EXECUTIVE SUMMARY

This testimony addresses five issues related to the Uniformed Services Employment and Reemployment Rights Act, as well as the Servicemembers Civil Relief Act.

• The NDAA of 2008.  The NDAA of 2008 contains a clause that confirms that court ordered stay provisions under SCRA do apply to child custody proceedings.  In the past several state courts had incorrectly held that SCRA did not apply to domestic relations.  The NDAA of 2008 clarified this important issue.
• Six Percent Interest Rate for Pre-Mobilization Debt.  Some Servicemembers in Arkansas do not receive debt relief because their income is not materially affected during a mobilization.  However, it is important to point out that most creditors comply with the law even when they are under no obligation viewing this as their part of the war effort.
• Continued Enforcement of SCRA/USERRA under the Department of Justice's Civil Rights Division. Servicemembers seeking help under SCRA first contact the military assistance judge advocate's office.  If the JAG cannot resolve the matter and determines that assistance from the Department of Justice would be appropriate, the JAG will submit a request to the Civil Rights Division or U.S. Attorney's Office.
• Awarding of Attorney's Fees.  Currently if a Servicemember has an issue and is required to pursue legal action to enforce rights under SCRA there is no provision for recovery of the cost of an attorney.  If SCRA was amended to allow the recovery of attorney's fees, it could increase the number of attorneys willing to represent our Servicemembers in SCRA court actions.
• Employment Concerns.  There is mounting evidence that employers are becoming more reluctant to hire members of the Reserve components because of repeat, second and third, deployments.  There have been recommendations to provide incentives for employers to hire Guardsman.  These include: tax incentives, health benefits, eliminating social security and retirement penalties for retirees who temporarily backfill deployed Servicemembers, reimburse replacement training expenses, and reimbursing municipalities for overtime for policeman and fire fighters that are required to fill in for deployed Servicemembers.

Once again I would like to thank the Committee for all of their efforts in these matters.  

Chairwoman Herseth Sandlin and distinguished members of the Committee, I am Major General William D. Wofford, and I am testifying in my position as the Adjutant General for the State of Arkansas. Please understand that my testimony today reflects my views as the Adjutant General of Arkansas and does not necessarily reflect the views of the Army, the Department of Defense, or the Administration.  Thank you for the opportunity to personally appear before you and submit this written testimony relative to issues pertaining to the support of our National Guardsmen. Your invitation encouraged me to address the following issues:

1. The successful passing of the provision related to child custody in the National Defense Authorization Act of 2008
2. The six percent cap on interest rates on pre-mobilization debt for mobilized Servicemembers
3. The Department of Justice Civil Rights Division for enforcement of Servicemembers Civil Relief Act (SCRA) and USERRA issues
4. Possibly including a provision to award attorney's fees under SCRA
5. Employment concerns of the Reserve forces

THE NATIONAL DEFENSE AUTHORIZATION ACT OF 2008

I would like to begin my testimony by thanking the Congressional staff for their hard work on the inclusion of a very important clause in the NDAA of 2008: the affirmative clause that court-ordered stay provisions under SCRA do apply to child custody proceedings.

During previous military mobilizations, military legal assistance officers advised Servicemembers that they would not lose custody of their children due to an impending deployment because of the Soldiers and Sailors Relief Act. 

When the Arkansas National Guard began mobilizing in 2003 for operation Iraqi Freedom, Arkansas JAG office attorneys also advised our Guardsmen that they would not lose custody of their children while they were deployed because the Soldier's and Sailor's Relief Act would allow for a stay of proceedings while they were fighting our country's wars. 

Unfortunately, several state courts, including Arkansas' case Lenser v. McGowan, have incorrectly held that the newly created Servicemembers Civil Relief Act did not apply to domestic relations.  This left Servicemembers who were custodial parents in a position of choosing between fighting for their country - or ignoring military orders to fight for custodial rights.  This is the dilemma that most military attorneys agree the Servicemembers Civil Relief Act intended to prevent. 

In Lenser v. McGowan, SPC Michael Lenser and his wife were having a custody dispute over their child.  SPC Lenser asked the Court for a Stay since he had already mobilized from National Guard status to active duty status for an eighteen month mobilization that included a year long deployment to Iraq.  The trial court denied his initial stay request and entered an order awarding custody to the child's mother. 

Then the Court further stayed the matter until he returned from the deployment.  SPC Lenser appealed this ruling and the Arkansas State Supreme Court agreed with the lower court's ruling.  The Supreme Court ruled that a lower court has jurisdiction to consider matters such as support, custody, and other similar matters that arise during the course of the stay. This ruling in large part nullifies the intent of the Servicemembers' Civil Relief Act.

This contributed to SPC Lenser's dilemma of serving his country or keeping custody of his child.  Lenser had no court enforceable rights to his child during his deployment.  In order to talk to the child or visit the child during his fifteen days of leave from theater, Lenser was required to have the consent of his wife  Neither were the child's paternal grandparents be allowed to visit the child during his deployment unless the wife consented.

Once SPC Lenser returned from Iraq, he divorced his wife and now has custody of the child, but the personal and emotional conflict suffered by SPC Lenser and his parents was exactly what the SCRA intended to avoid.

Congress answered this issue in the NDAA of 2008.  Section 522 of SCRA now specifically states that the act applies to child custody cases.  I thank the Congress  for their hard work ensuring that Servicemembers are no longer in the position of choosing between their families and their country.  This was one of the most pressing issues of SCRA and it appears to be resolved

SIX PERCENT INTEREST RATE CAP ON PRE-MOBILIZATION DEBT

When a Servicemember mobilizes, they are entitled to have all pre mobilization debt reduced to a maximum 6% interest rate if their income is materially affected. 

While the majority of creditors do allow Arkansas Guardsmen to reduce their interest rate, oftentimes our Servicemembers don't receive the debt relief under the law because the Servicemember's income is not materially affected under the law in order to trigger the debt relief provisions. 

While the majority of our Arkansas Servicemembers do enjoy the same debt relief, it's due to creditors voluntarily reducing the interest rate because of their support of Servicemembers. However, if the letter of the law was upheld, many Servicemembers would not receive this benefit.

There is a "gray area" that allows for a creditor to compel a Servicemember to prove that their income is materially affected before they will reduce the interest rate to six percent.  Under SCRA, it's clear that it is the creditor's responsibility to prove that the Servicemember's income has been materially affected. Currently, as things stand, it is often the Servicemember who has to take the time to prove their income has been affected. This is clearly an unfair burden on the Servicemember or family; they have to spend their last days together before deployment gathering and providing information to prove their amount of income. This is an encumbrance when the Servicemember is preparing for war. 

In other cases, creditors may reduce the interest rate, but not reduce the minimum payment. This should also be reduced and is problematic for Servicemembers and the families they leave behind. Under this, the monthly payment remains the same, although there is more of the amount going to pay down the principal of the loan. However, this still negates the intent of the act which is to reduce debts for a Servicemember while answering their country's call. 

I would like to emphasize that this is an issue with only a minority of creditors.  Most are happy to comply with the SCRA and see reducing the interest rate as their way of supporting our Servicemembers.  Some creditors have gone so far as to reduce all interest rates while a Servicemember is deployed.  This not only helps the Servicemember while they are deployed, but allows them to further reduce their principal once they return.  These creditors should be commended for going above and beyond.  

CONTINUED RESOURCES FOR THE DEPARTMENT OF JUSTICE CIVIL RIGHTS DIVISION FOR SCRA AND USERRA COMPLIANCE

We need continued enforcement under the Department of Justice’s Civil Rights Division on SCRA issues. While the Division continues to build the SCRA enforcement program, since receiving enforcement authority in 2006, the division has opened several investigations and has resolved the first such investigation with a favorable outcome.

In addition, the Division engages in a sustained outreach effort, which includes visiting military bases throughout the country to educate and inform JAG attorneys that it is actively investigating SCRA matters and stands ready to help them with enforcement. 

The process is that Servicemembers who are seeking help under SCRA first contact their military assistance judge advocate in the Arkansas National Guard.  If the JAG cannot resolve the matter and determines that assistance from the Department of Justice would be appropriate, it will submit a request to the Civil Rights Division or a U.S. Attorney's Office.  This office complements private enforcement actions brought by private counsel representing a Servicemember. It is important that the division continue its work with the Servicemembers and JAG legal assistance attorneys to ensure Servicemembers’ rights are respected under SCRA. 

In Arkansas, we’ve had a number of SCRA issues come up with the last deployment of the 39th Brigade; fortunately, the issues were usually resolved between the Servicemember, the opposing party and the local National Guard judge advocates.

Having Department of Justice assistance to ensure SCRA provisions are upheld, is invaluable support and we ask for this Committee's continued support in SCRA and USERRA issues.

AWARDING OF ATTORNEY'S FEES

Generally, Servicemembers' creditors, employees, and landlords deserve to be  commended on the sacrifices that they make to ensure that a Servicemember is prepared to leave his civilian position and fight in the war effort.  However, some of these entities are not aware of the protections of SCRA and others choose not to comply.

Unfortunately, if a Servicemember has to pursue legal action to enforce their rights through SCRA, there is no provision for recovery of the expense of the attorney he must hire to get relief. 

To help ensure the protections Congress has provided under federal law, we request that you consider amending the SCRA to add a provision authorizing courts to award exemplary or punitive damages and attorneys’ fees to Servicemembers whose rights are violated intentionally or willfully under SCRA.  This change would be reflective of the Civil Rights Act's provisions and fulfill its intentions. 

In most cases, the amount in controversy is insufficient to allow an attorney to proceed on a contingency basis.  While National Guard judge advocates are ready to try to resolve the issue, they are not allowed to represent Servicemembers in actual court proceedings.  Further, most attorneys will not accept SCRA violation cases on a commission basis because there simply is little financial reward.  If an amendment was passed by Congress to allow the recovery of attorney's fees, it would increase the number of attorneys willing to represent our Servicemembers.

EMPLOYMENT CONCERNS OF THE RESERVE FORCES

Before I discuss this issue, I would like to emphasize that our Servicemembers in the Arkansas National Guard receive outstanding support from employers when our members are called to duty.  Even after seven years of executing the global war on terror, Arkansas employers continue to demonstrate tremendous patriotism and dedication to ensuring our service members and their families are cared for while they are mobilized.

However, I would like to share with you a growing concern.  Although our employers demonstrate solid support for their employees that are called to active duty, there is mounting evidence that employers are becoming reluctant to hire members of the reserve components because of repeat, second and third, deployments. 

It has become apparent that those traits exhibited by members of the Guard and Reserves that make them valuable employees: leadership, professionalism, physical condition, maturity, and a "can-do" attitude, are no longer considered to be cost effective advantages if they are going to be deployed for twelve months every 3 or 4 years.  The business men and women that are responsible to their superiors and stakeholders are making hiring decisions that will best help their organization's financial bottom line. 

For over a year I have taken the opportunity to speak to numerous civic organizations, chambers of commerce, and business leaders around the state of Arkansas about the National Guard.  I certainly emphasize the advantages to their businesses that come with hiring Guard Members because of their work ethic and character traits.

However, I also ask them one simple question: "What incentives must we, as a nation, try to develop to ensure it is profitable for employers to hire a Guardsman?"   I have received some valuable feedback that I would like to share with you.  Much of this feedback is resounding evidence that the transition of the Reserve Components from a strategic reserve to an operational force has taken a drastic toll on businesses, and has had a definitive impact in those business considerations used when making hiring decisions.

This has led me to advance a few recommendations that would help make it cost effective for business leaders, especially in small businesses, to hire a member of the Guard or Reserves.

One recommendation is a tax incentive for employers; another is to provide health benefits for Servicemembers and their families on an ongoing basis, so businesses don't have to provide health care as part of a benefits package. Also eliminating social security and retirement penalties for those retirees who temporarily backfill deployed or mobilized Servicemembers would provide considerable relief. Another is reimbursed replacement training expenses for businesses. And finally, reimbursing municipalities for overtime for policemen or fire fighters that are required to fill in for deployed Servicemembers would go a long way to providing a strong support network for our country and a continuity in the workforce when our Servicemembers are called to serve.

Chairwoman Herseth Sandlin and distinguished members of this Committee, I apologize for veering off somewhat from the USERRA and SCRA topics that we were invited here to address today, but I feel it is imperative that we examine possible initiatives and help build a strong case to make it cost effective for business leaders of our nation to continue hiring members of the Reserve Components. 

Several months ago, I made the comment to Dr. L. Gordon Sumner, Jr., National Director of the Employer Support to the Guard and Reserve Program, that if we did not make it cost effective for business men and women to hire members of the Guard and Reserves, we would not be able to maintain a Reserve Component five years from now.  He corrected me by responding that if we don't do something soon about this issue we will not have a Guard and Reserve three years from. 

I appreciate this opportunity to submit testimony to the Committee on Veterans Affairs Subcommittee on Economic Opportunity.  On behalf of our Servicemembers, I would like to thank you for all the hard work and service you provide.  The Arkansas National Guard especially thanks you for the support that you provide us.  I look forward to answering any questions that you may have on August 18, 2008.