Military Personnel: Improved Quality Controls Needed over Servicemembers' Employment Rights Claims at DOL
Released: 2007-07-20T00:00:00

Letter

Background

Before the demonstration project, VETS was authorized to investigate all USERRA claims filed against federal executive branch agencies as well as claims against state and local governments and private sector employers. Under the demonstration project, VETS is authorized to investigate claims filed against federal executive agencies by servicemembers with social security numbers ending in even numbers; its role in handling other nonfederal USERRA claims remains unchanged. In addition, under the demonstration project, OSC is authorized to investigate and seek corrective action for USERRA claims against federal executive agencies from servicemembers whose social security numbers end in odd numbers. Also, under the demonstration project, OSC is authorized to handle any USERRA claim filed against federal executive branch agencies where the claimant also brings a related prohibited personnel practice claim—that is, a “mixed claim.”

When a claimant with a social security number that ends in an odd digit submits a claim to VETS, VETS sends the claim information to OSC either electronically or via facsimile, depending on whether the claim was filed electronically or in hard copy. VETS also forwards OSC the claim information on all mixed claims. Similarly, when a claimant with a social security number that ends in an even digit submits a claim to OSC, OSC sends an e-mail notification and the file to VETS headquarters and informs the claimant of the transfer of the claim to VETS.

OSC’s responsibility under USERRA for conducting independent reviews of certain claims after they are investigated by VETS remained unchanged during the demonstration project. For those claims VETS investigates and is unsuccessful in resolving, a claimant employed by a federal executive agency may request to have his or her USERRA claim referred to OSC. Before sending the referred claim to OSC, VETS prepares a memorandum of referral, which it sends with the investigative file to a VETS regional office for review; the regional office conducts a review and sends the file to a DOL regional Office of the Solicitor, which prepares a legal analysis of the claim and then refers the claim to OSC. OSC reviews the case file, and if satisfied that the evidence is sufficient to resolve the claimant’s allegations and that the claimant is entitled to corrective action, OSC begins negotiations with the claimant’s federal executive branch employer.

According to OSC, if an agreement for full relief via voluntary settlement by the employer cannot be reached, OSC may represent the servicemember before MSPB. If MSPB rules against the servicemember, OSC may appeal the decision to the U.S. Court of Appeals for the Federal Circuit. In instances where OSC finds that claims do not have merit, it informs servicemembers of its decision not to represent them and that they have the right to take their claims to MSPB without OSC representation. Figure 1 depicts USERRA claims’ processing under the demonstration project.

In October 2005, we issued a report that reviewed the extent to which the four USERRA coordinating agencies—DOL, OSC, and the Departments of Defense and Justice—(1) had data that indicate the level of compliance with USERRA, (2) conducted educational outreach, and (3) addressed servicemember complaints. In February 2007, we issued a report that assessed the status of the Department of Defense’s effort to capture reservists’ employer data, the four USERRA coordinating agencies’ processes to track and address reservists’ USERRA claims, and the agencies’ efforts to track reservists’ USERRA claims related to disabilities incurred while on active duty.

DOL and OSC Both Had Policies and Procedures for Processing USERRA Claims during the Demonstration Project

Within their different organizational structures, both DOL and OSC had policies and procedures for receiving, investigating, and resolving claims and, for DOL, referring claims to OSC.

Organizational Structure

DOL’s responsibility concerning servicemembers’ claims for USERRA rights and benefits is carried out primarily through the efforts of VETS, which is led by an assistant secretary supported by staff in a national office, six regions, and offices in every state. A VETS official said that in fiscal year 2006, of 189 VETS investigators authorized around the country to conduct USERRA investigations, 115 were assigned as primary investigators on USERRA claims during fiscal year 2006. The remaining 74 investigators include regional administrators and management who were authorized to investigate USERRA claims but were not assigned to any. VETS investigators also have responsibilities concerning a federal law requiring that preference be given to veterans in federal hiring and retention during reductions in force. VETS investigators are required to complete three courses: one on the basics of USERRA law, one on advanced investigative techniques, and one on veterans’ preference issues, which includes a section on prohibited personnel practices. In addition, in fiscal year 2006, VETS designated 7 senior investigators who are to conduct investigations, assist investigators, and review the work of investigators in their six respective regions and the national office.

To ensure consistency and understanding of relevant legal issues between offices and organizations, an official from DOL’s Office of the Solicitor said that the Office of the Solicitor conducts a monthly conference call with the regional Solicitors’ Offices in which officials from OSC and the Department of Justice take part. According to the senior investigator from VETS’s national office, the senior investigators also conduct a monthly conference call and hold quarterly meetings in one of the regional offices around the country and invite participation from the Office of the Solicitor, the Department of Justice, OSC, and the Department of Defense’s Employer Support of the Guard and Reserve, which provides informal assistance in resolving conflicts arising from an employee’s military commitment before a formal claim is filed with VETS or OSC.

Along with their USERRA investigation and mediation responsibilities, which according to VETS officials take on average about one-third of VETS investigators’ time, investigators conduct briefings to educate employers (federal and nonfederal) and servicemembers (at mobilizations and demobilizations) about USERRA requirements and responsibilities. In addition, they handle service-related employment and reemployment questions that are directed to their offices. According to VETS officials, after VETS provides technical assistance, including education and outreach briefings as well as informal requests for information, to servicemembers informally, many servicemembers decide not to file formal claims. In addition, after providing such assistance, VETS also encourages servicemembers to go to the Department of Defense’s Employer Support of the Guard and Reserve to try and resolve a concern through informal resolution. According to VETS’s technical assistance logs, in fiscal year 2006, VETS received 7,044 telephone and 1,584 written (including e-mail) inquiries and conducted 1,088 presentations and briefings.

OSC uses a centralized approach for processing USERRA claims, under the demonstration project, in its Washington, D.C., headquarters and has a single individual (an attorney)—the USERRA Unit Chief—responsible for data entry, review, and oversight of the investigation, analysis, resolution, and prosecution of all USERRA claims. OSC established a USERRA Unit at its headquarters in January 2005 to investigate, mediate, and, as necessary, litigate USERRA and other federal employment rights claims involving servicemembers. OSC’s USERRA Unit currently consists of the Unit Chief, three investigators, and three attorneys. According to OSC officials, the members of the USERRA Unit spend most of their time on USERRA claims, but they also handle other prohibited personnel practice claims brought by servicemembers and concerning servicemember issues. According to OSC, all new USERRA Unit members are provided with two structured USERRA training sessions. In addition, OSC’s USERRA Unit Chief stated that he meets on a weekly basis with each unit member to discuss the status of his or her investigations and analyses, and the entire team meets on a biweekly basis (e.g., to discuss changes in the law, investigative techniques, and other issues that may affect the operations of the unit). OSC USERRA staff also have provided off-site education and outreach to federal agencies (e.g., human resources specialists and attorneys) about USERRA, including a seminar at the annual Federal Dispute Resolution Conference and a basic and advanced USERRA course at the Judge Advocate General’s Legal Center and School in Charlottesville, Virginia.

Receiving Claims

A servicemember can file a formal USERRA claim against his or her civilian employer directly with DOL using a VETS Form 1010 electronically at https://vets1010.dol.gov or can file a signed printed copy of the claim form with the Secretary of Labor by mail or fax. Servicemembers also can file indirectly through the VETS electronic USERRA Advisor link, which contains an interactive question-and-answer component to answer questions for potential claimants on employee and employer rights and responsibilities and provides access to the electronic VETS Form 1010. Electronic filing of claims directly enters the claimant’s information into VETS’s E-filing database first and then into VETS’s database, records the date the claim was received, and sends an automatic response to the claimant. According to a DOL official, an individual other than the claimant may file a claim on behalf of a servicemember when the individual has a signed power of attorney that complies with the laws of the state where the claim is filed. The official said that although this happens rarely, it could happen when a servicemember is deployed; then a claim could be filed, for example, by a spouse or veteran’s service organization.

Any person may contact OSC via mail, e-mail, telephone, fax, OSC’s Internet hotline, or in person to seek technical assistance about USERRA or to file a claim. OSC will open an investigation once it receives information that allows OSC to determine whether it has jurisdiction over the allegation and to begin a focused inquiry—a form is not required to file a claim. The claimant may print out OSC-Form 14 and mail or fax it. The claimant also may save it as a portable document format file and e-mail it, as the form is not available for direct electronic filing. According to an OSC official, OSC is awaiting the outcome of the demonstration project before implementing electronic filing of USERRA claims. According to the USERRA Unit Chief, anyone may report USERRA violations on a claimant’s behalf, but under the Privacy Act, the claimant must sign a consent form, which identifies three levels of confidentiality—none, partial, or complete—for OSC to open a case in its case tracking system. In addition, according to OSC, USERRA Unit investigators and attorneys may obtain the claimant’s consent telephonically and document the telephone conversation, which is standard operating practice for all of OSC’s investigative divisions.

Investigating Claims

Claims to be reviewed by VETS are assigned to an investigator located close to the claimant’s worksite. According to a DOL official, each region has its own procedures for assigning an investigator to a claim, and regional administrators are responsible for determining the workload for their investigators. Unlike claims that are filed electronically, claims that are submitted to VETS by hard copy must be entered into VETS’s database by an investigator once an investigation is begun. VETS’s USERRA Operations Manual states that a case should be opened immediately upon receipt of a signed VETS Form 1010, unless the written information does not provide enough data to establish eligibility; in that case, the investigator should contact the claimant for clarification before opening a case.

At OSC, after entering the claim in OSC’s case tracking system, the USERRA Unit Chief assigns the claim to either an investigator, or an attorney, or both, depending on the claim’s complexity. The USERRA Unit Chief stated that investigators or attorneys are assigned according to their individual qualifications and caseloads. At the time a claim is opened in OSC’s case tracking system, the USERRA Unit Chief sends an acknowledgement letter and consent form (if a signed form has not been received) to the claimant. When the claimant’s original submission does not include enough information to begin an investigation, the USERRA Unit Chief may ask relevant questions in the acknowledgment letter. When the claimant’s original submission raises issues over which OSC may not have jurisdiction, the acknowledgment letter is to inform the claimant of other potential avenues of redress.

VETS investigators and OSC investigators or attorneys are first to review the claim information. VETS’s USERRA Operations Manual states that initially the investigator is to identify the alleged violation and the remedies available; identify the applicable section(s) of the statute; determine whether the claimant is eligible for USERRA assistance; and if not, open and close the case file and notify the claimant of the result. Although OSC’s USERRA Unit Operations Manual states that the assigned investigator or attorney is to perform a similar initial review of the case, according to OSC, in everyday practice the USERRA Unit Chief performs this task during his initial review of the file when entering the claim into OSC’s case tracking system and so informs the assigned investigator or attorney of his assessments.

Concerning evidence gathering, both agencies’ general policy is to contact the employer during the investigation with the consent of the claimant. VETS requests the employer’s position regarding the allegations of the claim and documentation to support that position. According to the VETS’s USERRA Operations Manual, investigations seek evidence to determine whether the case has merit and generally include interviews and document reviews to develop evidence admissible in court. Within 30 days of starting a formal investigation, the investigator is to develop a written investigative plan, which among other things, is to identify any evidence needed to make a factual determination; the means through which evidence is to be obtained (e.g., interview, records review); and all steps necessary to arrive at a determination of the merits of the claim. According to OSC, a typical USERRA investigation includes sending written questions to and requesting documents of the employer and, upon receipt of such evidence, interviewing relevant witnesses and subjects. Additionally, according to OSC’s USERRA Unit Operations Manual, where appropriate, OSC also requests copies of e-mail communications between relevant witnesses.

Concerning legal analysis, an official from DOL’s Office of the Solicitor said that if an investigator has a question or needs legal assistance, attorneys from the Office of the Solicitor are available for consultations at any time. The official said that attorneys from the Office of the Solicitor are only assigned when contacted by VETS investigators or when a regional office is contacted by the public. He added that an attorney from the Office of the Solicitor is assigned to every case that is a referral, which involves a legal review of a completed case file, but not to every case during an investigation. According to OSC’s USERRA Unit Chief, a legal analysis is conducted during each USERRA investigation with investigators and attorneys using a collaborative team approach throughout the investigation.

Resolving Claims

According to the VETS’s USERRA Operations Manual, a VETS investigator may hold a case resolution conference at any stage of the claims process when the investigator believes it may help the claimant and employer reach agreement, and should be attempted when the investigation has been completed and letters and telephone calls are unable to resolve the case. Once the VETS investigator completes the investigation and arrives at a determination on the claim, the investigator is to contact the claimant, discuss the findings, and send a letter to the claimant notifying him or her of VETS’s determination. VETS’s USERRA Operations Manual does not specify the date an investigator should record in VETS’s database as the date the investigation is closed. VETS officials told us that the date closed in VETS’s database should be the date of the closure letter, or if VETS requests additional information, the date by which the claimant needed to provide the information to avoid, for example, a determination of “no merit.”

According to OSC’s USERRA Unit Operations Manual, once the OSC investigator or attorney completes an investigation, he or she is to discuss his or her determination with the USERRA Unit Chief. If the USERRA Unit Chief agrees that further investigation is not warranted on a case not having merit, the investigator or attorney is to submit for the USERRA Unit Chief’s review and approval the summary of investigation, which includes the closure letter detailing the factual and legal basis of the determination and a rights letter providing information to the claimant about his or her right to file a USERRA appeal with MSPB. According to OSC, when a case has merit and cannot be resolved through discussions with the agency, the investigator or attorney may prepare a demand letter for the Unit Chief’s review. The demand letter explains the factual and legal bases for OSC’s determination and the relief being sought from the agency and is viewed by OSC as antecedent to formal litigation. OSC’s USERRA Unit Operations Manual states that the assigned investigator or attorney is to provide the closing information to the USERRA Unit Chief to enter in OSC’s case tracking system but does not specify the date to be used when closing a case. OSC’s USERRA Unit Chief said that the date entered into OSC’s case tracking system reflecting when the case is officially closed is the same as the date the closure letter is sent to the claimant.

Quality Assurance/Oversight

VETS has no internal process to routinely review investigators’ determinations before claimants are notified of them. According to a VETS official, there is no requirement that a supervisor review investigators’ determinations before notifying the claimant of the determination. Instead, VETS’s policy of reviewing claims prior to notifying claimants of the determinations is limited to a random sample of 10 percent of all open claims at the regional level, to ensure that policies and procedures have been followed and all available witnesses have been interviewed, and to any claim that takes more than 90 days, to process to determine why the claim is still open. VETS officials said any claim still open after 90 days appears on a “red flag report” and is to be reviewed by the senior investigator for the region in which the claim is being processed. Other reviews take place after the claim has been closed. According to VETS officials, senior investigators are to review a random sample of 25 percent of closed claims at the regional level. Legal reviews by a DOL regional Office of the Solicitor only occur if a claimant requests to have his or her claim referred to OSC.

OSC’s policy is that the USERRA Unit Chief, an attorney, provides ongoing guidance, reviews all work products in a case, and reviews and approves the letter notifying the claimant of OSC’s determination and, in a case with merit, the demand letter to the agency, prior to sending the letters.

Request for Referral of Claims from VETS to OSC

Under USERRA and the demonstration project, when VETS is unsuccessful in resolving servicemembers’ claims, DOL is to notify servicemembers who filed claims against federal executive branch agencies that they may request to have their claims referred to OSC or file directly with MSPB. A VETS official estimated that about 7 percent of claimants ask for their claims to be referred to OSC or, for nonfederal servicemembers, the Department of Justice.

After Claimant Requests a Referral, Two Additional Reviews at DOL Take Place

According to VETS’s USERRA Operations Manual, after a claimant requests a referral to OSC in writing, the VETS investigator is to prepare a report of investigation called the memorandum of referral, which provides a description of the case and supporting documentation. This triggers two additional sequential reviews at DOL. The memorandum and the case file are then sent to a VETS regional office, which is to review the memorandum of referral to ensure that the investigation is thorough and that the documentation in the file is accurate and sufficient. According to VETS’s USERRA Operations Manual, if the regional office review finds the investigation is incomplete, it is to return the file to the VETS investigator and request additional investigation on specific points. When the regional office is satisfied as to the scope and quality of the investigation, the regional office is to prepare a memorandum and forward it and the case file for review by a DOL regional Office of the Solicitor to assess the claim’s legal basis and prepare a separate analysis before sending the file to OSC. A VETS regional office and a DOL regional Office of the Solicitor separately make recommendations on the merits of the claim.

Even if DOL finds that a claim has no merit, DOL is required by USERRA to send a federal sector claim to OSC if the claimant requested a referral. According to an official from the Office of the Solicitor, this office’s review is not required by law or regulation, but the practice is established through memorandums of understanding with OSC and, for nonfederal claims, the Department of Justice. The official said that both agencies have indicated that they find the practice useful. He added that if OSC did not find the analyses to be valuable, the memorandum of understanding could be renegotiated so as to revise or discontinue the existing process. According to OSC’s USERRA Unit Chief, OSC reviews the Office of the Solicitor’s letter of referral, which OSC finds useful for providing a summary of a case, but does not rely on the Office of the Solicitor’s legal analysis. Instead, OSC does an independent legal review of the case as required by USERRA to determine whether it is reasonably satisfied that the claimant is entitled to the rights and benefits sought.

Under the Demonstration Project, Data Limitations at Both DOL and OSC and Inconsistent Notifications at DOL

We found data limitations at both agencies that made claim outcome data unreliable. At DOL, data limitations affected DOL’s annual report to Congress. We also found that DOL did not consistently notify claimants concerning the right to have their claims referred to OSC for further investigation or to bring their claims directly to MSPB if DOL did not resolve their claims.

VETS’s Data Limitations Affect the Determination of the Number of Claims Processed, Outcomes, and Average Processing Time

Under VBIA, DOL is to prepare an annual report to Congress to include, among other matters, the number of claims reviewed, the number of cases referred to the U.S. Attorney General or OSC, and the nature (type) and status of each case. Specifically, VETS provides information on the number and percentage of claims opened by type of employer, issues raised—such as discrimination or refusal to reinstate—outcome, and total time to resolve.

The number of claims shown in VETS’s database exceeded the number of unique claims VETS processed. Data from VETS’s database showed that from the start of the demonstration project through September 30, 2006, DOL received 202 claims. We found, however, that of these 202 claims, VETS investigated a total of 166 unique claims during this time. The difference of 36 claims was a result of reopened claims for the same claimant being recorded as separate claims, duplicate filings (i.e., filed by the same claimant within 3 days and then claims transferred to OSC after being opened in VETS’s database (i.e., those with odd social security numbers and allegations of prohibited personnel practices), claims originally opened prior to the demonstration project, and one veterans’ preference claim erroneously opened as a USERRA claim.

Of the 166 unique claims investigated by VETS from the start of the demonstration project through September 30, 2006, it closed 155, or 93 percent of them. The remaining 11 claims were still being investigated as of September 30, 2006.

Because of our finding concerning the accuracy of the number of unique claims in VETS’s database during the demonstration project, we reviewed the data DOL reported in its most recent USERRA annual report to Congress for fiscal year 2005. We found that DOL overstated the number of claims filed against federal executive branch agencies because it did not account for duplicate, reopened, transferred, and erroneously opened cases, resulting in an inaccurate number of investigations opened and closed. Specifically, DOL reported that it opened 146 claims involving federal employers, reflecting the number of claims in VETS’s database for fiscal year 2005. Our analysis, however, showed that of the reported 146 claims, 117 were claims actually investigated by VETS in fiscal year 2005.

Additionally, during our review of a random sample of 54 VETS case files to assess the reliability of VETS’s data, we found the closed dates in VETS’s database did not match the date contained in the closure letter to the claimant in 22 of 52 claims reviewed. According to VETS officials, the date closed in VETS’s database should agree with the date of the closure letter, or if VETS requests additional information, the date by which the claimant needed to provide the information to avoid, for example, a determination of “no merit.” For those claims where there was not a match, the difference in the number of days between the actual closed date in the closure letter and in VETS’s database averaged 67 days. Moreover, in nearly all claims where the closed dates in VETS’s database did not match the date in the closure letter, the closed date in VETS’s database preceded the date in the letter. VETS’s USERRA Operations Manual is silent on the date to be used for the official closure of an investigation in VETS’s database, which could have contributed to some of the inaccuracies we found in closed dates.

Because DOL reports annually to Congress on the number and percentage of claims it closed within 90, 120, and 365 days, such inaccuracies in the number of claims reported and the closed dates also affect the quality of information reported to Congress on the time it takes VETS to process claims. VETS senior officials indicated that they had identified problems similar to those we found in a particular region concerning inaccurate closed dates. Citing our preliminary findings, in December 2006, one region issued a memorandum instructing investigators to make the closed date in VETS’s database match the date of the closure letter to the claimant.

Because the closed dates entered in VETS’s database were not sufficiently reliable, we could not use the dates for the time VETS spent on investigations in the database to accurately determine DOL’s average processing time. Instead, we used the correct closed dates from the case files in our random sample and statistically estimated the average processing time for VETS’s investigations from the start of the demonstration project through July 21, 2006—the period of our sample. Based on the random sample, there is at least a 95 percent chance that VETS’s average processing time for investigations ranged from 53 to 86 days.

Additionally, during our review of case files, we found that the closed code, which VETS uses to describe the outcomes of USERRA claims (i.e., claim granted, claim settled, no merit, withdrawn) was not sufficiently reliable for reporting specific outcomes of claims. Therefore, the information that DOL reports to Congress on the number and percentage of claims by outcome is not reliable.

DOL Did Not Consistently Notify Claimants of Right of Referral

At the conclusion of an investigation when VETS is not successful in resolving the claim, USERRA requires VETS to notify servicemembers with claims against federal executive branch agencies of their right to have their claims referred to OSC or to bring their claims directly to MSPB. According to a VETS official, claimants should be notified in writing of the right to referral. For the 54 claims in our sample of VETS’s case files, we found that in the 28 claims VETS was not successful in resolving (i.e., claims not granted or settled), VETS failed to notify claimants of the right to referral in the closure letter in half of these claims. VETS correctly notified five claimants and notified others of only some of their options. In addition, VETS incorrectly advised some servicemembers of a right applicable only to nonfederal claimants—to have their claims referred to the Department of Justice or to bring their claims directly to federal district court. Table 1 shows the extent to which claimants were notified in the closure letter of their right to have their unsuccessful claims referred.

Two possible reasons for VETS’s failure to notify servicemembers in writing of their rights include VETS’s lack of an internal review process and the inconsistent guidance provided to investigators in its USERRA Operations Manual. As discussed earlier, we found that VETS has no internal process to routinely review claim determinations prior to informing claimants of such determinations or closing the claim.

Additionally, VETS failed to provide clear guidance in its USERRA Operations Manual on when to notify claimants of their right to referral, the content of the notification, or any guidance on notifying claimants of their right to bring their claims directly to MSPB. For example, one chapter instructs investigators to notify the claimants of their right to referral if there is no voluntary compliance by the employer, regardless of whether claim has merit, but in another instructs investigators to advise claimants of their right only if the claimant does not concur with the determination. Further, the sample closure letters to claimants contained in the manual are not consistent regarding notifying claimants; those that contain a notification advise claimants of a right to request referral to the U.S. Attorney General, a right applicable to nonfederal claimants. Additionally, VETS’s USERRA Operations Manual does not instruct investigators to notify claimants of their right to bring their claims directly to MSPB. VETS senior officials indicated that they had identified problems similar to those we found in a particular region concerning the lack of consistent notification of the right to referral. It is not clear what course of action VETS took at that time.

Following a briefing on our preliminary findings in December 2006, a VETS official told us that because VETS’s USERRA Operations Manual had not clearly articulated when and how to notify claimants of their rights, some investigators were not aware that claimants should be notified in writing at the end of the investigation. Citing our preliminary findings, VETS officials required each region to revise its guidance concerning the notification of rights. One region issued a memorandum providing specific additional guidance to investigators to notify claimants in the closure letter of their right to a referral or to bring their claims directly to MSPB and provided revised sample closure letters for federal and nonfederal USERRA claims, which other regions were to use as a model. Each region will have its own guidance until VETS completes revisions to its USERRA Operations Manual, which VETS senior investigators began updating January 2007. The manual is expected to be issued in October 2007.

Claims Processed by OSC under the Demonstration Project

From the start of the demonstration project through fiscal year 2006, OSC received 269 USERRA claims and closed 176, or 65 percent of them. The remaining 93 claims were still being investigated as of September 30, 2006. More than 75 percent of these claims included only allegations of USERRA violations. The remaining were mixed claims—allegations of both USERRA violations and a related prohibited personnel practice. Table 2 shows the number and type of claims OSC received and closed during the demonstration project.

Table 3 shows OSC’s average processing time overall and for both USERRA only and mixed claims.

We assessed the reliability of selected data elements in OSC’s case tracking system in an earlier report. We found the closed dates in OSC’s case tracking system to be sufficiently reliable; however, the corrective action data element, which would be used for identifying the outcomes of USERRA claims, was not sufficiently reliable for reporting specific outcomes of USERRA claims.

Claims Referred Took Several Months to Process

We separately reviewed those claims that VETS investigated but could not resolve and for which claimants requested referral of their claims to OSC. For these claims, two sequential DOL reviews take place: A VETS regional office prepares a report of the investigation and makes a recommendation on the merits, and a regional Office of the Solicitor conducts a separate legal analysis and also makes a recommendation on the merits. From February 8, 2005, through September 30, 2006, 11 claimants asked VETS to refer their claims to OSC. Of those 11 claims, 6 claims had been reviewed by both a VETS regional office and a regional Office of the Solicitor and sent to OSC, and 5 were still at DOL. The Office of the Solicitor recommended litigation on 1 of the claims sent to OSC. For those 6 claims, it took from initial investigation through the regional office and regional Office of the Solicitor reviews an average of 247 days or about 8 months before the Office of the Solicitor sent the claims to OSC. Because of the data limitations concerning the reliability of investigations’ closed dates in VETS’s database, it was not possible to isolate the length of time for the two additional reviews.

Of the six referred claims that OSC received from DOL during the demonstration project, OSC declined to represent the claimant in five claims as of September 30, 2006, and was still reviewing one of them. OSC took an average of 61 days to independently review the claims and determine if the claims had merit and whether to represent the claimants.

Three Primary Changes Have Occurred since the Demonstration Project Began

Three primary changes have occurred in federal employees’ USERRA claims’ processing since the start of the demonstration project. First, two agencies now receive and process claims with two different models for investigating USERRA claims from federal executive branch employees—a nationwide approach by VETS that gives much authority to individual investigators in resolving and closing claims and a centralized approach by OSC that has a single individual entering claims into the case tracking system, providing guidance, and reviewing all claims. Second, both DOL and OSC officials have said that since the demonstration project began, cooperation and communication concerning USERRA claims has increased, in turn raising awareness of the issues related to servicemembers who are federal executive branch employees. Finally, technological enhancements have occurred during the demonstration project. For example, an enhancement to VETS’s database enables the electronic transfer of information between agencies. In addition, VETS implemented electronic filing, which eliminates the need for initial data entry by staff.

Two Models Used for Processing Claims

As we discussed earlier, under the demonstration project, two different models have been used for investigating USERRA claims from federal employees. Table 4 identifies characteristics of DOL’s and OSC’s models for processing USERRA claims.

Communication Concerning USERRA Claims Has Increased since the Demonstration Project Began

Under the demonstration project, both OSC and VETS officials said that cooperation and communication concerning USERRA claims has increased between them. Increased communication has in turn, according to these officials, raised the awareness among these two agencies of the issues related to servicemembers who are federal employees. For example, OSC and DOL officials mentioned working together to decide how to process certain types of frequently occurring cases concerning leave issues affecting some servicemembers. OSC also has been meeting monthly with VETS and Office of the Solicitor officials, and OSC participates in the Office of the Solicitor’s monthly telephone conference calls to discuss selected claims they are working on, offer legal advice, and discuss what is happening during each agency’s investigative process. Officials from the Office of the Solicitor and OSC said that these meetings and telephone conferences have been very useful and that during them they discuss issues related to federal employees and how the demonstration project is being handled by DOL and OSC.

Technological Enhancements Have Improved USERRA Claims’ Processing since the Demonstration Project Began

Following a recommendation in our October 2005 report, VETS implemented an enhancement to its database in October 2006 to enable the four USERRA coordinating agencies—DOL, OSC, and the Departments of Defense and Justice—to electronically transfer case information between agencies. Officials from each of the USERRA coordinating agencies are also able to see such claim information as whether a case is open or closed, which agency is currently addressing it, and how long it took to resolve. As such, the database enhancement grants OSC limited access to demonstration project data in VETS’s database, including the ability to view summary data for federal employer cases opened by VETS during the demonstration project period (e.g., case numbers, employer, open and closed dates, and issues concerning a case) and allows OSC to enter case data for demonstration project cases OSC has opened since October 1, 2006. According to OSC’s USERRA Unit Chief, to the extent consistent with the consent provided by claimants, he has been entering information on demonstration project claims into VETS’s database. Officials from each coordinating agency are able to produce a report containing aggregate data on the claims over which they have jurisdiction. For investigations opened by VETS, only VETS has visibility over a claim’s history, from its submission to VETS until it is resolved. The other coordinating agencies have visibility over only those claims that were opened by or referred to them. According to VETS officials, when the enhancement was being developed, the Office of the Solicitor determined that because of the sensitive nature of the information that the enhanced VETS’s database may contain, except for VETS, full access to all data fields for a claim would be limited to those cases within each agency’s jurisdiction.

Another technological enhancement by VETS is the implementation of electronic filing. A VETS official told us that from July 18, 2005, the date on which electronic filing of USERRA claims at VETS became available, through September 30, 2006, about 39 percent of USERRA claims from servicemembers employed by federal executive branch agencies were filed with VETS electronically. As we said earlier, electronic filing of claims directly enters the information into VETS’s E-filing database first and then into VETS’s database, records the date the claim was received, and sends an automatic response to the claimant. This eliminates the need for initial data entry by staff and avoids the introduction of error when staff manually enter data. Also, when a claimant files electronically, VETS’s database sends an automatic message to OSC to determine whether any prohibited personnel practice cases have been filed by the claimant.

In addition, according to OSC, although VBIA did not require that OSC modify its existing system, OSC enhanced its case tracking system to maintain demonstration project data that would be useful in tracking USERRA claims. For example, on October 1, 2006, OSC began tracking a claimant’s status as veteran, disabled veteran, reservist, guardsman, or other and the claimant’s allegation, such as veteran discrimination, disabled veteran discrimination, reservist reemployment, and reprisal. According to OSC, maintaining this information will enable OSC to prepare reports showing the number and the types of allegations filed by various claimant groups.

Conclusion

At a time when the nation’s attention is focused on those who serve our country, it is important that policymakers have reliable information about the extent to which employment and reemployment rights are protected for applicants to and employees of the federal government who leave their employment to perform military or other uniformed service. While we did not assess the quality of the claims investigations or the correctness of outcomes, we believe that DOL’s controls and oversight of the claims process need to be improved. DOL does not consistently notify servicemembers of their right to have their claims referred to OSC or to file directly with MSPB if DOL is not successful in resolving their claims, which may have prevented some servicemembers from seeking further review of their claims. Moreover, VETS’s database does not contain sufficiently reliable data for purposes of our review on the number of cases, outcomes, and the time to investigate claims. Additionally, DOL has a lengthy two-phase review process that has servicemembers waiting months before the referral of their claims takes place.

We note that VETS uses the same process, including the same procedures, practices, investigators, and database, for federal and nonfederal USERRA claims. The same kinds of problems that we found in our review of federal USERRA claims may be occurring for nonfederal claims.

Citing our preliminary findings, in December 2006, VETS officials took action to rectify some of the identified shortcomings. While we view these actions as positive and a step in the right direction toward clarifying steps that VETS investigators are to take, VETS still lacks uniform policies and quality controls to help ensure that servicemember employment rights are protected and that Congress receives accurate information.

Recommendations for Executive Action

We recommend that the Secretary of Labor direct the Assistant Secretary for Veterans’ Employment and Training to implement the following four actions: Incorporate into the formal update to VETS’s USERRA Operations Manual the guidance from a VETS regional office December 2006 memorandum on the procedures that investigators should follow concerning the notification of a claimant’s right to referral and the appropriate closed date in VETS’s database.

Require all VETS investigators to undergo mandatory training on the procedures to be followed concerning notification of a claimant’s right to referral to help ensure that servicemembers know their rights under USERRA.

Develop and implement an internal review mechanism for all unresolved claims before claimants are notified of determinations and claims are closed to help ensure adherence to all procedures and standards.

Establish a plan of intended actions with target dates for implementing internal controls to ensure that VETS’s database accurately reflects: the number of unique USERRA claims filed annually against federal executive branch agencies, the dates those claims were closed, and the outcomes of those claims, to ensure that accurate information on USERRA claims’ processing is available to DOL and to Congress.

Agency Comments and Our Evaluation

We provided a draft of this report to the Secretary of Labor and the Special Counsel for their review and comment. In written comments, which are included in appendix II, the Assistant Secretary for Veterans’ Employment and Training agreed with our recommendations and discussed actions that DOL is taking to address the recommendations.

In written comments, which are included in appendix III, the Special Counsel disagreed with our statement that OSC’s corrective action data element, which OSC uses to describe the results or outcomes of USERRA claims, was not reliable. He also notes that the report does not address the differences between the results and time taken to get results by OSC versus DOL. As stated in our report, during our review, OSC and DOL provided us with data on USERRA claims processed, but because the data element for outcomes was not sufficiently reliable in either agency’s database, we do not report on outcomes. Also in his written comments, the Special Counsel references a December 2006 letter to us in which he expressed disagreement with a methodology used in calculating the time an investigative file is with DOL’s Office of the Solicitor. The December letter refers not to the methodology in this report but rather to a preliminary methodology used in another GAO engagement. Our methodology for this engagement, which includes a discussion of the time an investigative file is with DOL’s Office of the Solicitor, is discussed in this letter and in more detail in appendix I.

In addition, both the Assistant Secretary for Veterans’ Employment and Training and the Special Counsel provided their views on the demonstration project and their respective agency’s role in processing USERRA claims.

We will send copies of this report to the Secretary of Labor, the Special Counsel, and other interested parties. Copies will be made available to others upon request. This report will also be available at no charge on GAO’s Web site at http://www.gao.gov.

If you have questions about this report, please contact me on (202) 512- 9490 or at stalcupg@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Staff who made major contributions are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) describe the Department of Labor’s (DOL) and Office of Special Counsel’s (OSC) policies and procedures for processing federal employees’ Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) claims under the demonstration project; (2) identify the number of federal employees’ USERRA claims that DOL and OSC received and the outcomes of these claims, including average processing times; and (3) identify changes to federal employees’ USERRA claims’ processing since the demonstration project began.

Objective 1: Describe DOL’s and OSC’s Policies and Procedures for Processing Federal Employees’ USERRA Claims under the Demonstration Project

To describe DOL’s and OSC’s policies and procedures for processing federal employees’ USERRA claims under the demonstration project, we reviewed applicable laws, including USERRA and the Veterans Benefit Improvement Act of 2004, and regulations; agency policies, memorandums of understanding, and correspondence between DOL and OSC; DOL and OSC USERRA claims’ processing manuals; other internal guidance and program information; and DOL’s annual USERRA reports to Congress. We also interviewed knowledgeable DOL and OSC officials. At DOL, we interviewed officials from its Veterans’ Employment and Training Service (VETS) National Office, VETS’s Atlanta Regional Office, and DOL’s Office of the Solicitor. At OSC, we interviewed the USERRA Unit Chief.

Objective 2: Identify the Number of Federal Employees’ USERRA Claims that DOL and OSC Received and the Outcomes of These Claims, Including Average Processing Times

To identify the number of federal employees’ USERRA claims that DOL and OSC received and the outcomes of these claims, including average processing times, we obtained information on all the USERRA claims filed against federal executive branch agencies that DOL and OSC received from February 8, 2005—the beginning of the demonstration project— through September 30, 2006. We excluded claims from our analysis identified by DOL and OSC as being brought by Transportation Security Administration security screeners and supervisory security screeners because they are not covered by USERRA, specifically 7 claims at DOL and 10 claims at OSC.

Data Reliability

We also assessed the reliability of data on federal employee claims from VETS’s database, the USERRA Information Management System, and OSC’s case tracking system, OSC 2000, by tracing a statistically random sample of data to case files. Concerning the reliability of VETS’s data, for selected data elements including open date, closed date, closed code, agency name, regional office action date, and Office of the Solicitor action date, we compared the electronic data in VETS’s database to the source case files for 54 randomly selected cases received between February 8, 2005, and July 21, 2006. We assessed reliability by the amount of agreement between the data in VETS’s database and the source case files. In addition, for each selected data element, we excluded claims if information was missing from the case file, thus preventing a comparison between data in VETS’s database and the case file. We did not evaluate the accuracy of the source case files for the data elements reviewed. For data elements pertaining to time (i.e., open date and closed date), we considered the date a match if the date in VETS’s database was the same or within 1 day of the date reflected in the case file.

We determined that data contained in the closed date and closed code fields were not reliable for purposes of this study. Specifically, we found that the closed dates in VETS’s database did not match a closed date indicated in the case files in 22 of 52 claims. We considered the closed date a match if the date in VETS’s database was the same as either the date of the closure letter, the date indicated in the closure letter by which a claimant had to respond to a request for information, or the date stated in the closure letter indicating when the investigation was closed. Thus, we are 95 percent confident that between 31 and 53 percent of the closed dates in VETS’s database would not match between the VETS’s database and the source case files. Regarding the closed code, which VETS uses to describe the outcomes of USERRA claims (i.e., claim granted, claim settled, no merit, withdrawn) we are 95 percent confident that as many as 16 percent of the outcomes would not match between the VETS’s database and the source case files. While our analysis of VETS’s database showed that about one-fifth of claimants received partial or full relief, we found that this data element was not sufficiently reliable for reporting specific outcomes of claims. We determined that the other data elements—open date, agency name, regional office action date, and Office of the Solicitor action date—necessary to answer our objectives were sufficiently reliable for purposes of this review.

Concerning the reliability of OSC’s data, in an earlier report we assessed the reliability of selected data elements in OSC’s case tracking system for USERRA claims by comparing them to the source case files. We reviewed the selected data elements for a statistically random sample of USERRA claims and determined the corrective action code, which OSC uses to describe the outcomes of USERRA claims, was not sufficiently reliable. Specifically, we are 95 percent confident that as many as 24 percent of the outcomes would not match between the case tracking system and the source case files. While our analysis of OSC’s data showed that about a quarter of claimants received full relief, this data element is not sufficiently reliable for reporting outcomes of claims. We determined that the other data elements—date received, date closed, agency name, case type, case subtype, and action office—were sufficiently reliable for purposes of this review.

Determining the Number of Claims Received

We reviewed data from VETS’s database from February 8, 2005, though September 30, 2006, to determine the number of claims processed by DOL during the demonstration project. In doing so, we found that VETS’s database records as separate claims (1) duplicate filings by the same claimant, (2) reopened claims for the same claimant, and (3) claims transferred to OSC. To determine the number of unique claims opened by VETS, we removed claims opened prior to the demonstration project; removed claims transferred to OSC after being opened in VETS’s database (i.e., those with odd social security numbers and allegations of related prohibited personnel practices); removed duplicate filings (i.e., those opened within 3 days of another claim brought by the same claimant and subsequently closed, while the original claim remained open); removed one veterans’ preference claim identified by VETS as being inadvertently opened as a USERRA claim; and combined and counted as one claim original and reopened claims where both were opened during the demonstration project.

Because the number of claims shown in VETS’s database exceeded the number of unique claims VETS investigated, we concluded that the data in VETS’s database were not sufficiently reliable for determining the number of claims. As a result of the steps we took to identify the number of unique claims DOL received, the number of claims received went from 202 shown in VETS’s database from February 8, 2005, through September 30, 2006, to 166—the number we used for purposes of this review.

Because of our concerns over the reliability of the number of claims in VETS’s database for the demonstration project, we also analyzed the number of claims in VETS’s database for fiscal year 2005 and compared it to the number of claims filed against federal executive branch agencies that DOL reported in its fiscal year 2005 USERRA Annual Report to Congress. To determine the number of unique claims processed by VETS in fiscal year 2005 that were filed against federal executive branch agencies, we used a methodology similar to the one used to determine the number of unique claims during the demonstration project. We again found that DOL had not removed duplicate, reopened, transferred, and erroneously opened federal USERRA claims. Specifically, DOL reported that it opened 146 claims involving federal employers for fiscal year 2005, reflecting the number of claims involving federal employers in VETS’s database for fiscal year 2005. Our analysis, however, showed that of the reported 146 claims, 117 unique claims were investigated by VETS in fiscal year 2005.

To determine the number of claims processed by OSC during the demonstration project, we analyzed data from OSC’s case tracking system for claims alleging only violations of USERRA and claims alleging both violations of USERRA and related prohibited personnel practices.

Determining Average Processing Time for DOL

Because the closed dates entered in VETS’s database were not sufficiently reliable, we could not use the average of the time VETS spent on investigations reflected in its database to accurately determine DOL’s average processing time. Instead, to determine average processing time, we used the correct closed dates from the case files in our random sample and (1) estimated average processing time for VETS investigations from the start of the demonstration project through July 21, 2006—the period of our sample—and (2) calculated the actual total DOL average processing time for those claims referred to OSC.

VETS Investigations

To determine VETS’s average processing time, we used the data from the sample of cases because the closed dates for all claims in VETS’s database were not sufficiently reliable for our purposes. Where the closed date in VETS’s database did not match the date in the closure letter, we used the correct dates obtained from our review of the hard copy case files and generated estimates from the sample of cases, which were opened and closed from February 8, 2005, through July 21, 2006—the period of our sample. Based on the random sample, we are 95 percent confident that VETS’s average processing time for conducting investigations was between 53 and 86 days. Because our sample contained only one case that received the two additional reviews at DOL after the VETS investigation was closed, (i.e., by a VETS’s regional office and the Office of the Solicitor) before being referred to OSC, we could not reliably use this same process to estimate the average processing time for all of DOL’s USERRA claims’ processing.

DOL’s Referrals to OSC

We separately reviewed those claims that VETS investigated but could not resolve and for which claimants requested referral of their claims to OSC. From February 8, 2005, through September 30, 2006, for 16 claims in the VETS’s database, claimants asked VETS for referral to OSC. Of those 16 claims, 5 were reopened (i.e., claims brought by the same claimant), which we combined with their original claims, and 5 were still being reviewed at DOL. The other 6 claims had not been reopened. Thus, 11 unique claims were to be referred to OSC. Of the 11 unique claims, 6 had been reviewed by both a VETS regional office and the Office of the Solicitor as of September 30, 2006 (3 of the reopened claims and 3 of the others). To calculate the average processing time for DOL to process claims that were referred through DOL to OSC using actual dates, we used the average processing time of these 6 claims. We based this average on the number of days that it took DOL to process a claim from the date that VETS opened the investigation through the date that the Office of the Solicitor completed its review and made a recommendation to OSC. Because we found the closed dates of VETS investigations entered in VETS’s database were not sufficiently reliable for our purposes, we could not determine how long it took the VETS regional office and the Office of the Solicitor to process referrals following VETS investigations.

For each of the three claims that were reopened, there were two open dates. Because we determined that the closed dates in VETS’s database were unreliable, we could not accurately account for the time these claims had been closed before they were reopened. To compensate for this, we calculated the processing time for these three reopened claims in two ways: (1) using the open date of the first claim and (2) using the open date of the reopened, or second claim, in VETS’s database. We then calculated two averages using each of the processing time calculations for the three claims. For the remaining three claims that were referred but not closed and reopened, there was only one open date to use in calculating processing time, which was used in both calculations of average processing time for the six referrals. The difference in the average processing time between these two calculations was about 31 days. For purposes of this report, we use the approximate midpoint obtained from each of the calculations—about 247 days or 8 months.

Determining Average Processing Time for OSC

To determine the average processing time for all OSC claims, USERRA only, and mixed claims, using the data in OSC’s database, we calculated the number of days from and including the date that the claim was opened through the date that the claim was closed.

Notification of Rights

During our review of a sample of VETS’s case files, for claims that were not successfully resolved, we reviewed the extent to which VETS notified claimants in closure letters of their right to have their claims referred to OSC or to bring them directly to MSPB using a private attorney. We defined “not successfully resolved” as those claims that did not have a closed code in VETS’s database of “claim granted” or “claim settled.” As a result, we excluded from our analysis of the 54 claims in the sample those claims with a closed code in VETS’s database of claim granted or claim settled. We also excluded those claims that we were able to identify (1) as subject to the Defense Finance and Accounting Service administrative procedure to resolve their Butterbaugh claims, (2) a veterans’ preference claim that was inadvertently opened as a USERRA claim, (3) a file of a duplicate claim, or (4) those withdrawn by the claimant. In total, we included 28 closure letters from our random sample of 54 claims in our review.

Objective 3: Identify Changes to Federal Employees’ USERRA Claims’ Processing since the Demonstration Project Began

To identify changes to federal employees’ USERRA claims’ processing since the demonstration project began, we reviewed applicable law, regulations, and legislative histories. We also reviewed relevant documentation about claims’ processing prior to the demonstration project and compared that to relevant documentation from DOL and OSC regarding claims’ processing during the demonstration project. We also interviewed knowledgeable DOL and OSC officials and representatives from veterans’ service organizations, including The American Legion, Military Officers Association of America, National Guard Association of the United States, Paralyzed Veterans of America, Reserve Enlisted Association, Reserve Officers Association, Veterans of Foreign Wars of the United States, and Vietnam Veterans of America.

We conducted our work from May 2006 to May 2007 in accordance with generally accepted government auditing standards.

Appendix II: Comments from the Department of Labor

Appendix III: Comments from the Office of Special Counsel

Appendix IV: GAO Contact and Staff Acknowledgments

Acknowledgments

In addition to the individual named above, Belva Martin, Assistant Director; James Ashley; Karin Fangman; Tamara F. Stenzel; Kiki Theodoropoulos; Jason Vassilicos; Michael R. Volpe; and Gregory H. Wilmoth made key contributions to this report.