Employer is bound by pay policy in handbook

The amount of holiday and vacation compensation owed to an employee should be calculated based on an insert in an employee handbook she received during her interview in December 2008, a Superior Court judge in Rhode Island has ruled.

The employer contended that the employee was put on notice of a different holiday and vacation pay policy “with every passing holiday where her paycheck did not include holiday pay.”

Judge Kristin E. Rodgers did not agree.

“There is no evidence that [the employer] provided [the employee] with an updated handbook concerning holiday and vacation pay,” the judge wrote.

The 10-page decision is LVD Staffing, Inc. v. State of Rhode Island, et al.

Matter of credibility

Pawtucket attorney Bernard P. Healy represented the Department of Labor and Training. He said the result in the case came down to a matter of credibility.

Healy also said Rodgers’ decision is a warning to employers to be careful before handing over written policies to employees during the hiring process.

“The fact is there was a stated policy,” Healy said, adding that the employer attempted to set forth oral testimony trying to rescind that.

“Both the department and the judge were entitled to reject that argument,” he said.

The employer’s counsel, Craig J. Watkinson of Warwick, declined to comment, noting that his client was considering a further appeal.

Employment history

Appellee Carolyn B. Charnley filed a complaint with the Department of Labor and Training’s Division of Labor Standards alleging non-payment of holiday and vacation wages due at the time of her separation from appellant LVD Staffing. LCD was a local franchise of Express Employment Professionals, a national chain providing staffing services.

Charnley had interviewed at Express in December 2008, at which time she was given an employee handbook that included an insert entitled “Holiday and Vacation Pay.”

On the insert, “Holiday Pay” was followed by a single asterisk and text that read: “When your normal work schedule is less than 8 hours per day, holiday and vacation pay will be adjusted accordingly.” “Vacation Pay” was followed by double asterisks and text that stated: “Benefits may vary at different locations.”

According to the employee’s testimony, an Express representative name Elaine informed her that those pay provisions applied to her.

Thereafter, Charnley worked with Express from Sept. 22, 2009, through March 3, 2011, and was placed at Wild Tree Herbs. She was assigned to one job during that time and was ultimately hired by Wild Tree Herbs, resulting in her separation from Express in March 2011.

The employee did not receive any holiday or vacation pay during the time she worked with Express.

On Sept. 23, 2011, a hearing was conduct by hearing officer Valentino D. Lombardi. The employee testified at the hearing, as did Maria Lopes and Susan Esposito on behalf of Express.

The hearing officer found that, based on the holiday and vacation pay insert included in the handbook that Charnley obtained in her December 2008 interview, she was entitled to pay consistent with the terms set forth therein.

The hearing officer explained that Express “presented no credible or substantial testimonial or other evidence to dispute the testimony of [Charnley]” that she had received a document detailing holiday and vacation pay and discussed the same with a representative of Express.

‘More than a scintilla’

The employer contended that the hearing officer erred in awarding holiday and vacation pay “precisely as stated in a Franchisor produced handbook and flyer dated (01/08) and notwithstanding language in close proximity that stated ‘benefits may vary by location.’”

Furthermore, the employer argued that the department’s decision was “made notwithstanding the employer provided two credible witnesses who gave testimony that LVD Staffing Inc. maintained a policy of no holiday pay and no vacation pay.” The employer contended that the hearing officer improperly rejected the testimony of Esposito and Lopes.

“Express essentially asks this Court to substitute its judgment on the weight of the evidence presented and conclude that its two witnesses and the practice of the company warrant reversal of the DLT Decision,” Rodgers wrote.

The judge found that to be an impermissible request in light of the competent, relevant evidence in the record that supported the agency’s decision.

The employer asserted that the employee was put on notice of a different holiday and vacation pay policy than she had been given in writing in December 2008 with every passing holiday in which her paycheck did not include holiday pay. That argument was based on the Rhode Island Supreme Court’s 1981 decision in Oken v. National Chain Co.

But Oken was distinguishable, the judge said, finding that “Charnley’s receipt of paychecks without holiday pay included does not rise to the level of a written notice of modification, a subsequent discussion and an ultimatum as was the case in Oken.”

Rodgers pointed out that the evidence before the hearing officer did not demonstrate that, during the course of her employment, the employee had been expressly told that the holiday and vacation pay policy was anything other than what she was given in writing in December 2008.

“The Hearing Officer in the instant case relied upon the testimony of Charnley, the Holiday and Vacation Pay insert she was provided at her December 2008 interview, and the company’s inability to present credible evidence to refute the information that Charnley claims she was provided in advance of her hiring by Express,” the judge found.

“This is surely more than a scintilla of relevant evidence which reasonable minds would accept as adequate to support a finding in Charnley’s favor,” Rodgers concluded.