If my company was sold and now I’m being denied my paid vacations, is this legal?

Asked on June 11, 2012 under Employment Labor Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The issue is "how" was the company sold. There are basically two ways to sell a company:

1) If the company is a corporaton or limited liability company (LLC), then the buyer might--but is not required to--buy the actual corporation or LLC; the business structure, that is. If the buyer does purchase the business structure, then you are still working for the same entity--just that the entity now has a new owner. In this case, you should still get your paid vacation (the buyer doesn't have to pay it out all at once--just honor it), because you're still working with the same company from which you accrued or earned it as part of your compensation.

2) However, the other way to buy a company is to just buy the assets: i.e. the customer list, the inventory, the intellectual property, the tools, etc. This could be done with a corporation or LLC, and is how you'd have to buy a sole proprietorship or partnership (since in those cases, there is no separate legal business entity). When this happens, employees are not really working for the same company anymore--it may have the same name (since the name is one of the things you buy), but it's a different employer. And a different employer does not need to honor vacation provided by a previous employer.

So the nature of the transaction is critical to understanding your rights.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.