Adviser Wins $1M from Wachovia in USERRA Suit

The U.S. District Court for the District of Connecticut ruled that Wachovia Securities constructively discharged reservist Michael Serricchio when it offered him a much less compensated position upon his return from active duty. The court rejected Wachovia’s argument that Serricchio failed to fulfill his obligation to minimize his wage loss by not accepting the inferior offer or by not seeking other employment as a financial adviser.

In September 2001, Serricchio left his job as a financial adviser for the securities division of Prudential Financial in Stamford, Connecticut, where he was making $80,000 annually, to go on active duty with the Air Force Reserve. He spent more than two years on active duty. When Serricchio returned to Connecticut, Prudential Financial’s securities unit had merged into Wachovia Securities and his clients had dispersed. Wachovia offered him a job that paid a $2,000-a-month advance on his commissions and he declined the offer.

Serricchio and his wife started a tanning salon after he rejected Wachovia’s offer, and the court cited other cases in which it was found that self-employment was an appropriate way to mitigate the loss of wages.

Under USERRA, a person returning to employment from military service “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 security and rights and benefits that such person would have attained if the person had remained continuously employed.”

After reviewing several expert calculations of what Serricchio’s wages would have been had he remained in continuous employment, the court decided he was due $680,312, less his estimated mitigating earnings of $290,859, for a total back-pay award of $389,453. The court also awarded liquidated damages in the amount of $389,453, for a total of $778,906, plus prejudgment interest, fees, and costs.

In addition, Wachovia was ordered to reinstate Serricchio, effective April 1, to a financial adviser position with the full package of normal employment benefits in Springfield, Massachusetts, or in another geographically reasonable location. For three months, Wachovia is to pay Serricchio $12,300 per month for a year, after which Serricchio will be responsible for generating his own income through his client accounts.

The court opinion is available here.