Johnny PICARD, et al., Plaintiffs/Appellants,
v.
VERMILION PARISH SCHOOL BOARD, Defendant/Appellee.
Court of Appeal of Louisiana, Third Circuit.
*590 James Isaac Funderburk, Abbeville, for Johnny Picard, et al.
Calvin E. Woodruff Jr., Abbeville, for Vermilion Parish School Bd.
BEFORE: SAUNDERS, WOODARD AND DECUIR, Judges.
SAUNDERS, Judge.
Twelve former employees of the Vermilion Parish School Board sued the board for compensation for unused and accrued annual leave. The trial court distinguished between those employees that were involuntarily terminated, granting them relief, and dismissed the claims of the remaining nine former employees who left the school system voluntarily. From this judgment, the nine dismissed claimants appeal.
FACTS
Twelve Plaintiffs were employed by the Vermilion Parish School Board, hereinafter "Defendant," as twelve month employees subject to an annual leave policy, File CGPI, which was adopted on January 9, 1992. From the lower court's judgment dismissing their claims for reimbursement of accrued, unused vacation time, nine employees, Irma Ball, Louis Boudreaux, Thomas Harris, Mildred Haynes, Stanislaus Kasperski, Michelle Labit, Carlene O. LeMaire, Johnny Picard and Velton Vincent, hereinafter "Plaintiffs," bring this appeal. Plaintiffs assert Defendant has improperly deprived them of their vested interests in unused, accrued vacation time under La.R.S. 23:631, et seq.
Defendant's annual leave policy does not address how unused, accrued annual leave (vacation) is handled when an employee is terminated or voluntarily leaves. Nevertheless, Defendant produced evidence in the form of testimony from three of its administrative employees indicating that it was a general practice to encourage employees to use up vacation time before separation or retirement.
LAW AND ANALYSIS
I. Accrued Vacation
La.R.S. 23:631 provides, in pertinent part:
A. (1)(b) Upon the resignation of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular pay day or no later than fifteen days following the date of resignation, whichever occurs first.
. . . .
D. (1) For purposes of this Section, vacation pay will be considered an amount then due only if, in accordance with the stated vacation policy of the person employing such laborer or other employee, both of the following apply:
(a) The laborer or other employee is deemed eligible for and has accrued the right to take vacation time with pay.
(b) The laborer or other employee has not taken or been compensated for the vacation time as of the date of the discharge or resignation.
*591 (2) The provisions of this Subsection shall not be interpreted to allow the forfeiture of any vacation pay actually earned by an employee pursuant to the employer's policy.
Additionally, La.R.S. 23:634 strictly forbids an employer from requiring an employee to, by contract, forfeit wages upon termination, to wit, section (A) provides:
No person, acting either for himself or as agent or otherwise, shall require any of his employees to sign contracts by which the employees shall forfeit their wages if discharged before the contract is completed or if the employees resign their employment before the contract is completed; but in all such cases the employees shall be entitled to the wages actually earned up to the time of their discharge or resignation.
Our focus of review considers when does vacation pay become an "amount due under the terms of employment" or "wages" and when is vacation "actually earned" or vested within the meaning of La.R.S. 23:631 and La.R.S. 23:634. In his Reasons for Ruling, the trial judge cited Beard v. Summit Institute, 97-1784 (La.3/4/98);
We acknowledge that the jurisprudence is replete with the general statement, "[v]acation pay is considered to be wages for purposes of LSA-R.S. 23:631." Draughn v. Mart,
In Huddleston v. Dillard Dept. Stores, Inc.,
In Landry, the court referenced Howser v. Carruth Mortg., to award the claimant reimbursement for unused vacation time where the employer's policy was poorly defined and where the evidence indicated that it was generally accepted that an employee would get ten vacation days per year. In Howser, the reviewing court *592 stated that vacation time is considered wages for the purposes of La.R.S. 23:631 and, discussing the employment contract, noted the "ILOIP merely provides that time off is at the discretion of the originator; no time limits are set." Id.,
In Lee v. Katz and Bestoff, Inc.,
In Morse v. J. Ray McDermott & Co., Inc.,
In Blankenship v. Southern Beverage Co.,
In Berteau v. Wiener Corp.,
A vested right is defined as that case when "the right to enjoyment, present or prospective, has become the property of some particular person or persons as a present interest. The right must be absolute, complete and unconditional, independent of a contingency, and a mere expectancy of future benefit ... does not constitute a vested right." Tennant *593 v. Russell,214 La. 1046 ,39 So.2d 726 (1949).
Id. at 808, 809.
"Once an employee's right to vacation benefits has vested, an employer cannot force forfeiture of this earned right." Barrilleaux v. Franklin Foundation Hosp.,
In Macrellis,
Under the terms of SLIC's manual, annual leave was accumulated on the basis of the years of employment and was earned even during the probationary period. However, it could be used only after the employee had completed probation, attained regular full-time status, and been employed by the agency for one year. Although the right to enjoy the annual leave was prospective, it became the property of the employee as it was earned during the first year of employment. Thus, the earned annual leave was an "amount then due" under La.R.S. 23:631(A).
In Baudoin, an employer, the present Defendant in an earlier suit, changed its policy to require the plaintiff to forfeit vacation time. The court held that an employer could not change a policy so as to deprive an employee of vacation time already earned, reasoning, "[u]nder the provisions of LSA-R.S. 23:631 a resigning or discharged employee is entitled to recover vacation pay accruing prior to his discharge unless the employer's established policy precludes compensation for unused vacation days." (Citation omitted), Id.,
Finally, we consider the learned words of Justice Tate in footnote 10 of Morse v. J. Ray McDermott & Co., Inc.,
The courts of this state have noted that forfeitures of wages are not favored under our law. See Knight v. Oden,282 So.2d 612 (La.App. 1st Cir.1973); United Shoe Stores Co. Inc. v. Dryer,16 La. App. 605 ,135 So. 50 (2nd Cir.1931). We do not believe adoption in 1966 of Act 536 (LSA-R.S. 23:640) expressly including pensions and other fringe benefits payable under collective bargaining agreements was intended to have the effect of excluding other fringe benefits from the definition of "wages." Passage of the act is indicative of the legislature's responsiveness to the concerns of labor interests that fringe benefits might not be considered "wages." If anything, it indicates that the legislature does consider fringe benefits wages within the meaning of La.R.S. 23:634.
(Emphasis Added.)
In the matter under review, Defendant relies on the Supreme Court's recent decision which considered compensation for an employee's unused vacation, Beard,
Both parties propound arguments under Beard. Defendant's argument essentially asserts that an employer owes an employee compensation for unused vacation only if the employer agrees to such. This rationale supplies a presumption in favor of an employer in that, without an agreement otherwise, an employer does not owe an employee anything since an employee has no vested rights in unused vacation time. This rationale might ring true as long as the benefits are not "an amount then due under the terms of employment" or "wages" which La.R.S. 23:631 et seq. protects from forfeiture. However, we can not ignore the overwhelming jurisprudential consensus that unused, annual leave is part of an employee's "wages." More importantly, the Beard decision overturned the Second Circuit's holding that an employer's wage forfeiture policy may be permissible where it penalizes an employee's voluntary act of quitting a job without notice to the employer. See Beard v. Summit Inst. of Pulmonary Med., 29,603 (La.App. 2 Cir. 6/18/97);
Plaintiffs also set forth their argument under Beard,
Defendant asserts that Plaintiffs did not expect to be reimbursed for their unused *595 vacation time until approached by the successful attorney who represented the Baudoin plaintiff. Defendant presented testimony at trial evidencing that while not a written practice, it was an administrative practice to enforce a "use it or lose it" policy. The record indicates that Daniel R. Dartez, Superintendent of the Vermilion Parish School Board, Clifford Alleman, Jr., the Assistant Superintendent in charge of Administration and Personnel, and Theresa Dubois, payroll accountant for Defendant, all testified the administrative policy required an employee s to use annual leave while employed or lose it. Dartez testified that the policy was in place before he became Superintendent and that there was an 1983 policy authorized by the Board that required the forfeiture of any vacation days over thirty. Dartez noted, in 1992, the 1983 policy was written out by the Board and was expanded to be cumulative. Dartez acknowledged that the Board's current policy contains no language requiring the forfeiture of annual leave. Alleman explained that when an employee wants to retire, "we normally extend the retirement the number of days of annual leave days that the person has accumulated on the books, so that, in effect, they will use up all of their retirement leave when they leave the system." Alleman testified that the Board has 1,200 employees in Vermilion Parish and that he has not spoken with most of these people about what happens to unused annual leave upon retirement.
We find, however, even if Plaintiffs had no previous expectation of reimbursement, that alone does not divest Plaintiffs of rights vested by virtue of their completed work time. Defendant's annual leave policy, File CGPI, for "Twelve Month Management Personnel" is as follows:
Annual leave shall be granted to all twelve-month full-time employees. Twelve (12) month employees will accumulate annual leave as follows:
(a) Less than three (3) years of continuous service, at the rate of (1) day per month for a total of twelve (12) days.
(b) Three (3) years but less than ten (10) years of continuous service at a rate of one and one-fourth (1¼) days per month for a total of 15 days.
(c) Ten (10) or more years of continuous service at a rate of one and onehalf (1½) days per month for a total of 18 days.
. . . .
No annual leave may be taken without prior approval by the Superintendent. No employee may take annual leave exceeding 18 consecutive work days. No employee may take annual leave in excess of 40 work days in any school year, provided, however, that any employee who has accumulated more than 100 days of annual leave may take a maximum of 50 working days of annual leave during any school year.
In the event of the development of catastrophic illness an employee may exceed the annual leave limitations provided that the medical condition is supported by appropriate medical documentation and approved by the Superintendent.
While the policy makes no provisions that require the forfeiture of unused annual vacation it does provide that unused leave may be carried over from one year to the next, given the forty day maximum for leave that may be taken in any year. Additionally, leave is based on years of continuous service and determined by a monthly calculation which suggests that leave is earned, therefore vested, at the completion of each month. As such, we find that where an employment policy provides for the accrual of vacation time upon the completion of a specified amount of work, the policies against forfeiture of wages dictate that an employee's rights vest once the condition precedent, the allotment of work, is completed. We now hold that in the absence of a clear, written policy establishing that vacation time *596 granted by an employer to an employee is nothing more than a mere gratuity and not to be considered an amount due or a wage, accrued but unused vacation time is a vested right for which an employee must be compensated upon discharge or resignation.
Rosell v. ESCO,
It is well settled that a court of appeal may not set aside a trial court's or a jury's finding of fact in the absence of "manifest error" or unless it is "clearly wrong," and where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable.
Presently, in light of the long line of jurisprudence deeming vacation time an "amount then due under the terms of employment" or "wages" within the meaning of La.R.S. 23:631 and La.R.S. 23:634 respectively, and with a view for the disfavor surrounding wage forfeiture under our law, we find the lower court manifestly erred when it failed to find Plaintiffs had a vested right in their accrued, unused vacation time, despite their voluntary resignation. We find Plaintiffs' rights in vacation time vested upon completion of each month interval of employment, pursuant to Defendant's annual leave policy, File CGPI.
II. Penalties
La.R.S. 23:632 provides:
Any employer who fails or refuses to comply with the provisions of R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages. Reasonable attorney fees shall be allowed the laborer. Any employer who fails or refuses to comply with the provisions of R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages. Reasonable attorney fees shall be allowed the laborer or employee by the court which shall be taxed as costs to be paid by the employer, in the event a well-founded suit for any unpaid wages whatsoever be filed by the laborer or employee after three days shall have elapsed from time of making the first demand following discharge or resignation.
La.R.S. 23:632 is a penal statute which much be strictly construed. Brown v. Navarre Chevrolet, Inc.,
III. Defendant's Answer
In its answer to Plaintiffs' appeal, Defendant seeks to appeal the judgment of the trial court, arising out of the same matter as the present appeal, which ruled in favor of Clarence Suire, Paul C. Boudreaux and Marcedell Joiner. La.Code Civ.P. art. 2133 allows an appellee to seeks modification, revision or reversal of a judgment *597 rendered in favor of the appellant in the answer. La.Code Civ.P. art 2133(A) provides, in pertinent part: "The answer filed by the appellee shall be equivalent to an appeal on his part from any portion of the judgment rendered against him in favor of the appellant and of which he complains in his answer." (Emphasis added.) Suire, Boudreaux and Joiner, however, are not parties to the appeal brought by Plaintiff; Defendant cannot circumvent the statutory delays within which an appeal may be brought on behalf of Suire, Boudreaux and Joiner by simply inserting these parties via an answer. Shelton v. Aetna Cas. & Sur. Co.,
DECREE
As an initial matter, where earlier the trial court found the exception moot and declined to consider it, upon remand we order the lower court to rule on Defendant's exception of prescription as to the claims of Stan Kasperski and Velton Vincent. We award to Plaintiffs $5,000.00 in attorney's fees, reimbursement of each Plaintiff's determined unused, accrued vacation time and penalty wages in accordance with La.R.S. 23:632, together with legal interest thereon; accordingly, we remand this matter for determination and calculation of vacation time and penalty wages owed to Irma Ball, Louis Boudreaux, Thomas Harris, Mildred Haynes, Michelle Labit, Carlene O. LeMaire, Johnny Picard, and also to Stan Kasperski and Velton Vincent if their claims are found timely. Costs to be paid by Defendant.
REVERSED AND REMANDED.
NOTES
Notes
[1] In Knecht, the defendants tried to abolish a contractual policy which retroactively divested its employees of remuneration for overtime worked. The Knecht court held that the employees had a vested property right interest in the accrued compensatory time.
[2] Boudreaux v. Hamilton Medical Group, Inc., 94-0879 (La.10/17/94);