Takeaways
- The Seventh Circuit found in Creason v. Elanco that an Indiana employer’s voluntary “vacation buy” program is a compensation agreement, not an unlawful wage assignment under Indiana wage law.
- The court also held that the Class Action Fairness Act’s home-state exception is not automatic, and parties can waive the right to seek remand by waiting too long.
- The court decision confirms that Indiana employers may enforce clearly stated vacation-forfeiture policies.
The U.S. Court of Appeals for the Seventh Circuit affirmed a district court’s order that an employer’s “vacation buy” program was not a wage assignment under Indiana law, that the home-state exception of the Class Action Fairness Act (CAFA) is not absolute, and that the company did not have to pay out unused COVID-19 rollover vacation hours based on its policy. Creason v. Elanco US Inc., No. 25-1552 (7th Cir. June 29, 2026).
Background
Clayton Creason worked for Elanco from 2017 to 2021 and participated in Elanco’s voluntary “vacation buy” program. Under the program, employees could obtain a fourth week of paid vacation by agreeing to a reduced salary to cover the pay they would have received during the fourth vacation week. For Creason, the reduction was approximately $84 per week. He elected to participate in the program and took all available vacation, including the additional purchased vacation time.
After leaving Elanco, Creason sued under Indiana’s Wage Payment Statute, arguing that the weekly salary reduction was an unlawful wage assignment because Elanco did not comply with Indiana’s wage-assignment statute, which requires certain written disclosures and a right to rescind. He sought to represent a class of similarly situated employees.
He also claimed Elanco should have paid him for unused vacation hours that had been carried over from 2020 during the COVID-19 pandemic. Elanco’s policy allowed certain vacation hours to roll into 2021 but expressly stated that unused rollover hours would not be paid out in cash and would expire if not used. Creason left Elanco’s employment with only those rollover hours remaining…