ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE:
GREGORY W. MOORE MICHAEL J. CORK
JOHN P. RYAN Burton & Cork
Hall, Render, Killian, Indianapolis, Indiana
Heath & Lyman, P.S.C.
INDIANA HEART ASSOCIATES, P.C., ) ) Appellant-Defendant, ) ) vs. ) No. 49A02-9810-CV-831 ) KATHLEEN G. BAHAMONDE, ) ) Appellee-Plaintiff. )
requested, employers must pay employees semi-monthly or bi-weekly; and (3) employees,
upon separation from employment, must be paid the amount due them at their next and usual
payday (unless their whereabouts are unknown)." Huff v. Biomet, Inc., 654 N.E.2d 830, 835
(Ind. Ct. App. 1995) (footnote omitted, emphasis added). Although the Wage Payment
Statute does not define "wages," we have held that vacation pay constitutes deferred
compensation in lieu of wages and is thus subject to the provisions of the statute. Jeurissen
v. Amisub, Inc., 554 N.E.2d 12, 13 (Ind. Ct. App. 1990). Nonetheless, an employee's right
to vacation pay under the statute is not absolute. Rather, an employee is entitled to her
accrued vacation pay to the time of termination "provided no agreement or published policy
exist[s] to the contrary . . . ." Die & Mold, Inc. v. Western, 448 N.E.2d 44, 48 (Ind. Ct. App.
1983). Citing Die & Mold, Inc., this court recently held:
Vacation pay is additional wages, earned weekly, where only the time of payment is deferred. It necessarily follows that, absent an agreement to the contrary, the employee would be entitled to the accrued vacation pay at the time of termination.
Haxton v. McClure Oil Corp., 697 N.E.2d 1277, 1281 (Ind. Ct. App. 1998) (citations omitted).
The undisputed evidence in this case shows that Heart Associates had in place a published policy declaring that an employee would not be entitled to her accrued vacation if she were terminated for, among other things, "gross misconduct." It was for "gross misconduct" and "inappropriate behavior" that Bahamonde was terminated. The record shows that Bahamonde received a copy of the employee handbook in which the policy was contained. And she acknowledged that it was her responsibility to know and understand the
contents of the handbook. Because of Heart Associates' published policy, Bahamonde did
not have an automatic statutory right to her accrued but unpaid vacation pay. The trial court
thus erred in granting summary judgment in Bahamonde's favor. However, contrary to the
argument Heart Associates makes in this appeal, summary judgment should not be entered
in its favor.
First, nothing in the portion of the handbook presented in support of Heart Associates' motion for summary judgment defines the term "gross misconduct." Second, even assuming for the sake of argument the term encompasses yelling at a supervisor in an intimidating fashion, there is a dispute as to whether Bahamonde engaged in such conduct.See footnote 3 The record shows that in opposition to Heart Associates' motion for summary judgment, Bahamonde presented her own affidavit and the affidavits of two co-workers. According to Bahamonde's affidavit, she did not "yell at [her supervisor] in an intimidating fashion" or do anything to "threaten [her supervisor] either verbally or by physical action." R. at 174. The affidavits of the co-workers stated that they were in a position to observe and to overhear the conversation between Bahamonde and her supervisor. In relevant part, the affidavit of one of the co-workers asserted: "Nothing during the conversation between [the supervisor] and Kathy Bahamonde indicated that Kathy Bahamonde was threatening [the supervisor]." R. at 168. The affidavit of the second co-worker reiterated this statement and further stated, "I
did not hear Kathy Bahamonde say anything threatening to [her supervisor], nor did I see
Kathy Bahamonde make any threatening gestures to [her supervisor]." R. at 171. In this
appeal, Heart Associates contends that the affidavits are not relevant: "the reasoning for
termination does not bear in any manner upon the legal issue of whether an employer has an
obligation to pay accrued vacation pay at the time of termination if the employer establishes
a policy which conditions payment and the employee fails to fulfill the condition." Reply
Brief of Appellant at 8. Heart Associates seems to imply that the existence of a written
policy, standing alone, is sufficient to deny Bahamonde her accrued vacation pay. It is not.
If this were so, then an employer could always avoid paying its involuntarily terminated
employees their accrued vacation by simply asserting a violation of company policy whether
or not the assertion was ever demonstrated to be true. We hold therefore, that in denying an
employee accrued vacation pay to which the employee would otherwise be entitled on
grounds that a written policy so provides, the employer has the burden of showing a violation
of the policy. As applied to the facts in this case, only if Bahamonde violated Heart
Associates' written policy could Heart Associates deny her accrued vacation pay upon
termination. Whether Bahamonde yelled at her supervisor in an intimidating fashion and
whether such behavior amounts to gross misconduct are disputed issues of material fact that
cannot be resolved by summary disposition.
Judgment reversed and cause remanded.
BAKER, J., and BROOK, J., concur.
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