We

review de novo a claim of error in jury instructions, reversing “where, viewing the charge as a

whole, there was a prejudicial error.” United States v. Quattrone, 441 F.3d 153, 177 (2d Cir.

2006) (internal quotation marks omitted).

Wachovia claims that the district court erred in instructing the jury on “pay” rather than

“rate of pay,” which Wachovia argues allowed the jury to conclude that Serricchio was entitled

to the total amount of compensation he received pre-activation rather than limiting his

entitlement to the same commission structure that he was receiving before he left—i.e., a $2000

monthly draw and the same commission percentage on transactions. The jury instruction

provided in relevant part that:

Wachovia was not required to provide Mr. Serricchio his exact
previous book of business so long as what it offered him gave him the
opportunity to reenter the work force with comparable status and
commission opportunity as of the date of reinstatement that he would

2
When Wachovia first recruited Serricchio, it offered him a salary advance of $229,582,
which was to be repaid pursuant to terms contained in two documents: a promissory note and his
employment agreement. Among other terms, the employment agreement provided that if
Serricchio were “to resign or be fired for cause, the balance of the Promissory Note would
become due and payable.” Pursuant to the terms of the agreement, Wachovia counterclaimed for
the balance outstanding on the note in connection with this lawsuit. However, because
constructive discharge is a complete defense to enforcement in this case, the jury’s finding that
Serricchio was constructively discharged, which we affirm, means that Wachovia’s counterclaim
automatically fails.

30
have had had he not taken military leave, regardless of whether the
same clients were in his substituted book of business provided on his
return.

For the reasons already stated, we conclude that there was no error in the district court’s

instruction. The plain text of USERRA and the case law make clear, as the Department of Labor

explained in its well-reasoned letter, that USERRA requires an employer to offer a

servicemember returning to a financial advisor position the book of business he would have had

but for his period of service. To the extent that the pre-service book of business is unavailable

for one or more reasons, USERRA obligates the employer to take steps to restore the

servicemember to a position of like “pay,” which may include providing an interim salary while

the servicemember rebuilds his book of business. While USERRA acknowledges that a

servicemember’s book of business might have fluctuated had the servicemember not been

absent, the law makes clear that the employer must determine what would have happened to the

servicemember’s book of business had he not been absent and adjust accordingly. It is not

enough, as Wachovia urges, to offer the servicemember simply a minimal draw and the same

commission rate as he received preservice without regard to his preservice book of business. See

Legal Guide § 6.211 (“[P]iece rates or hourly rates in a job yielding less total pay than the

former position will not effect compliance, notwithstanding the job is of ‘like’ seniority and

status and the rates are identical to those of the former job.” (emphasis added)). Thus, the

district court’s instruction, which advised the jury to consider the “commission opportunity . . .

that [Serricchio] would have had had he not taken military leave” was an accurate iteration of the

state of the law.

31
Wachovia next claims error in the district court’s instruction on the “escalator principle,”

which provided in relevant part that:

To prove Wachovia violated this USERRA requirement, Mr.
Serrichio must prove that Wachovia failed to reinstate him to a
position which, at the time the position was offered, reflected with
reasonable certainty the pay, benefits, seniority and other job
perquisites that he would have obtained if not for the period of his
military service, the escalator position, or a position comparable to
the escalator position, or to his pre-service position, or to a position
which was the nearest to any of these positions.

Wachovia argues that insofar as “[t]he term ‘escalator’ connotes upward movement . . . [the jury]

instruction implied that the only sufficient position to which Wachovia could reinstate Serricchio

was one equal to or better than the position he held prior to his leave.” Wachovia argues,

however, that “Serricchio’s book of business was diminished by numerous events outside

Wachovia’s control, including the actions of Serricchio’s chosen partners and the realities of the

financial markets.” The fault of the instruction, Wachovia insists, was that it “failed to provide

the jury with a full understanding of USERRA and suggested that Serricchio was entitled to

equal or higher pay following his leave regardless of intervening lawful events.” In other words,

Wachovia maintains that the district court should have expressly instructed the jury on lawful

adverse job consequences. We disagree.

In the first instance, Wachovia’s argument regarding the “escalator principle” is a

corollary of its earlier argument regarding “pay” and fails for similar reasons. That is, the

problem with Wachovia’s argument is the company never determined what Serricchio’s book of

business would have been but for his military service, as it was required to do in order to comply

with USERRA. See 20 C.F.R. § 1002.192. Instead, Wachovia argues that not all declines in the

32
book of business were the product of Wachovia’s actions—for example, Serricchio’s partners

took certain of his accounts with them when they left Wachovia. In making this argument,

Wachovia misses the point. The central consideration is not whether Wachovia itself

intentionally dissipated Serricchio’s book of business but rather what would have happened to

Serricchio’s book of business but for his absence; had he never served in the Air Force, his

clients might never have left Wachovia, because their accounts might never have been

transferred to other brokers.

Further, nothing in the instruction given by the district court prohibited the jury from

concluding that certain adverse consequences to Serricchio’s book of business should be

considered in determining Serricchio’s reemployment position. The charge was neutral in this

regard and tracked the language in the underlying regulation, which reads in relevant part:

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 been interrupted due to uniformed
service. . . . 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. We generally find no error in charges that track the statutory language. See United States v.

Alfisi, 308 F.3d 144, 150 (2d Cir. 2002). We find no reason to deviate from this axiom here.

Wachovia also argues that the district court erred in failing to instruct the jury that

Serricchio was entitled only to “seniority-based benefits.” Wachovia maintains that Serricchio’s

book of business was not a “perquisite” of seniority, which is all he was entitled to, because

33
“[t]he extent to which Serricchio might have accumulated accounts and commissions had he not

been on leave is wholly speculative [and] unrelated to his length of service.”

USERRA defines “seniority” as “longevity in employment together with any benefits of

employment which accrue with, or are determined by, longevity in employment.” 38 U.S.C. §

4303(12). USERRA provides that a returning servicemember is “entitled to the seniority and

other rights and benefits determined by seniority that the person had on the date of the

commencement of service in the uniformed services plus the additional seniority and rights and

benefits that such person would have attained if the person had remained continuously

employed.” 38 U.S.C. § 4316(a).

Wachovia cites two principal cases in support of its position, which is, at base, that it was

not required to determine “what Serricchio might have earned had he not left,” because his

commissions were really merit increases in his pay. Both of these cases, Mullins v. Goodman

Distrib., Inc., 694 F. Supp. 2d 782, 790 (S.D. Ohio 2010), and Fannin v. United Space Alliance,

LLC, No. 07 Civ. 1315, 2009 WL 139878, at *9 (M.D. Fla. Jan. 20, 2009), involved a grant of

summary judgment to a defendant on the ground that the plaintiff had failed to come forward

with sufficient evidence to establish that he was entitled to the increases in pay during the period

of military leave. In this case, by contrast, Wachovia is not simply alleging that it was not

required to increase Serricchio’s pay during his absence—the company affirmatively asserts that

it was entitled to significantly decrease his compensation based solely on the fact that Serricchio

occupied a commission-based position and therefore all compensation (from commissions)

above the standard $2000 monthly draw can be considered speculative, because only $2000 per

month was guaranteed. We cannot reconcile that position with the statute and the regulations

34
promulgated thereunder, which expressly state that an employee “does not have to establish” that

he would have received the total amount of compensation “as an absolute certainty.” 20 C.F.R.

§ 1002.213.

USERRA, like its predecessor statutes, protects a servicemember returning from military

duty “against receiving a job inferior to that which he had before entering the armed services.”

Fishgold, 328 U.S. at 284. Specifically, USERRA entitles a returning servicemember to

reemployment “in the position of employment in which the person 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.” 38 U.S.C. § 4313(a)(2)(A) (emphasis

added). The commissions that Serricchio received before leaving for his tour of duty were his

“pay” to which he was entitled upon his return. For this reason, Wachovia’s argument fails.

Wachovia’s final objection to the district court jury instructions relates to the fact that the

district court failed to define the phrase “reasonable certainty” as a “high probability.” The

district court instructed the jury in relevant part that:

To prove that Wachovia violated this USERRA requirement,
Serricchio must prove that Wachovia failed to reinstate him to a
position which, at the time the position was offered, reflected with
reasonable certainty the pay, benefits, seniority, and other job
perquisites that he would have attained if not for the period of his
military service.

The phrase “high probability” appears in 20 C.F.R. § 1002.213, which provides in

relevant part that: “A reasonable certainty is a high probability that the employee would have

received the seniority or seniority-based right or benefit if he or she had been continuously

35
employed. The employee does not have to establish that he or she would have received the

benefit as an absolute certainty.” We agree with the district court that “there is no clear

distinction between the phrase ‘reasonable certainty’ [as] used in the instruction and the phrase

‘high probability’ as used in 20 C.F.R. § 1002.213.” Serricchio v. Wachovia Sec., LLC, 706 F.

Supp. 2d 237, 248 (D. Conn. 2010). Wachovia has offered no compelling argument regarding

the difference in these phrases, aside from its conclusory assertion that “reasonable certainty” is

an “amorphous phrase.” Accordingly, we conclude that there was no error in the district court’s

instruction.

Finally, Wachovia appeals the district court’s damages verdict on two grounds. First,

Wachovia argues that the district court erred in reinstating Serricchio with a guaranteed salary of

$12,300 for three months, to be followed by nine months, during which Serricchio would receive

a $12,300 monthly draw to be offset by any commissions he brought in. Wachovia argues that

this award was in error both because the dollar figure fixed by the district court was “arbitrary

and [bore] no logical relationship” to the commissions he had previously earned, and because

Serricchio was never entitled to a fixed salary in the first place. The district court also awarded

liquidated damages to Serricchio in the amount of $389,453, which was equal to the backpay

award. Wachovia argues this decision was in error because the evidence was insufficient to

support a finding that it wilfully violated USERRA.

We address the liquidated damages verdict first. On this point, Wachovia argues that the

district court erred in awarding liquidated damages because “Wachovia acted reasonably in

36
attempting to meet its legal obligations” and “[t]he issues raised in this litigation were ones of

first impression”; therefore, a reasonable fact-finder could not have concluded that any violation

of USERRA was willful.

We review a district court’s decision on whether to award damages for abuse of

discretion. Int’l Star Class Yacht Racing Ass’n v. Tommy Hilfiger, U.S.A., Inc., 80 F.3d 749, 752

(2d Cir. 1996). However,“the amount of recoverable damages is a question of fact” that we

review for clear error. Lucente v. Int’l Bus. Mach. Corp., 310 F.3d 243, 261 (2d Cir. 2002)

(internal quotation marks omitted). Further, “[w]hether a litigant was at fault or acted willfully

or in bad faith are questions of fact, and we review the District Court’s determinations for clear

error.” Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302 (2d Cir. 2009).

USERRA provides that a prevailing party is entitled to a doubling of the backpay award

upon a determination that “the employer’s failure to comply with the provisions of [USERRA]

was willful.” 38 U.S.C. § 4323(d)(1)(C). The Supreme Court has explained that where “an

employer acts reasonably in determining its legal obligation, its action cannot be deemed

willful.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 135 n.13 (1988). Similarly, where an

“employer acts unreasonably, but not recklessly, in determining its legal obligation,” then its

action should not be “considered willful.” Id.

Here, the district court concluded that Wachovia had willfully violated USERRA in

failing to reemploy Serricchio promptly, in failing to offer him a position comparable to his pre-

service position when it did offer Serricchio reemployment, and by constructively discharging

him. See Serricchio v. Wachovia Sec. LLC, 606 F. Supp. 2d 256, 265-66 (D. Conn. 2009). The

district court based its conclusion in large part on the testimony of Nancy Gibbons, the

37
Wachovia manager responsible for the company’s military leave policies, who testified that she

understood that USERRA required “prompt” reinstatement. Id. In light of the fact that

Wachovia made no attempt to reinstate Serricchio “promptly,” and the company did not even

respond to his request for reinstatement for months, the district court concluded that Wachovia’s

actions were willful. Id. The district court reiterated this reasoning in denying Wachovia’s post-

trial motions. 706 F. Supp. 2d at 250. The same reasoning applies here. Wachovia offered no

evidence to excuse its failure to “promptly” reinstate Serricchio as required by USERRA.

Accordingly, we conclude that there was no error in the district court’s finding of willfulness as

to the prompt reinstatement claim.3

Ample evidence also supports the district court’s findings as to the constructive discharge

and comparable position claims. In the first instance, we note that the jury’s verdict in favor of

Serricchio on his constructive discharge claim required a finding of intent. See Terry v. Ashcroft,

336 F.3d 128, 151-52 (2d Cir. 2003) (A constructive discharge occurs when an employer

“intentionally creates a work atmosphere so intolerable that [the employee] is forced to quit

involuntarily.”). Specifically, the district court’s jury instructions provided in relevant part that:

“Serricchio must prove . . . that the defendant, rather than discharging him directly, created a

work atmosphere so intolerable that Mr. Serricchio was forced to quit involuntarily. The

plaintiff must prove that Wachovia’s actions were intentional or deliberate and were more than

merely negligent.” 706 F. Supp. 2d at 249 (emphasis added). Thus, the jury’s conclusion that

Wachovia constructively discharged Serricchio was a finding that the company willfully violated

3
Wachovia has wisely conceded that the district court’s finding of “willfulness” as to the
prompt reinstatement claim was not error.

38
its USERRA obligations as to that claim.

Relevant to the range of USERRA violations, but specifically the district court’s finding

that Wachovia willfully failed to reemploy Serricchio in a comparable position, the district court

explained that “Wachovia was a sophisticated company, employing many commission-based

financial advisors like Serricchio, which had in place a written military-leave policy and a team

of people responsible for dealing with military-leave issues.” 606 F. Supp. 2d at 266.

Considered in conjunction with Gibbons’ testimony that “she understood what USERRA

required and recognized Wachovia’s obligations with respect to Serricchio,” the district court

concluded that Wachovia willfully failed to offer Serricchio a reemployment position

comparable to his pre-service position. Id. In so doing, the district court noted that “[e]ven

assuming that USERRA’s terms are subject to reasonable misinterpretation, Wachovia failed to

show that it tried to comply with the law as it applies to Serricchio.” Id. (emphasis added).

Indeed, Wachovia was aware that Serricchio could not support himself on the $2000 per month

draw that it had offered him, but it does not appear that Wachovia ever even consulted an

attorney about its USERRA obligations. For these reasons, we conclude there was no error in

the district court’s award of liquidated damages based upon its finding that Wachovia willfully

failed to comply with USERRA.

Wachovia next argues that the district court erred in (1) awarding a temporary salary to

Serricchio and (2) fixing that number at $12,300 per month, on the ground that the figure is

“arbitrary.” Wachovia provides no additional explanation of its position regarding the

calculation of the $12,300 figure, which, in any event, we review only for clear error. See

39
Lucente v. IBM Corp., 310 F.3d 243, 261 (2d Cir. 2002).

Here, the district court calculated damages in a separate proceeding, after the jury

returned its verdict finding liability and after hearing substantial testimony and taking evidence

from both parties. See Serricchio v. Wachovia Sec., LLC, 606 F. Supp. 2d 256 (D. Conn. 2009).

The figure of which Wachovia complains ($12,300 per month) was based upon a comprehensive

formula, derived from the testimony of both parties’ experts, that accounted for, inter alia, a nine

percent annual growth rate in Serricchio’s earnings. Id. at 261. That is, the district court

estimated Serricchio’s annual salary for 2009 to be $147,609, or $36,902 for the first three

months of 2009. Id. Dividing $36,902 by three, to create a per month income estimate, leaves a

monthly income of $12,300. Wachovia has not challenged that portion of the district court’s

order calculating Serricchio’s lost earnings, nor has Wachovia identified any error in the

calculation. Accordingly, any appeal based on the district court’s methodology has therefore

been waived. Further, as the district court’s order makes clear, the $12,300 per month figure

bears a direct relationship to the projected growth of Serricchio’s book of business; therefore, we

find no error in the district court’s application of this figure to its reinstatement award.

With respect to the terms of Serricchio’s reinstatement ordered by the district

court—specifically, the fact that the district court awarded Serricchio a salary, though he had not

previously been a salaried employee, we review the award for abuse of discretion. See

Abrahamson v. Bd. of Educ. of Wappingers Falls Cent. Sch. Dist., 374 F.3d 66, 76 (2d Cir. 2004)

(decision to grant or deny an equitable remedy reviewed for abuse of discretion).

40
As a threshold matter, our Circuit favors reeinstatement as a remedy in employment cases

generally. See Reiter v. MTA N.Y. City Transit Auth., 457 F.3d 224, 230 (2d Cir. 2006) (noting

an “overarching preference in employment discrimination cases for reinstatement”). USERRA,

specifically, provides for the remedy of reinstatement by permitting courts to “require the

employer to comply with the provisions of [USERRA],” 38 U.S.C. § 4323(d)(1)(A), and by

granting a court “full equity powers . . . to vindicate fully the rights or benefits” of veterans

seeking reemployment, 38 C.F.R. § 4323(e) (emphasis added).

Here, the district court used its equitable powers to compel reinstatement and establish

compensation during the period of reinstatement. Concluding that the plaintiff would require

three months to regain his licenses, which had expired since he first requested reinstatement after

his discharge from the armed forces, the district court established a set salary for those three

months ($12,300 per month). Serricchio, 606 F. Supp. 2d at 266-67. Although the record is

silent as to whether Serricchio could have maintained his licenses while not employed as a

broker, the logic underlying this award was that Wachovia committed USERRA violations,

which in turn caused the plaintiff’s licenses to lapse, and therefore the equitable award was

necessary to account for the time it would take Serricchio to regain his licenses. See id. And

until Serricchio is licensed, he is “prohibited from advising clients and making transactions,”

which means that during any period of reinstatement before he obtains new licenses, Serricchio

will be unable to earn commissions; thus, reinstating Serricchio without a salary would not

vindicate his rights. Id.; see 38 U.S.C. § 4323(e) (“The court shall use . . . its full equity powers

. . . to vindicate fully the rights or benefits of persons under this chapter.”).

Serricchio points out that the district court’s salary award was similar to front pay, and

41
directs us to at least one decision where a court has held that front-pay damages are available

under USERRA. See Carpenter v. Tyler Indep. Sch. Dist., 226 F. App’x 400 (5th Cir. 2007).

We also note that at least one court has held that an improperly terminated veteran was entitled

to his salary while he retrained for a commissioned sales position. See Bankston v. Stratton-

Baldwin Co., Inc., 441 F. Supp. 247, 250 (S.D. Ala. 1977) (“The plaintiff is to be reinstated as an

employee of the defendant . . . . He is to receive the same salary of $720.00 per month ($220 for

expenses), plus a sales commission of 2% of gross sales for a period of five months since the

plaintiff has been denied continuous sales experience for the full one-year period found by the

court as reasonable and necessary for a novice salesman to establish himself. It would be

inequitable to return Mr. Bankston to the same territory on a straight percentage basis before the

completion of a training period deemed fair by this court.”).

In addition to the three-month salary, the district court awarded Serricchio $12,300 per

month for nine months as a draw. This means that Serricchio is guaranteed $12,300 minimum

compensation while he rebuilds his book of business; however, during the nine months, any

commissions Serricchio earns will be credited to the draw such that he will not earn more than

$12,300 unless he earns commissions in excess of that amount. In light of the fact that

Wachovia is not obligated to provide Serricchio with any other form of assistance in rebuilding

his book of business, we conclude that the district court did not abuse its discretion in awarding

the nine month draw, especially in that it (along with the three month salary) corresponds to

USERRA’s twelve month reemployment right, see 38 U.S.C. § 4316(c)(1) (“A person who is

reemployed by an employer under this chapter shall not be discharged from such employment,

except for cause . . . within one year after the date of such reemployment. . . .). Like the three-

42
month salary, the draw is similar to an award of front pay, and we hold that the fact that a portion

of the calculated damages are to be paid to Serricchio as a component of his reinstatement does

not render the award an abuse of discretion.

We note that the Department of Labor takes the position that Wachovia may have been

required to offer Serricchio a salary in the first instance in order to meet its obligations under

USERRA. We find the Department’s reasoning persuasive, but we are not required to reach that

question. The question presented to us is limited to the nature and scope of the remedy for the

USERRA violation once the jury entered a finding of liability. In light of the broad equitable

powers afforded a court to vindicate veterans’ rights, see 38 U.S.C. § 4323(e), and the liberal

construction given to USERRA “for the benefit of those who,” like Serricchio, “left private life

to serve their country,” see Fishgold, 328 U.S. at 285, we cannot conclude that the district court

abused its discretion in awarding a standard salary and draw to Serricchio for a one year period.

CONCLUSION

For the reasons stated herein, we AFFIRM the orders of the district court.

Serricchio v. WACHOVIA SECURITIES LLC

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