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05/19/95 LINDA HERRON v. MAGNA GROUP

May 19, 1995

LINDA HERRON, PLAINTIFF-APPELLEE,
v.
MAGNA GROUP, INC., DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Madison County. No. 94-ESC-360. Honorable George Filcoff, Judge, presiding.

The Honorable Justice Chapman delivered the opinion of the court: Maag, P.j., and Hopkins, J., concur.

The opinion of the court was delivered by: Chapman

JUSTICE CHAPMAN delivered the opinion of the court:

From October 13, 1992, through October 13, 1993, Linda Herron worked for Magna Group, Inc. (Magna Group), in the company's Illinois office. Magna Group closed its Illinois office in late 1993, and Herron was given the option of transferring to a Missouri branch or terminating her employment. On November 1, 1993, Herron transferred to a Magna Group office located in Missouri. Plaintiff resigned on December 3, 1993. Magna Group refused to pay Herron for any of her unused 1993 vacation time. Herron brought this action to recover vacation time accrued during her employment in Illinois in 1993. The trial court awarded Herron $1,078.77. We affirm.

According to Magna Group's employee handbook:

If employed in the State of Illinois, an employee who is discharged or resigned is entitled to be paid all earned vacation time not taken at the time of separation at their final rate of pay. For all time worked (full completed months) during a particular year, employees earn a pro-rata portion of their vacation entitlement that they will be eligible to take the following year. No employment contract or policy can provide for forfeiture of earned vacation time upon separation under the Illinois law. Court interpretations of the Illinois law requires [sic] payment of accrued vacation benefits to terminated employees on a pro-rata basis." (Emphasis added.)

Magna Group contends that Illinois law does not apply in this case because plaintiff was a Missouri employee when she left Magna Group. Magna Group argues that Herron's status as a Missouri employee at the time of her resignation operated as a forfeiture of otherwise-earned vacation pay because Missouri law provides that the terms of the employment policy govern the calculation of vacation pay benefits upon termination, and defendant's employment policy provides that employees working outside of Illinois are not entitled to earned vacation. Magna Group concedes that it would owe plaintiff the amount claimed if she had been employed in Illinois at the time she resigned.

Defendant points out that plaintiff could have resigned on October 31, 1993, while she was an Illinois employee and would then have been entitled to vacation pay accrued during the 10 months she worked in Illinois in 1993. Magna Group argues that, since Herron chose to move to a Missouri office from which she subsequently resigned, she cannot now complain of her decision.

Herron worked in Illinois at all times until October 31, 1993. At the time of her transfer to Magna Group's Missouri office, Herron had worked for 10 months in 1993 in Illinois and had accrued vacation time during those months. Because of the company's stated policy not to compensate employees for vacation time in the same calendar year in which they worked, Herron could not seek compensation until 1994. The question presented for our determination is whether section 5 of the Illinois Wage Payment and Collection Act (820 ILCS 115/5 (West 1992)) and the employee manual entitle plaintiff to the vacation pay accrued while she was employed by defendant in Illinois even though she was working in Missouri at the time of her resignation.

Turning to the employee manual, we note three points. First, the language, "If employed in the State of Illinois, an employee *** is entitled to be paid all earned vacation time," does not require the employee to be employed in Illinois at the time of discharge or resignation. Rather, the phrase indicates that all earned vacation time is to be paid if the employee was employed in Illinois at the time he or she earned the vacation time. This brings us to the second point.

The employee manual itself indicates that all earned vacation time, accrued while employed in Illinois, is vested.

"For all time worked (full completed months) during a particular year, employees earn a pro-rata portion of their vacation entitlement that they will be eligible to take the following year." (Emphasis added.)

Thus, according to defendant's own manual, plaintiff, who earned her vacation time while employed in Illinois, is entitled to ...


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