This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Plaintiffs were employees of a closely held furniture and appliance business owned by a married couple. Following a divorce proceeding, the wife assumed control of the business and requested the Plaintiffs to leave the premises, effectively terminating their employment. The Plaintiffs demanded payment for accrued vacation time, which the Defendant denied, claiming the vacation time had already been used. The Plaintiffs argued that the time off was compensatory time for extra hours worked, not vacation time (paras 2-4).
Procedural History
- Supreme Court of New Mexico: The case was remanded to the trial court to address whether a statutory penalty under NMSA 1978, Section 50-4-4, should be imposed for the Defendant's failure to pay accrued vacation time upon discharge (para 1).
Parties' Submissions
- Defendant-Appellant: Argued that no penalty was due because it provided written notice of wages conceded to be due and unconditionally paid that amount. Alternatively, if a penalty was owed, it should be limited to vacation pay accrued during the sixty-day period following discharge, not continued wages for sixty days (para 1).
- Plaintiffs-Appellees: Contended that the Defendant failed to comply with statutory requirements, including providing proper written notice of the dispute and timely payment of wages. They argued that the penalty should include both wages and vacation pay for the sixty-day period (paras 5-6, 14).
Legal Issues
- Whether the Defendant's actions satisfied the statutory requirements under NMSA 1978, Section 50-4-7, to avoid the penalty under Section 50-4-4 (para 9).
- Whether the penalty under Section 50-4-4 should be limited to vacation pay accrued during the sixty-day period following discharge or include continued wages for sixty days (para 14).
Disposition
- The Court of Appeals affirmed the trial court's judgment, holding that the Defendant failed to meet the statutory requirements to avoid the penalty and that the penalty should include continued wages for sixty days (paras 24-25).
Reasons
Per Benny E. Flores J. (Rudy S. Apodaca CJ and Michael D. Bustamante J. concurring):
- The Defendant failed to comply with the statutory requirements under Section 50-4-7, as it did not provide written notice of the amount of wages conceded to be due or pay the conceded amount within the time limits specified in Section 50-4-4. The payroll check issued by the Defendant did not constitute sufficient notice under the statute (paras 9, 13).
- The penalty under Section 50-4-4 applies to all unpaid wages and compensation, including accrued vacation time, and continues for up to sixty days. The Court rejected the Defendant's argument that the penalty should be limited to vacation pay accrued during the sixty-day period, finding that accrued vacation is a fixed and definite component of compensation, similar to wages (paras 14-23).
- The Court distinguished the case from Litteral v. Singer Business Machines Co., noting that accrued vacation time is not inherently variable like commissions and is therefore subject to the full penalty provision (paras 17-20).