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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 39164
Experience:  Retired (mostly)
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My sister-in-law used to work in a dental clinic in Sacramento,

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My sister-in-law used to work in a dental clinic in Sacramento, CA and she was terminated from work today, 12.6.12. Her employer suspected my sister-in-law of stealing some dental products which was not proven. My sister-in-law has $17,000.00 profit share from her employer but was not given to her. In this connection, what is the legal remedy for this situation?

There are a couple of different possibilities here.

If the profit-sharing program is part of a retirement plan (401(k) or similar), then it is controlled by federal ERISA law (Employee Retirement Income Security Act). As such, the plan cannot refuse to pay "vested" benefits to any participant (that is, benefits to which the participant was already entitled to at the date of termination of employment).

If your sister-in-law is not provided with a means to rollover her retirement to a "rollover IRA" plan with an independent institution, then she can file a complaint with the U.S. Department of Labor, Employee Benefits Security Administration, and the EBSA will probably be able to get the money (click here).

If the profit-sharing plan is not ERISA qualified, then your sister-in-law would have to sue the former employer for the failure to pay the benefit. For an employment rights attorney referral, see this link.

In some cases, the failure to pay benefits due at termination fall within the scope of a wage claim, subject to the authority of the California Divilsion of Labor Standards Enforcement (DLSE). The general rule is that if the profit sharing was earned prior to termination, in whole or in part, then it is a benefit of employment, and DLSE can accept the complaint. So, before she contacts a lawyer, your sister-in-law may want to file a wage claim and see where it goes. See this link.

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Customer: replied 4 years ago.

Thank you for your answer on my question on profit share. However, the main reason of the termination is that my sister-in-law was suspected of stealing dental products which was not proven. This is the cause of her termination today. What is the best legal remedy for a mere suspicion which was not proven. Thank you.

An employee has no legal remedy for a termination of employment based upon a suspected theft. Cal. Labor Code 2922 permits an employer to terminate an employee "at will:" at any time, for any reason, or for no reason at all.

There are exceptions to the "at will" termination rules (unlawful discrimination:race, color, nationality, religion, sex, age, disability, report of employer's criminal activities to law enforcement, jury duty, witness subpoena). And, an employee can sue for breach of contract, where an employer terminates the employee in breach of the employer's written termination policies.

None of these exceptions seems to fit with your allegations, so, at this point, I would have to say that your sister-in-law has no legal action based on the termination of employment, by itself. But, she does appear to have recourse for the profit sharing.

Hope this helps..

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