If my company was sold and now I’m being denied my paid vacations, is this legal?
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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 11 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.
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