Justices: Voluntary associations must comply with Wage Payment Statute

The Indiana Supreme Court Tuesday ordered more proceedings on a fired union employee’s complaint seeking payment for unused vacation time. The justices held that she is entitled to accrue vacation pay unless there was an arrangement or policy to the contrary, which is in dispute in this case.

In Commissioner of Labor on the Relation of Stephen R. Shofstall, Edward C. Posey, and Deborah N. Posey v. International Union of Painters and Allied Trades AFL-CIO, CLC District Council 91, 49S02-1205-PL-269, Deborah Posey, a clerical employee and voluntary member of CLC District Council 91, her husband Edward Posey and Stephen Shofstall sued after they were fired when Edward Posey and Shofstall – who held elected positions in the union – lost their respective elections. Edward Posey was the union business manager/secretary-treasurer and Shofstall was a union business representative.

The union declined to pay the three for any unused vacation time according to its bylaws. The trial court granted summary judgment for the union on the issue; the Indiana Court of Appeals reversed.

The Supreme Court affirmed with respect to Edward Posey and Shofstall, holding that under the union’s bylaws, it had an arrangement or policy preventing the disbursement of accrued but unused vacation pay to officers. The two had argued they were employees under the state’s Wage Payment Statute.

But the justices decided there was a genuine issue of material fact regarding whether Deborah Posey, as an employee, was entitled to her unused vacation pay. They held that a voluntary association, in the absence of an “arrangement or policy” on vacation pay with respect to employees, must comply with Indiana law and the Wage Payment Statute.

“[N]either the Union’s constitution nor its bylaws define the compensation of Union employees like Deborah. It is undisputed that the Union did not have a written vacation policy for employees during the period that Deborah worked there. Thus, to defeat her claim for accrued vacation under the Wage Payment Statute, the Union must show it had an ‘arrangement or policy’ that limited employees’ right to accrued vacation. We find the Union did not make a sufficient showing to preclude Deborah’s claim,” Justice Mark Massa wrote.

Her suit goes back to the trial court for more proceedings.