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Supreme Court of California
July 1, 1982
L.A. No. 31522
[*776] [**123] [***847] Under an employment policy providing for annual paid vacations, when does the right to a vacation "vest?"
The following facts are not in dispute. Francisco Suastez, respondent, was employed by the appellant, Plastic Dress-Up Co. (Plastic Dress-Up), from October 16, 1972, until July 20, 1978. Throughout [****2] this time, and in accordance with its regular policy, the company paid Suastez weekly wages based on his hourly wage. Additionally, it provided certain fringe benefits, including holiday and vacation pay.
The company's vacation policy provided that each employee was entitled to between one and four weeks of paid vacation annually, depending on the length of his or her employment. 1 [****3] According to testimony in the trial court, an employee did not become eligible for a paid vacation under the company's policy until the anniversary of his or her employment. Thus, Plastic Dress-Up customarily refused to pay vacation benefits to anyone whose employment was terminated before that anniversary date. 2
[*777] Suastez received vacation pay in 1974, 1975 and 1976, but took no time off. In October of 1977, immediately after his anniversary date, Suastez took a three-week paid vacation.
Midweek in July of 1978, Suastez's employment [****4] was terminated. The company paid him $ 68.79 as net wages for the part of the week that he had worked. 3 At that time, Suastez requested a pro rata share of his vacation pay for the period from his anniversary date (Oct. 16, 1977) until his last day of work (July 20, 1978). Plastic Dress-Up refused to pay any pro rata vacation [**124] [***848] benefits. 4 Suastez then filed suit in the Los Angeles County Superior Court seeking damages, costs and a declaration that the company's refusal to pay him a pro rata share of his vacation pay violated California Labor Code section 227.3. 5
[****5] After a hearing, the court dismissed the complaint for lack of subject matter jurisdiction, finding that Suastez had failed to exhaust his administrative [*778] remedies. Suastez then filed a claim for pro rata vacation benefits with the Labor Commissioner. The commissioner denied the claim. 6
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31 Cal. 3d 774 *; 647 P.2d 122 **; 183 Cal. Rptr. 846 ***; 1982 Cal. LEXIS 196 ****; 33 A.L.R.4th 254; 25 Wage & Hour Cas. (BNA) 1040; 3 Employee Benefits Cas. (BNA) 2429; 94 Lab. Cas. (CCH) P55,356
FRANCISCO SUASTEZ, Plaintiff and Respondent, v. PLASTIC DRESS-UP CO., Defendant and Appellant
Subsequent History: [****1] Appellant's petition for a rehearing was denied September 22, 1982. Richardson, J., was of the opinion that the petition should be granted.
Prior History: Superior Court of Los Angeles County, No. EA C 32945, Alfonso M. Bazan, Judge.
Disposition: The judgment is affirmed.
vacation pay, vested, vacation, wages, employees, benefits, eligibility, forfeiture, terminated, rata, vested vacation time, paid vacation, pension rights, rights, condition precedent, anniversary date, annual, courts
Business & Corporate Compliance, Wage & Hour Laws, Scope & Definitions, Holiday, Sick & Vacation Pay, Labor & Employment Law, Wrongful Termination, Breach of Contract, Employer Handbooks, Labor & Employment Law, Wage Payments, Contracts Law, Contract Conditions & Provisions, Conditions Subsequent, Employment Contracts, Conditions & Terms, General Overview