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October 19, 2004
Supreme Court Declines Vacation-Pay Case

The Supreme Court has denied a restaurant chain's request to review a case challenging the company's policy of paying for unused vacation to hourly workers only if they have completed a year of service, the Associated Press reports.

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In California, Denny's Inc. is facing allegations that the company's vacation policy violates a state law requiring employers to pay workers for accrued vacation when they leave their jobs, no matter what an employer's policy states.

Denny's argues that the federal Employee Retirement Income Security Act (ERISA) covers the company's policy, and that the policy is in compliance with ERISA, the news service notes.

The company asked a federal judge to intervene before the case was heard in California court and decide whether federal or state law applies.

However, a federal appeals court ruled that under federal law, a federal judge cannot intervene in state cases involving ERISA, the newspaper reports.

Employers are concerned about possible exposure in state courts.


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