I guess the biggest problem here is that her overtime was worked in good faith, after being told they would work something out. She then took vacation, being told not to worry about it counting against her vacation earned, that they'd work something out. None of that had any contract or email tracking - it was all done in good faith. She was a salaried supervisor for this company and worked in excess of 700 overtime hours in the last year and a half and has taken no more than 2 weeks off in that time.
Does she have a leg to stand on with the "in good faith" thing?
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