2019 COA 98
Colo. Ct. App.2019Background
- Carmen Nieto worked for Clark’s Market and accrued vacation under the employer’s handbook policy.
- The handbook provided that employees receive payment for accrued unused vacation only if they voluntarily resign with at least two weeks’ notice; employees discharged or who quit without two weeks’ notice forfeited vacation pay.
- When the Market discharged Nieto, it refused to pay her accrued unused vacation; Nieto sued under the Colorado Wage Claim Act (CWCA).
- Nieto alleged the forfeiture policy violated § 8-4-101(14)(a)(III) (vacation as wages) and § 8-4-121 (anti-waiver) of the CWCA.
- The district court granted the Market’s motion to dismiss for failure to state a claim; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the employer's forfeiture policy violates the CWCA by denying payment for accrued unused vacation | Nieto: CWCA creates a right to payment for accrued vacation on termination, so the forfeiture is an unlawful waiver under § 8-4-121 | Market: CWCA does not create a substantive right to vacation pay; entitlement depends on the parties' agreement, so the forfeiture condition is enforceable | The court held the CWCA does not create a substantive right to vacation pay; payment depends on the employment agreement, so the forfeiture policy did not violate the CWCA |
Key Cases Cited
- Barnes v. Van Schaack Mortgs., 787 P.2d 207 (Colo. App. 1990) (CWCA looks to parties’ agreement to determine whether compensation is earned and payable)
- Cheyenne Mountain Sch. Dist. No. 12 v. Thompson, 861 P.2d 711 (Colo. 1993) (treats contractual denial of unused vacation pay upon termination as enforceable)
- Hartman v. Freeman, 591 P.2d 1318 (Colo. 1979) (discusses vesting/determinability of vacation pay as of termination)
- Lee v. Fresenius Med. Care, Inc., 741 N.W.2d 117 (Minn. 2007) (vacation pay is contractual; statutes govern timing, not creation, of entitlement)
- Indiana Heart Assocs., P.C. v. Bahamonde, 714 N.E.2d 309 (Ind. Ct. App. 1999) (upholds conditional forfeiture of paid time off under state wage statute)