Procedural Posture

Appellant employer challenged a judgment of the trial court (California), which granted respondent employee’s motion for summary judgment. The trial court found that respondent was entitled to vacation pay due him on the basis of time served following his termination from employment pursuant to Cal. Lab. Code § 227.3 and costs.

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Overview

Appellant employer terminated respondent employee after almost six years of employment. The trial court granted respondent’s motion for summary judgment and held that Cal. Lab. Code § 227.3 required appellant to pay respondent vacation pay due him on the basis of time served. Appellant argued that under its vacation policy, respondent was not eligible for any vacation pay unless he was still employed on the anniversary of the day he began work, which was a condition precedent to the “vesting” of vacation rights. The court affirmed and found that respondent’s right to a paid vacation, when offered in appellant’s policy or contract of employment, constituted deferred wages for services rendered. Furthermore, the court concluded that respondent’s proportionate right to a paid vacation vested as the labor was rendered and was protected from forfeiture by § 227.3. On termination of employment, therefore, the statute required that respondent be paid in wages for a pro rata share of his vacation pay.

Outcome

The court affirmed the judgment of the trial court. The court found that respondent employee was entitled to a pro rata share of his vacation pay after appellant employer terminated his employment.