Payment of Wages and Earned Vacation Not Due Until Actual Date of Discharge, Even If Employee Stopped Working Earlier

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In Knous v. Broadridge Financial Solutions, Inc., the United States District Court for the District Court of Massachusetts awarded summary judgment to an employer on the employee’s claims of unpaid wages and earned vacation at the time of discharge.

As a result of restructuring, the employer decided to terminate the employee. The employer informed the employee of his termination in a meeting on May 17, 2019, during which the employer “instructed” the employee to return company property, stop working, and vacate the site. The employer also specifically informed the employee that he would still receive wages and benefits as of May 24, 2019, and also presented the employee with a severance agreement that defined his date of termination as May 24, 2019.

On May 22, 2019, the employee brought a lawsuit alleging that the employer failed to pay his wages and earned vacation on May 17, 2019. Rather, the employee received wages and earned vacation as of and on May 24, 2019, which the employer argued was the employee’s actual discharge date. The employer and employee both filed motions for summary judgment.

As the case notes, pursuant to M.G.L. c. 149, § 148, “any employee discharged from … employment shall be paid in full on the day of his discharge …. The word ‘wages’ shall include any holiday or vacation payments due an employee under an oral or written agreement.”

The Court explained that, while not defined by statute, “discharge” is “in the employment context … generally understood to mean ‘to remove or release (a person) from office or employment; to dismiss from a post, service, etc.,'” citing the Oxford English Dictionary. Further, the Court noted that “the [employer’s] obligation to pay arises not when the employer makes the decision to discharge an employee … nor when the employer tells the employee of the decision to discharge … but on ‘the day’ of the discharge,” referencing and citing the Massachusetts Supreme Judicial Court decision Dixon v. City of Malden.

The Court denied summary judgment to the employee and awarded it to the employer, determining that the employee had been discharged as of May 24, 2019. The employee argued that “discharge from employment” is “when the employee no longer performs work for the employer.” Interestingly, the Court specifically rejected this interpretation, explaining that, among other things, it would extend the employer’s responsibilities to situations where employees “are kept on the payroll but are told not to work for an indefinite period of time due to general lockdown or a lack of business arising from coronavirus.”

An appeal has been filed.


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