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Texas Appellate Court Upholds Jury Verdict in Favor of Employee for Unused "Paid Leave" Based on Oral Promise

This week, the Court of Appeals for the First District of Texas in Harris County upheld a jury verdict awarding Careen M. Plummer $2,300 in unpaid “paid sick days” and “paid vacation” and $61,662.50 in attorney fees.

Plummer worked for Jetall Companies, Inc. for a year and half before resigning from her position as a property manager. While employed by Jetall, she entered into a written employment agreement which listed her total annual compensation and also said she was entitled to “5 days of paid sick leave” and “1 week of paid vacation” after 1 year of employment. Soon after Plummer resigned, she demanded payment for various amounts owed under the employment agreement including payment for unused paid leave she accrued after her first year of employment. Jetall disputed that the employment agreement entitled Plummer to payment for unused vacation or sick leave. In support of her position, Plummer testified that Jetall’s president told her during employment negotiations that her vacation and sick days accrued and that she would be compensated for any unused paid leave that accrued.

The appellate court recognized that the employment agreement expressly provided that Plummer was entitled to paid vacation and paid sick leave instead of just saying she would be entitled to sick leave and vacation. Because the agreement specifically stated Plummer was entitled to paid leave coupled with Plummer’s testimony regarding Jetall’s president’s oral promise during negotiations, the court concluded there was sufficient evidence to support the jury’s verdict.

Although this case may be reviewed by the Texas Supreme Court, it is a reminder that when drafting employment agreements, employers should specify if and when benefits like sick leave and vacation accrue or whether they must be used during employment and lost when employment ends. If you have any questions about this opinion or need assistance drafting language for your employment agreements to clarify when accrued leave will be paid, please feel free to contact Kemp Smith’s Labor and Employment Department at 915-533-4424.