A National Guardsman who lost his job as civilian contractor when it was “in-sourced” by the Army while he was serving in Iraq in 2010 has received a settlement that attorneys say breaks new ground in the government’s employment responsibilities to servicemembers.

The Office of Special Counsel, an independent federal investigative agency which represented the soldier, made use of a 2010 change in federal law to hold the Army accountable.

“We believe the obligation to rehire him moved from the private sector to the Army when the job moved from the private sector to the Army,” said Joseph M. Scaturo, the OSC attorney who handled the case.

It is against federal law for employers to penalize service members because of their military service under the terms of the Uniformed Services Employment and Reemployment Rights Act or USERRA.

A change to the law in 2010 clarified that the obligation follows the new employer when jobs change from private to public sector positions.

Michael Hanke, a 46-year-old resident of Chippewa Falls, Wisc. worked in 2009 at Communications Technology, Inc., or ComTek, a company that supports Army ROTC programs. He was part of the cadre operating the ROTC program at the University of Wisconsin-Stoudt.

While he was deployed to Iraq as a sergeant first class with the Wisconsin Army National Guard in 2009 and 2010, the U.S. Army Cadet Command, which oversees ROTC programs, in-sourced much of the work previously done by ComTek, hiring many of the same employees.

But the command told Hanke he could not be hired while on active duty, and when he requested reemployment upon returning in 2010, both ComTek and the Army turned him down, according to the OSC.

Hanke, a 21-year veteran of both active duty and National Guard service, was given no notice that his job had been in-sourced while he was in Iraq. “I was just floored,” Hanke said in an interview.

Hanke said he and his wife had just purchased a new home when he learned his job was lost and that the family’s credit rating was badly damaged. “We almost lost the home two times,” he said.

The settlement is equivalent to several years of salary, although the exact amount is confidential under the terms of the agreement.

“By no means does it make up for the damage done, emotionally and physically,” said Hanke.

The federal government is the largest employer of citizen-soldiers, and is also the biggest violator of the law. In fiscal 2011, more than 18 percent of the 1,548 complaints of violations of the law involved federal agencies, according to Department of Labor statistics.

The U.S. Army Cadet Command did not immediately respond to a request for comment.

“OSC will continue to press for the employment and reemployment rights of our veterans and National Guard and Reserve members, and for all federal agencies to live up to their obligation to be a model employer under USERRA,” OSC Special Counsel Carolyn Lerner said in a statement.