First, the law: vacation time in California employment is vested and not forfeitable once it is earned. If the employer's policy provides that an employee accrues vacation time under specific circumstances, and the employee satisfies those circumstances, then that makes the right to vacation time payable to the employee. Suastez v. Plastic Dress-Up Co., supra, 31 Cal.3d at 784, 183 Cal.Rptr. at 852.
The law requires that unused vacation time be used within the period of the statute of limitations for either an oral or written contract (dependent upon the character of the employment contract) -- either 2 or 4 years. Thus, if an employee does not receive vacation pay based upon a written employment policy, within 4 years of the date of the employee's termination from employment, then the vacation pay cannot be recovered in court Church v. Jamison (2006) 143 Cal.App.4th 1568, 1581, 50 Cal.Rptr.3d 166, 175.
Other than the above, the only ways that you could take the vacation time from the manager is (1) prove that the "suspect" letter is indeed a fraud. If you can, then that would subject the manager to the regular vacation cap; or (2) file for Chapter 11 bankruptcy and have the debt discharged (which would be a very expensive solution).
If this issue is so important that it could put you out of business, then maybe you need to track down the former manager.
Hope this helps.
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