National Rifle Association v. Ailes, 79-342.

• Decision Date: 05 March 1981
• Docket Number: No. 79-342.,79-342.
• Citation: 428 A.2d 816
• Parties: NATIONAL RIFLE ASSOCIATION, Appellant, v. John C. AILES et al., Appellees.
• Court: D.C. Court of Appeals

428 A.2d 816

NATIONAL RIFLE ASSOCIATION, Appellant, v. John C. AILES et al., Appellees.

No. 79-342.

District of Columbia Court of Appeals.

Argued March 20, 1980.

Decided March 5, 1981.

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Stephen N. Shulman, Washington, D. C., with whom Joseph A. Artabane and Thomas E. Weil, Jr., Washington, D. C., were on the briefs, for appellant.

Mark A. Bayer, Washington, D. C., for appellees.

Before HARRIS, MACK and FERREN, Associate Judges.

FERREN, Associate Judge.

The National Rifle Association (NRA) appeals from a judgment entered on a jury verdict awarding seven of its former employees a total of $90,707.21, representing payment for unused leave accrued during their NRA tenure. NRA contends that (1) the trial court's instruction to the jury impermissibly shifted the burden to NRA to prove that the employees were not entitled to compensation for a portion of their unused leave, and (2) the trial court erred in denying NRA's motions for directed verdict, judgment notwithstanding the verdict, and a new trial, since NRA demonstrated, in any event, that the employees knew about — and thus implicitly had agreed to — an NRA policy limiting compensation for unused leave upon termination. We conclude that the challenged instruction is consistent with the prevailing rule in this jurisdiction. We also conclude that the trial court did not err in denying NRA's directed verdict and post-verdict motions with respect to appellees Ailes, Baggett, Davidson, and Joerg. However, we order entry of judgment notwithstanding the verdict denying damages to appellees Harper, Warye, and Hines.¹

On November 8, 1976, NRA discharged 80 employees, implementing a reduction-in-force for management reasons.² NRA paid each employee all salary accrued to the date of separation, and also made a severance payment based on the individual's length of employment plus any amount due for unused leave (including vacation, sick, and compensatory leave) up to 30 days (or 225 hours).

On August 15, 1977, six of the 80 discharged employees, plus another who resigned,³ filed suit for breach of contract to recover monetary compensation for accrued but unused leave in excess of the 30-day maximum paid by NRA. A jury trial began on October 16, 1978.⁴ At the close of the plaintiffs' case, the court denied NRA's motion for a directed verdict. At the close of all the evidence, NRA moved once again for a directed verdict, which the trial court denied. The jury returned a verdict awarding plaintiffs damages totaling $90,707.21.⁵ The court entered judgment on the verdict, whereupon NRA filed timely motions for judgment notwithstanding the verdict and, in the alternative, for a new trial. The trial court denied both motions. Pursuant to an agreement among the parties, NRA deposited in escrow United States Government Bonds with a total face value of $120,000 to stay the execution of judgment pending this appeal.

II.

NRA contends, first, that in order for a discharged employee to recover monetary compensation from an employer for accrued but unused leave, the employee must prove such entitlement by reference to an express agreement or uniform custom. According to NRA, the trial court misplaced the burden of proof by instructing the jury as follows:

A party who asserts the affirmative of an issue has the burden of proving it. This burden he must generally carry by what is termed a preponderance of the evidence . . .

Leave time is a form of compensation for services and once the services are rendered the right to secure the promised compensation is vested as much as the right to receive wages or other forms of compensation. Vested means fixed, accrued, settled, and absolute. In the absence of expressed agreement to the contrary plaintiffs have a right to recover the value of the promised compensation. Such agreement to the contrary must be shown by the defendant, National Rifle Association of America . . . [Emphasis added.]

As interpreted by NRA, this instruction relieved the plaintiff-employees from having to prove the existence of their contractual rights to payment for unused leave upon discharge from their jobs. Secondarily, NRA argues that, even assuming the law of this jurisdiction places the burden on the employer to show the employee's agreement to forfeit payment for accrued leave once the right to leave itself has been established, the employees hereby implicitly made such an agreement, for they continued to work and receive compensation with knowledge of NRA's limitation on payment for unused leave upon termination.

A. The central question is this: when an employee is not required to take vacation or other paid leave as it accrues, and thus has unused leave at the time he or she is fired, is that employee entitled to payment for the unused leave, in the absence of an agreement or uniform custom to the contrary?

In this jurisdiction, Jones v. District Parking Management Co., D.C.App., 268 A.2d 860 (1970), announced the controlling rule. Jones, a discharged employee, sued his former employer for accrued salary and earned vacation pay. He testified, without contradiction, that his initial agreement with his employer provided for a one-week vacation with pay after his first full year of service; that his paid vacations (which had increased to four weeks per year by the time of his discharge) were based on a March-to-March service year and always had been taken in the summer; and that, at the time of his discharge, he had not taken any of the vacation time earned during the previous March-to-March year. Jones, supra at 861.

The trial court found that Jones had been discharged for good cause and ruled that he thereby had forfeited his vacation pay rights.⁶ We agreed with the trial court's findings that Jones'"conduct [was] inimical to the best interests of [his employer], justifying his discharge." Id. (footnote omitted). We disagreed, however, that "it . . . automatically follow[s] that [Jones] should forfeit deferred vacation pay rights which have already been earned." Id. We held, rather, "that in the absence of an agreement to the contrary the fact that an employee was discharged for cause cannot operate to deprive him of earned vacation pay rights." Id. at 862 (footnote omitted) (emphasis added).

Jones, supra, squarely supports the employee's contention here: as a general rule, an employee who accrues but does not take vacation or other paid leave is entitled to monetary compensation for that leave upon discharge from employment, absent an agreement to the contrary. Id. at 861-62. Accord, Smith v. Kingsport Press, Inc., 366 F.2d 416, 419 (6th Cir. 1966); In re Willow Cafeterias, Inc., 111 F.2d 429, 432 (2d Cir. 1940); Harbridge v. Greyhound Lines, Inc., 294 F.Supp. 1059, 1065 (E.D.Pa. 1969); Berteau v. Wiener Corp., 362 So.2d 806, 808 (La.App.1978); Textile Workers Union v. Paris Fabric Mills, Inc., 22 N.J.Super.App.Div. 381, 384-85, 92 A.2d 40, 42 (1952); Pfeifer v. A.F. Lowes Lumber Co., 206 Or. 115, 123, 291 P.2d 744, 748 (1955); Valeo v. J. I. Case Co., 18 Wis.2d 578, 585-86, 119 N.W.2d 384, 388-89 (1963).⁷ It follows that a discharged employee may establish a right to monetary compensation for accrued but unused leave by pleading and proving that (1) prior to performance of the work, there was an agreement entitling the employee to accumulate leave, and (2) as of the termination date he or she had accumulated the claimed number of days. Any qualification on that right — i. e., any additional agreement between the parties limiting (or defeating) the employee's right to compensation for that leave⁸ — is in the nature of an affirmative defense that must be pleaded and proved by the defendant-employer. See Super.Ct.Civ.R. 8(c); see generally 5 Wright & Miller, Federal Practice & Procedure: Civil §§ 1270-1271 (1969 & Supp.1979). Obviously, "[t]he burden of establishing the terms of a contract rests upon the party suing thereon." Backus v. Veterans Cooperative Housing Ass'n, D.C. Mun.App., 96 A.2d 513, 515 (1953). But that means establishing only the terms essential to recovery; it does not include proving the negative of the other party's assertion that the terms relied on are subject to a qualification (tantamount to another agreement) that defeats the claim.⁹

In summary, the rule of this jurisdiction is: (1) the right to accrue paid leave implies the right to compensation for unused leave upon discharge from employment, and (2) once a discharged employee has established the right to accrue leave and the amount of leave unused, the employee is entitled to compensation for it unless the employer sustains the burden of proving "an agreement to the contrary." Jones, supra, 268 A.2d at 862. We turn, therefore, to the application of the rule.

B. We must consider, initially, whether the appellee-employees made a showing of their right to accrue leave sufficient to trigger the trial court's instruction. The answer unquestionably is yes; very simply, NRA conceded the issue. In paragraph 8 of their complaint, the employees alleged:

All vacation time, sick leave and compensatory time earned by each Plaintiff was a form of compensation for the work performed by each Plaintiff. Each increment of such time was based upon the length of service of each Plaintiff and upon time worked. As each increment of such time was earned, the right to receive payment for such time became fixed and vested in each Plaintiff. [Emphasis added.]

NRA answered, in part:

Subject to the aforesaid limitation of 225 hours maximum which could be accumulated by any one plaintiff, paragraph 8 is otherwise admitted. [Emphasis added.]¹⁰

This concession was reflected in the plaintiffs' evidence. Each employee testified at trial that NRA had hired him full-time and had promised, as compensation for his services, a salary plus paid leave.¹¹ The evidence showed that each increment of leave that an employee accrued but did not use during a particular year was...