Court Protects Employees’ Right to Vested Vacation Pay
May 14, 2013 by Adrian Barnes
A recent appellate court decision has resolved an important legal issue regarding the right of California employees to receive pay for their vested vacation time when they leave employment.
When California employees are terminated, retire, or otherwise separate from their employment they are entitled to be paid for all of their unused, “vested vacation time” – unless the union representing those employees has negotiated a collective bargaining agreement that “otherwise provide[s].” Labor Code §§ 227.3, 201. An appellate court has now clarified what “otherwise provides” means and doesn’t mean. The court ruled that an employer cannot simply point to a provision in a union contract that addresses payment for some portion of vested vacation time upon termination and claim that it “otherwise provides,” thus relieving the employer of it obligation to pay employees for all vested, unused vacation time. Rather, a collective bargaining agreement will be found to “otherwise provide” only when it “clearly and unmistakably waives” employees’ rights to receive pay for all vested vacation time.
In Choate v. Celite Corporation (Second Appellate District, Division Six, Ventura), issued on May 2, 2013, the court rejected the employer’s argument that because its union contract provides that employees receive pay for only a portion of vested vacation time upon termination, the union contract “otherwise provides” and implicitly waives employees’ statutory rights under Labor Code section 227.3 to receive pay for all vested vacation time. The court noted that in other contexts a collective bargaining agreement validly waives employees’ rights only if the waiver is clear and unmistakable; the court concluded the same standard should be applied to waivers of employees’ rights under section 227.3. The court held: “a collective bargaining agreement ‘otherwise provide[s]’ and thereby abrogates an employee’s statutory right under section 227.3 to immediate payment for vested vacation time only if the agreement clearly and unmistakably waives that right.” The court went on to find that because the provision in the collective bargaining agreement relied upon by Celite Corporation did not mention section 227.3 or the statutory protection purportedly being waived it was not a “clear and unmistakable” waiver of the statutory right at issue.
The attorneys at Beeson, Tayer and Bodine have extensive knowledge when it comes to Labor Law and Union related cases. If in need of counseling, please contact either our Oakland law firm or Sacramento law firm locations.
The material on this website is provided by Beeson, Tayer & Bodine for informational purposes only and does not constitute legal advice. Readers should consult with their own legal counsel before acting on any of the information presented. Some of the articles are updated periodically, and are marked with the date of the last update. Again, readers should consult with their own legal counsel for the most current information and to obtain professional advice before acting on any of the information presented.
