Owen v. Macy’s, Inc., 2009 WL 1844338 (Cal. Ct. App. 2009)

Lisa Owen worked as a sales associate at Robinsons-May until it was acquired by Macy’s in August 2005. In January 2006, employees at the Arcadia store where Owen worked were informed that the store would close by April. After the store closed on March 18, 2006, Owen received her final pay, which included no pay for unused vacation benefits. The somewhat unconventional Robinsons vacation policy provided that employees would not earn or vest vacation benefits until they had completed six months of continuous employment and, thereafter, employees earned vacation during the “vacation year” that ran from May 1 through April 30 – with 50 percent of the annual benefits accruing and vesting on May 1 and the remaining 50 percent accruing and vesting on August 1. According to a Robinsons executive, this meant that employees’ annual vacation benefits vested before they were actually earned. However, employees like Owen who left the company before May 1 would not receive the first half of their vacation entitlement for the vacation year beginning on May 1. Owen challenged this policy under Labor Code § 227.3 on the ground that new employees were denied vacation benefits for six months and because she was terminated just six weeks before vesting in the 50% of the vacation benefits that she would have earned between May 1, 2006 and April 30, 2007. The Court of Appeal affirmed summary judgment in favor of the employer, finding no violation of the statute.