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Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDLLR vs. Food Services, Inc.

AGENCY:
South Carolina Department of Labor, Licensing and Regulation

PARTIES:
Petitioners:
South Carolina Department of Labor, Licensing and Regulation, Division of Labor

Respondents:
Food Services, Inc.
 
DOCKET NUMBER:
95-ALJ-11-0724-CC

APPEARANCES:
Sharon A. Dantzler, Esq., for Petitioner

Julian H. Gignilliat, Esq., for Respondent
 

ORDERS:

ORDER

I. Statement of the Case

This matter is a protest by Food Services, Inc. (Food Services), the Respondent, to a penalty citation issued by the South Carolina Department of Labor, Licensing and Regulation, Division of Labor, (Division) pursuant to S.C. Code Ann. § 41-10-40 (Supp. 1995). Food Services denies any penalties are due. The parties agreed to submit the case on briefs and to base the evidence upon documents supplied to the court in each party's Exchange of Evidence. Jurisdiction vests in the Administrative Law Judge Division under S.C. Code Ann. § 41-10-80(D) (Supp. 1995), 26 S.C. Code Regs. 71-6000 (to the extent a contested case hearing is granted), and the contested case provisions of S.C. Code Ann. § 1-23-600(B) (Supp. 1995).

I conclude no penalty is due. Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. ALJD Rule 29(B). Further, the filing of a motion for reconsideration is not a prerequisite to any party filing a notice of appeal of this Order. ALJD Rule 29(C).



II. Issues

Is Food Services liable for civil penalties under S.C. Code Ann. § 41-10-80(B) (Supp. 1995) for violations of S.C. Code Ann. § 41-10-40(D) (Supp. 1995) by failing to pay wages due at the time and place required by S.C. Code Ann. § 41-10-30(A) (Supp. 1995)?



III. Analysis

1. Positions of Parties:

While Food Services agrees it did not pay Sheryl Trapp (Trapp) for "personal leave days," it asserts such failure is not a violation of S.C. Code Ann. § 41-10-40(D). Food Services asserts that no wages were due for the personal leave days since Trapp failed to provide two weeks notice of her resignation as required by the company handbook. Division agrees the company handbook allows for the non-payment of personal leave days if the employee fails to provide a two week notice. The Division, however, asserts the handbook's non-payment provision is limited to accumulated and unused personal leave. The Division argues that at the time of Trapp's resignation, she had used five days of her personal leave. Such days were not "accumulated," and therefore, wages were owed for the five days.

2. Findings of Fact:

I find, by a preponderance of the evidence, the following facts:

1. Trapp began employment with Food Service, Inc. on August 23, 1990, at $4.25 per hour and remained an employee until June 12, 1995, at which point she was earning $5.70 per hour.

2. On August 23, 1990, as a new employee, Trapp was informed that she would be paid on Fridays on a biweekly basis.

3. On August 23, 1990, Trapp was also informed that she would be paid for personal leave days in accordance with the company handbook.

4. Trapp is covered by the employee handbook policies governing personal leave days.

5. After a three month probation, Trapp earned personal leave days at the rate of one and one half days per month for her first four years of employment, and at the rate of one and three fourths days per month for the remainder of her employment.

6. As of June 5, 1995, Trapp had accumulated in excess of five days of personal leave.

7. Prior to June 5, 1995, Trapp requested and received permission from her supervisor to utilize five of her accumulated personal leave days.

8. Trapp utilized five of her leave days by being away from work for the period from June 5, 1995 to June 9, 1995.

9. Trapp did not return to work on June 12, 1995, but rather notified her employer via telephone of her resignation, which was effective immediately.

10. Trapp was due to be paid her wages on June 23, 1995.

11. On June 23, 1995, Trapp was not paid for the five days of personal leave taken for the period of June 5 through June 9, nor was Trapp paid for any remaining unused personal leave.

12. Under the handbook, Trapp was entitled to payment for accumulated personal leave days if her departure was in accordance with company policy.

13. The handbook policy governing departure through resignations requires at least two weeks notice to the employer before an employee is "eligible for payment of accumulated personal leave."

14. Trapp did not provide to her employer a two week notice of her resignation.

15. Trapp's departure was not in accordance with company policy.

16. Trapp is not entitled to payment for accumulated personal leave.

17. Accumulated leave for which Trapp is not entitled to payment includes the five days of personal leave taken during the period of June 5 through June 9, 1995.

3. Discussion

The term "wages" includes vacation payments due to an employee under any employer policy. S.C. Code Ann. § 41-10-10(2). Thus, in order for the personal leave days to constitute wages due, the payments must be due under the employer policy, and accordingly, a review of the policy is required. In examining the policy, I am mindful that the rules of construction for interpreting the terms of an agreement hold that an ambiguity will be construed against the party who prepared the terms. Murray v. Texas Co., 172 S.C. 399, 174 S.E. 231 (1934). The overriding concern of the court, however, must always be to give effect to the intentions of the parties. Williams v. Teran, Inc., 266 S.C. 55, 221 S.E.2d 526 (1976). Where the intention can be found by examining the policy as a whole, such intention must be followed. Martin v. Carolina Water Service, Inc., 280 S.C. 235, 312 S.E.2d 556 (Ct. App. 1984).

The company handbook holds that an employee who leaves employment after accumulating personal leave days will be paid for those days if the departure is "according to company policy." Company policy as established by the handbook requires at least two weeks notice before an employee is eligible for payment of accumulated personal leave. Here, it is undisputed Trapp did not provide the required two week notice. Thus, having failed to depart in accordance with company policy, she is not entitled to payment for "accumulated personal leave." The issue, however, becomes one of determining the amount of the accumulated personal leave for which Trapp is not entitled to payment.

When read as a whole, the policy reflects the intention of the parties to create an incentive for the employee to provide at least two weeks notice before the employee ceases performing his work duties. If the employee provides the two week notice and works that period, the employer agrees to pay the resigning employee for any accumulated personal leave. The intention that the employee remain on the job for the last two weeks of an employee's tenure is most plainly expressed in the requirement that personal leave days are not eligible for use in satisfying the notice requirement. In other words, the employer encourages the employee to stay for at least an additional two weeks to allow the employer to accomplish such objectives as hiring a replacement or training other existing employees so as not to diminish the production of the company. If the employee wishes to leave without a two week notice, the employee is free to do so with the only consequence being the employee is not paid for any accumulated personal leave.

The Division interprets the handbook's non-payment language as being limited to unused personal leave. I am unable to agree since the Division's interpretation of the phrase "accumulated personal leave" defeats the plain meaning of the policy by creating a disincentive to the two week notice rule. For example, consider two identical hypothetical employees. Employee one has five days of personal leave and works the week of June 5 through June 9 and resigns on June 12 without giving a two week notice. No one would dispute this employee is entitled to no payment for his five days of accumulated leave since he failed to give two weeks notice. Employee two also has five days of personal leave, but rather than work the week of June 5 through June 9, the employee takes his five days of personal leave. Employee two also resigns on June 12. Under the Division's view, employee one is not paid due to lack of proper notice while employee two, who also did not give proper notice, is paid. Under such a policy, an employee would have no monetary incentive to remain on the job an extra two weeks, but rather would be encouraged to take all available personal leave and then resign without notice.

Under the facts here, Trapp utilized five of her personal leave days for the period of June 5, 1995 through June 9, 1995, a Monday through a Friday. On Monday, June 12, 1995, Trapp did not return to work but rather telephoned Food Services and resigned. Since it is undisputed that Trapp did not give the required two weeks notice under the employer policy, Trapp is not entitled to payment for "accumulated personal leave." In order to carry out the intention of the parties, I find the amount of the accumulated leave for which Trapp is not entitled to payment includes the five days of personal leave taken during the period of June 5 through June 9, 1995.

4. Conclusions of Law

Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:

1. For employers covered by S.C. Code Ann. § 41-10-30 (Supp. 1995), the employer must notify the employee in writing at the time of hiring of the normal hours, the wages agreed upon, and the place of payment. S.C. Code Ann. § 41-10-30(A) (Supp. 1995).

2. The term "wages" includes vacation payments due to an employee under any employer policy. S.C. Code Ann. § 41-10-10(2) (Supp. 1995).

3. Employers covered by S.C. Code Ann. § 41-10-30 (Supp. 1995) are directed to pay all wages due at the time and place designated "as required by subsection (A) of S.C. Code Ann. § 41-10-30 (Supp. 1995)." S.C. Code Ann. § 41-10-40(D) (Supp. 1995).

4. A penalty of up to one hundred dollars may be imposed upon covered employers who violate the provisions of S.C. Code Ann. § 41-10-40(Supp. 1995). S.C. Code Ann. § 41-10-80(B) (Supp. 1995).

5. While the rules of construction for interpreting the terms of an agreement hold that an ambiguity will be construed against the party who prepared the terms, the overriding concern of the court, however, must always be to give effect to the intentions of the parties. Murray v. Texas Co., 172 S.C. 399, 174 S.E. 231 (1934); Williams v. Teran, Inc., 266 S.C. 55, 221 S.E.2d 526 (1976).

6. Where the intention can be found by examining the policy as a whole, such intention must be followed. Martin v. Carolina Water Service, Inc., 280 S.C. 235, 312 S.E.2d 556 (Ct. App. 1984).

7. The intention of the parties is to create an incentive for the employee to provide at least two weeks notice before the employee ceases performing his work duties with such incentive being the employer's agreement to pay the resigning employee for any accumulated personal leave if the employee provides the two week notice and works that period.

8. An interpretation of the personal leave policy which limits the non-payment language to unused personal leave defeats the plain meaning of the policy and instead creates a disincentive to the two week notice rule.

9. No penalty is due by Food Services for violating S.C. Code Ann. § 41-10-40(D) (Supp. 1995) since Food Services did not fail to pay all wages due at the time and place designated by S.C. Code Ann. § 41-10-30(A) (Supp. 1995).

IV. ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, the following ORDER is issued:

The Division is ordered to withdraw any penalties assessed against Food Services under S.C. Code Ann. § 41-10-80(B) for a violation of S.C. Code Ann. § 41-10-40(D) since Food Services has not failed to pay all wages due at the time and place designated by S.C. Code Ann. § 41-10-30(A).

IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

This 31st day of January, 1996


 

 

 

 

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