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Michelhaugh v. Consolidated Nuclear Security, LLC

Court of Appeals of Tennessee, Knoxville

November 28, 2016

RICHARD MICHELHAUGH, ET AL.
v.
CONSOLIDATED NUCLEAR SECURITY, LLC

          Session Date: October 19, 2016

          Appeal from the Circuit Court for Anderson County No. B5LA0168 Donald Ray Elledge, Judge

          This appeal arises from a dispute over vacation benefits. Richard Michelhaugh and John Williams ("Plaintiffs"), employees of Y-12 in Oak Ridge, filed suit in the Circuit Court for Anderson County ("the Trial Court") against the contractor, Consolidated Nuclear Security, LLC ("CNS"), running their work site. Plaintiffs alleged that CNS deprived them of earned vacation time by changing the vacation policy mid work-year. CNS filed a Rule 12 motion to dismiss, which the Trial Court granted. Plaintiffs appeal to this Court. We find and hold that Plaintiffs alleged in their complaint that they were deprived of earned vacation time, that Plaintiffs' allegations were sufficient to withstand CNS's motion to dismiss, and that, therefore, the Trial Court erred in granting CNS's motion to dismiss. We reverse the judgment of the Trial Court and remand this case for further proceedings.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed; Case Remanded

          Gregory F. Coleman and Mark E. Silvey, Knoxville, Tennessee, for the appellants, Richard Michelhaugh and John Williams, on behalf of themselves and others similarly situated.

          Kristi McKinney Stogsdill and Charles E. Young, Jr., Oak Ridge, Tennessee, for the appellee, Consolidated Nuclear Security, LLC.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Charles D. Susano, Jr., and John W. McClarty, JJ., joined.

          OPINION

          D. MICHAEL SWINEY, CHIEF JUDGE

         Background

         As this case was dismissed by the granting of CNS's motion to dismiss, the facts as set out in this Opinion are those relevant and material factual allegations contained in the complaint. Plaintiffs initiated this case in response to CNS altering their vacation benefits policy mid-year. CNS contracted to lead operations at Y-12 in Oak Ridge. The prior contractor, B&W, had set up a vacation policy whereby salaried employees would accrue a year's worth of vacation time that was awarded in a lump sum at the end of the year. For example, a salaried employee's vacation time was earned throughout 2012, but was awarded in a lump sum on December 31 of that year. If an employee retired on January 1, 2013, the employee could cash in that unused vacation time. The Vacation Plan described the vacation time as "vested."

         The Vacation Plan provided in relevant part:

PURPOSE
It is the policy of B&W Technical Services Y-12, LLC [the predecessor contractor to CNS] to provide annual vacation with pay during each calendar year to eligible employees. Rules pertaining to hourly employees are contained in the applicable collective bargaining agreement. This procedure replaced Y11-114, Vacation Plan, dated 04/09/08 and applies to all B&W Technical Services Y-12 salaried employees.
APPLIES TO
This procedure applies to all Y-12 employees. No provision of this procedure shall be construed as an employment agreement.
***
BUSINESS RULES
B. Vested Rights to Vacation Eligibility for Salaried Employees
A salaried employee has vested rights to next calendar year's vacation if all
of the following are applicable:
• The salaried employee was hired prior to January 1, 1996, or was reinstated on or after January 1, 1996, with immediate restoration of prior service which results in an adjusted company service date of December 31, 1995, or earlier;
•The salaried employee has completed one year of company service credit; and
• The salaried employee was on the payroll of the company on December 31.
NOTE An employee's company service date may be reinstated or adjusted based upon criteria established in Y11-120, ...

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