If a company changes owners, does the new company have to honor old vacation time?
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If a company changes owners, does the new company have to honor old vacation time?
My wife works for an orthodontist office. The doctor just sold the practice to another doctor. The new doctor just took away the employees vaction time. Can he do that?
Asked on April 24, 2012 under Employment Labor Law, New Jersey
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
The best way to answer your question is to review the purchase agreement with respect to the sale of the orthodonist office. If there was accrued vested vacation time before the sale which was not used by an employee and the new employer will not honor accrued vacation time carrying over into the new ownership, most likely the former owner is responsible for paying this vacation time to the former employee.
However, if there is no vacation time under the new owner where there was before the sale, the new owner can do what he or she wants to do regarding such. However, any accrued vacation time that was not used by an employee needs to be paid by the prior owner under the circumstances that you have written about.
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