Richard Michelhaugh v. Consolidated Nuclear Security, LLC
This case concerns an appeal by employees Richard Michelhaugh and John Williams against Consolidated Nuclear Security, LLC (CNS) over disputed vacation benefits. Plaintiffs alleged CNS unlawfully deprived them of vacation time earned in 2014 by implementing a new policy on December 11, 2014, effective January 1, 2015, which retroactively eliminated their accrued vacation. The Circuit Court for Anderson County initially granted CNS's motion to dismiss, concluding the vacation plan was not a contract and CNS had the right to change policies. However, the Tennessee Court of Appeals at Knoxville reversed this decision, ruling that while the plan itself was not an employment contract, employees could not be divested of compensation (vacation benefits) already earned under the previous policy. The appellate court remanded the case for further proceedings, emphasizing that employers cannot retroactively reduce earned compensation.