United States v. Kansas: USERRA Employer Status Could Extend Beyond the Agency Issuing the Paycheck

In United States v. State of Kansas Department of Health and Environment, No. 24-3041 (10th Cir. Dec. 30, 2025), the Tenth Circuit reversed summary judgment that had excluded Kansas as a USERRA employer. A county issued the servicemember's paychecks, but the state agency's involvement in hiring, funding, training, and evaluating her work created factual questions about control over employment opportunities. The decision did not establish that military discrimination occurred or finally determine employer status.

The published opinion interprets federal law in a Tenth Circuit appeal from Kansas; it is not a Ninth Circuit ruling or a decision applying California's separate employment statutes.

The state agency funded and helped direct a county position

Stacy Gonzales worked as a local disease intervention specialist for Finney County and also served in the Army National Guard. Kansas's Department of Health and Environment distributed grant funding to the county, established substantive work expectations, and participated in training, oversight, and evaluation. The county determined salary and benefits and issued her paychecks. Slip op. at 4–7.

After concerns about performance and grant objectives, the agency did not renew the funding. The county eliminated the position, and Gonzales's employment ended. The United States sued on her behalf under the Uniformed Services Employment and Reemployment Rights Act. The parties' cross-motions presented the narrow issue whether Kansas, acting through the agency, was her employer. Id. at 7–8.

The appeal's caption names the United States and Kansas, not Gonzales as the plaintiff. That distinction matters when locating the actual opinion and docket.

USERRA supplies its own employer definition

Under 38 U.S.C. § 4303(4)(A), an entity can qualify because it pays wages or because it controls employment opportunities. The court rejected a reading that would require direct or absolute control. It also explained that shared or co-determined employment responsibilities can support more than one employer. Slip op. at 9–13.

The opinion relied on the statutory text and found support in 20 C.F.R. § 1002.37, which illustrates a security employee reporting both to a security company and to the owner of the assigned site. The question remains whether each entity satisfies the applicable statutory requirements. Id. at 11–13. A funding relationship alone does not automatically make every grantor an employer, and employer definitions under other statutes cannot simply replace USERRA's definition.

The paycheck answered only one route

The government did not dispute that the county controlled pay and benefits and issued Gonzales's salary. Accordingly, the record did not establish Kansas as the wage-paying employer under the first route. Id. at 15–16.

But that conclusion did not dispose of the independent control route. The district court's reasoning had treated the grant relationship as insulating the agency from employment control. The appellate court required examination of the agency's actual role rather than treating contractual labels or payroll arrangements as a complete answer. Id. at 16–22.

Hiring, grant renewal, and supervision supplied disputed evidence

The record included disputed recollections about the agency's participation in Gonzales's interview and evidence of its usual role in ranking candidates. The agency decided whether to renew funding, which in one fiscal year supplied approximately 86 percent of her salary. Termination of the grant led to elimination of the position. These circumstances required proper consideration under the summary-judgment standard. Id. at 17–19.

Training, audits, substantive performance feedback, and joint evaluation also mattered. The county administrator addressed workplace conduct and filled out the evaluation form, but agency personnel supplied technical performance information. Viewing only the county's supervision omitted another part of the relationship. Id. at 19–22.

The court did not convert each piece of evidence into a mandatory checklist or find that one funding percentage always establishes control. The point was that the combined evidence permitted a reasonable finding and could not be resolved against the nonmoving party at this stage.

Reversal reopened issues rather than deciding the discrimination claim

The court reversed the employer-status summary judgment and remanded. Kansas had raised additional arguments, including merits, laches, and injunctive-relief issues that the district court had not resolved. Id. at 8 n.5, 22–23. The opinion therefore did not award reinstatement, backpay, or damages, and it did not determine that every grant-supported worker has two employers.

For another servicemember's case, organize military-service notices, the challenged employment decision, payroll records, contracts or grants, hiring communications, training directions, performance assessments, and each entity's role in the decision. Keep employer identity separate from whether service motivated an unlawful action and from what relief is available. A current matter also requires review of governing local precedent and later proceedings; this historical analysis explains the December 30 opinion itself.

Our employment-law practice can evaluate how the actual control and service-related decision records fit the applicable framework. A workplace relationship can involve several organizations, but the legal test must match the particular claim rather than a general intuition about who was “really” in charge.