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Wrongful Termination and refusal to pay verbal

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mjac

Junior Member
What is the name of your state? NEW YORK STATE

During my employment with company "XXX" I was approached by a new start up company "YYY", in the same skilled trades area that was formed by former employees of "XXX"., therefore making the two companies competitors in this field. I was becoming dissatisfied in my own mind with "XXX" because of the amount of travel, stress, etc. that came with the position. Therefore, I entertained the new proposal from the new company "YYY". We had a small meeting between myself, another person who was going to join on, with the same circumstances as myself, (however he had his own business,again in the same field of trade). and the 2 officers of the company. During the meeting it was discussed how we were going to go about doing business, keeping the stress levels down, pursuing more local work ,thus reducing travel, along with certain benefits that would be provided. The benefits discussed were, family health insurance coverage,401k plan,and vacation time of 3 weeks to start, and our weekly salary compensation. I deceided as did the other person to join on with new company "YYY" and left my other job, and the other person put his business on hold to join on. As the months progressed and we brought new customers on and started growing the business, mostly due to mine and the other employee reputation. One morning we were called into a McDonalds rest. and terminated by our new employer "YYY" on the fact of suspicions that we were doing business for the other employees company onhold while on "yyy' company time. This was totally false and there is no proof found on that statement, in fact it was just the opposite as we promoted the new YYY company. However the termination took place. During the time employed with new company"YYY" the benefits that were initially discussed at the offer meeting withstood and I had family health coverage and a 401k plan in place. However when it xcame to the unused vacation pay they refused to pay this amount we agreed on as 3 weeks to start. This as well as any of the above was never written or signed by anyone and no company policy was in place. The employers reasoning for not paying the full unused vacation was that he stated it was 3 weeks per year vacation. I was allowed to take 1 week of this said vacation after the very first week of my new employment and was paid for it. Now as i requested my 2 weeks unused vac, pay they said they prorated it with some formula allowing me only 1 day ? Can you help me out here when all this verbal promise has been made and the vacation portion is now being made up as they go along, has their actions supported a 3 week to start vacation if i was allowed to take that vacation immediately ? Also the other employee was treated in the same fashion, is there anything about compensation for his company on hold to join this company and his lost business ? Also it was asked of me to see my previous customer list from "xxx" company and it was never returned to me, they are standing by their referance to employment "at will" Thank You
 


cbg

I'm a Northern Girl
First of all, this is not a wrongful termination. Too many people have the idea that "if my company fires me because they believe I did X and I didn't, then it's a wrongful termination". Not true. A wrongful termination means that it was ILLEGAL for them to fire you for the reason they did. It is not illegal for a company to fire someone because they believe they have done something, even if the company is mistaken. Unfair possibly, but not illegal.

As for vacation, many, many companies, whether is is wise for them to do so or not, allow an employee to "borrow" vacation time they have not actually earned. Your description of what happens does NOT support your contention of a "verbal promise" of all three weeks vacation being immediately yours to do with as you please, but supports a policy on the part of your employer that they will allow you to borrow vacation you have not earned. In that case, your employer has every right to withhold payment of unearned vacation. The state of NY does not require the payout of even earned but unused vacation; NO state requires the payout of unearned vacation.
 

pattytx

Senior Member
And to clarify cbg's response regarding vacation, the Federal Wage and Hour Division has issued a decision (actually a Private Letter Ruling, but it defines their stance about this issue) regarding "borrowed" vacation (taken but not yet earned) where they state that such "negative" vacation may not be deducted from the final pay of an exempt employee. Nonexempt employees are not addressed in the PLR, as the requesting company did not ask about them.

For example, let's say you earn 12 vacation days per year. You start employment January 1. In February, you are allowed to take 5 days vacation. At that point you have only earned (at the maximum 2 days-one day per month). You are "in the hole" for 3 days. You don't take any more vacation and terminate at the end of May. The employer is not required to pay out the remaining 7 days because they are not yet earned. However, if you quit when you return from you February vacation, they cannot reduce your final wages by the 3 days you had taken, but not yet earned, if you are an exempt employee
 

cbg

I'm a Northern Girl
Interesting, Patty. About three years ago I had an exempt employee who had overtaken her vacation time by one day when she resigned. I called the MA state DOL, which told me that because MA considers vacation time wages, they considered that she had been overpaid and that I COULD deduct it from her final check. With that "permission" it didn't occur to me to check with the Feds also. Guess I should have, even though the employee told me outright that she did not think we were being unreasonable and she was perfectly willing for me to make the deduction.

We keep learning...
 

pattytx

Senior Member
Which is why I hate policies that allow "negative" vacation or loading balances up front. :(

Most T&A and payroll systems can be configured to prohibit vacation time from being entered in excess of the current balance. So if you accrue as you go along and don't front load the full entitlement at the beginning of the year, you never have to address the overtaken vacation issue.
 

cbg

I'm a Northern Girl
I don't particularly like the practice either but this was one battle I lost. So a wrote a policy that specified the terms and condition under which vacation time could be "borrowed" in advance and specified that under NO circumstances could more than 5 days be borrowed. That passed muster with the powers that be.

I couldn't stop the practice but at least I was able to limit it. I was with the company 2 years and that was the only time we had anyone who had overtaken when they left the company, so I guess it helped.
 

mjac

Junior Member
reply

I realise that of the "borrowed vacation time" but I was told that I had 3 weeks vacation "to start from day one" I did not borrow time., I had it coming to me and I took the 1 week . Therefore my vacation time remaining would be 2 weeks. That is what they did not pay me for, there was no company policy in place at all, everything was verbal being a 3 month old start up company. There probably isnt any recourse action I can take after reading this. I was just checking to see if I can get anything in the way they made false verbal promises to start and then let me go. It seems as thought they set me up to begin with by having my resume and my experiance to gain customers and my customer list, then when things started rolling for them they fire me, and my co-worker who brought in even more experiance and a compnay he put on hold . I know this is unfair but anything else I can try to use as a case ? This anger is going right through me. Thanks again
 

soxfan1011

Junior Member
pattytx said:
And to clarify cbg's response regarding vacation, the Federal Wage and Hour Division has issued a decision (actually a Private Letter Ruling, but it defines their stance about this issue) regarding "borrowed" vacation (taken but not yet earned) where they state that such "negative" vacation may not be deducted from the final pay of an exempt employee. Nonexempt employees are not addressed in the PLR, as the requesting company did not ask about them.

For example, let's say you earn 12 vacation days per year. You start employment January 1. In February, you are allowed to take 5 days vacation. At that point you have only earned (at the maximum 2 days-one day per month). You are "in the hole" for 3 days. You don't take any more vacation and terminate at the end of May. The employer is not required to pay out the remaining 7 days because they are not yet earned. However, if you quit when you return from you February vacation, they cannot reduce your final wages by the 3 days you had taken, but not yet earned, if you are an exempt employee
Do you have a link to where I can see details on this PLR? It would be very helpful for an issue we are dealing with. Thank you very much.
 

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