Consider Commission When Service Members Come Home

By:  Juliet Gobler

The post-September 11, 2001 patriotic spirit has been captured in the recent Second Circuit decision of Serricchio v. Wachovia Securities LLC.[1]  The court declared that the Uniformed Services Employment and Reemployment Act (USSERA) does require employers to consider the value of servicemembers’ pre-activation book of business, or client list, when choosing an appropriate reemployment position.[2]  This factor is relevant when a servicemember had potential to earn greater commission on their pre-activation book of business than in their post-activation book of business.[3]  In addition, the Second Circuit held that the district court did not abuse its discretion by fashioning the terms of the servicemember’s reinstatement.[4]

The Second Circuit affirmed that Wachovia Securities LLC (“Wachovia”) violated USERRA, and awarded Michael Serricchio, an American Air Force reservist and financial advisor for Wachovia, $926,506 in backpay and liquidated damages.[5]   The court found that Wachovia failed to promptly and equivalently reinstate Serricchio to his pre-activation position when he returned from active duty in 2003.[6]

USERRA is a federal law that protects noncareer uniformed servicemembers’ employment rights.[7]  Under the Act, service-members are to be reemployed with the same seniority, pay, status, rights and seniority benefits as if they had not been absent due to military service.[8]   The Act also states that if a servicemember shows intent to return within ninety days after completing service, the employer must “promptly” reemploy.[9]

Serricchio worked for Wachovia for eleven months before he was called to active duty shortly after September 11, 2001.[10]   During his eleven months of employment with the defendant, the plaintiff had earned over $75,000 in annualized net commission.[11]  In December 2003, less than two months after being honorably discharged from duty, Serricchio requested reinstatement of his position at Wachovia.[12]  It took four months for the defendant to reinstate Serricchio.[13]  In addition, the client lists he was provided would have “generate[d] virtually no commissions.”[14]  Wachovia did not give Serricchio any further assistance in rebuilding his book of business, though it could have partnered him with brokers with larger accounts, offered an interim salary as he rebuilt his book, or offered him accounts of new clients. [15]  In response, Serricchio filed a claim against Wachovia.

In June 2008, a jury in the District Court of Connecticut ruled in favor of the plaintiff, finding that Wachovia violated the Act when it failed to offer prompt reinstatement, failed to offer a reemployment position with equivalent seniority, status and pay, and constructively discharged the plaintiff by not offering him an adequate position.[16]  The district court awarded Serricchio backpay and liquidated damages, and ordered Wachovia to reinstate the plaintiff as a financial advisor and pay him $12,300 per month for the next year.[17]  The monthly payment would enable the plaintiff to regain his broker license and offset commissions he would have made had he not lost his prior accounts.[18]

Wachovia moved for a judgment as a matter of law or, alternatively, for a new trial, arguing that the plaintiff was offered the same commission rate as he received before going on active duty, thus he was offered the same “rate of pay.”[19]   The district court denied Wachovia’s post-trial motions, holding that evidence at trial was sufficient to find the defendant as violating the USSERA and Wachovia’s offer was one in which “a reasonable person could regard as financially precarious and professionally degrading.”[20]   Wachovia appealed to the Second Circuit, which affirmed in favor of the Serricchio in this recent decision.[21]

This decision comes in the wake September 11th and the War on Terrorism, which inspired some to enlist in the military efforts, and those already on reserve to be put back on active duty.  Ensuring that the men and women that served our country are not penalized in the workplace seems fitting with the emphasis on American patriotism and service over the past ten years.


[1] See Serricchio v. Wachovia Securities LLC, No. 10-1590-cv, 2011 U.S. App. LEXIS 18868, at *1 (2nd Cir. Sept. 13, 2011).

[2] Id at *5-6.

[3] See id at *12, *15.

[4] Id at *6.

[5] Id at *4, *17, *61.

[6] Id at *5-7.

[7] 38 U.S.C. § 4301(a)(1) (2011).

[8] Id at § 4313(a)(2)(A)-(B).

[9] Id at § 4313(a).

[10] Serricchio, 2011 U.S. App. LEXIS 18868, at *4.

[11] Id at *12.

[12] Id at *14.

[13] Id at *15.

[14] Id

[15] Id at *16.

[16] Id at *16.

[17] Id at *17.

[18] Id

[19] Id

[20] Id at *18.

[21] Id at *5-7.

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