[Texas] Company changes Vacation Policy to set up a systematic mass layoff

[45Throw23away]

Let's call the company I worked for "Company A" . Company A is a private construction company that has multiple locations across the country with its headquarters located in Texas. This company is large and receives billions of dollars in revenue every year. This pandemic has delayed future projects for them and has severely damaged revenue coming in. It was to be expected that they would have mass layoffs even though they have stated at monthly service awards that there is plenty of work coming in and there was no need to worry. They ultimately had a mass layoff across the country this month but the way they did it seems very shady and unprofessionally. I am unsure whether the actions they have taken are legal or not.

This company is known for treating employees very well. They promote employees who have been working their for 25 + years. People who have had that much experience are looked upon as royalty. They have had layoffs before but people have received generous severance packages or they were offered different positions at the office or at another location. I personally enjoyed working there and was treated great. The company had a great culture and great people.

The original vacation policy stated that you can stack vacation that you accrued and if you were laid off you were paid out for your vacation. The policy remained unchanged since 2013. About 3 weeks ago they changed the vacation policy out of nowhere employees were not notified. They did put the policy change on the employee website but you had to go out of your way to find it. The majority of people were busy working on projects and most people missed the policy.

The new policy states under the section Unused Vacation Time: "earned vacation time should be taken within one (1) year and should not normally be carried over into subsequent years" .

The new policy states under the section Employee Separations: "Employees who are discharged, laid off due to a reduction of force or who quit are not eligible to receive earned vacation pay upon termination (unless required by law). Company A will follow the applicable state laws with regard to payment of vacation upon separation. Company A will not delay the employee separation process in order to pay out vacation hours."

On the same day as the policy change went into action they immediately started laying people off. Then started to lay people off in waves each week. Most people were working from home and were unaware of people getting laid off. They did not tell anyone that their fellow employees were getting laid off. People only knew via word of mouth.

People from different ranges of experience were getting laid off from first year employees to people who have worked 25 plus years. No one has gotten separation packages and received no vacation buyouts. People have worked there a long time and some had months of vacation saved and all of it went away. They were completely cut off and will only receive their last pay check. I work at the headquarters in Texas and I only know for sure that has happened at the home office but I am sure similar other locations have dealt with the same thing.

I was made aware of this a week or so in advance. I had 3 days of vacation planned at the end of the month in April back in February before all this started happening. I was looking forward to it even though I was going to stay home during the pandemic because I would not receive any of that vacation money if I were to get laid off. I am a relatively new employee to the company and I assumed I did not get laid off in the first couple waves because I was working on a major project for them. After that project was over, it was expecting that I would get laid off.

The first day of my vacation was planned on a Friday. The day before my vacation I got a call from the head of my department and said that he noticed that I was about to head on my vacation and wanted to let me know that they planned to lay me off on that day. Instead they laid me off on that Thursday to prevent me from going on that vacation. I also received no severance package or vacation buyouts.

I understand that Texas is a "right to work" state but is any of this legal? Do I have the right to receive the vacation I earned? Does this have a potential to be a class action lawsuit?

 

[Taxing Matters]

The phrase "right to work" in employment law simply means that you cannot be required to join a union in order to get a job. That does not apply to your question, obviously. Most employment in the U.S. is "at will". Under at will employment both the employer (with some exceptions) and the employee are free to terminate the employment relationship at any time for any reason. There are a few reasons that the law prohibits as a basis for firing an employee. The prohibited reasons include firing you because:

• of your race, color, religion, sex, national origin, citizenship, age, disability, or genetic test information under federal law (some states/localities add a few more categories like sexual orientation);
• you make certain kinds of reports about the employer to the government or in limited circumstances to specified persons in the employing company itself (known as whistle-blower protection laws);
• you participate in union organizing activities;
• you use a right or benefit the law guarantees you (e.g. using leave under FMLA);
• you filed a bankruptcy petition;
• your pay was garnished by a single creditor; and
• you took time off work to attend jury duty (in most states).

The exact list of prohibited reasons will vary by state. You worked for a private contracting firm in Texas and thus under the at will doctrine the employer is free to terminate you at any time for most any reason, except for the sorts of things I listed above. Unless Texas has enacted a rule that prevents lay offs during the covid-19 pandemic it would be legal for the employer to fire you because its business has dropped off significantly due to the stay at home orders and other restrictions on the public.

The real issue you see to raise is whether the company could change its policy on use of accrued vacation time and thus deprive you of the vacation pay that you thought you'd earned. There are a few states, like CA, that treat accrued vacation pay as wages and once earned the employer will have to pay sooner or later. Other states do not give employees a right to accrued but unearned vacation pay. And there are various positions in between where accrued vacation pay may be guaranteed in some instances and not in others. So the particular state law matters. As to Texas law, I'll refer you to the Texas Workforce Commission discussion of vacation and sick pay as it appears to provide a pretty clear explanation of how it works.