Litigation Value: $2,500 for Meredith’s workers’ comp claim (those paper cuts can sting!) and more grist for the mill for potential future claims.

Tonight’s episode has the Scranton office continuing to deal with Dunder Mifflin’s acquisition by Sabre International. This time, it is the arrival of Sabre’s colorful president, Jo Bennett, and her two rather large dogs. Much of the episode focuses on the duel between Michael and Jim, as Mrs. (not Ms.) Bennett decides there is no reason to have co-Regional Managers at the branch (which shows already that she is more astute than Dunder Mifflin’s prior management). What starts as a battle to retain the manager’s role ends up being a contest to return to sales, as they realize they can do much better financially under Sabre’s policies as a salesman. At the end of the day, Michael ends up back in the manager’s role while Jim ends up where he belongs, in sales, doing battle with Dwight.

Although the contest between Michael and Jim doesn’t involve potential liability to the company, it points out the issues that can arise when rank-and-file employees earn more than their managers, including a disincentive for the best employees to move into managerial roles. And Dwight and Ryan could be exposing themselves, if not the company, to possible claims arising out of their conversation with Nick the IT guy — Dwight’s false potentially defamatory statement that Jim is under criminal investigation for “molesting people via the Internet” and Ryan’s threat of physical violence if Nick doesn’t turn over Jim’s computer password.

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Litigation Value: Approximately $5,000 – 10,000; Oscar’s Dunder Mifflin vacation time … and the replacement cost of Stanley’s busted windshield.

Employment law issues often get overlooked in a merger while the parties focus on stock price, transition planning, public relations, and other big-ticket concerns. When Gabe announced to the Scranton employees that Sabre offered two weeks of vacation, Oscar complained that he had six weeks banked from Dunder Mifflin. Is he entitled to either cash it out or carry it over to his Sabre employment? Probably.

While not entirely clear, it appears that Sabre purchased a controlling stake in Dunder Mifflin. In this type of stock purchase, the buyer “steps into the shoes” of the company being acquired. Of course, a new employer can make its own policy, but subject to state wage-hour laws. Most state laws prohibit an employer from taking away an employee’s earned or accrued vacation. Oscar’s complaint suggests that Dunder Mifflin permitted employees to carry over earned, unused vacation. So when Sabre stepped into Dunder Mifflin’s shoes, Oscar’s vacation bank should have carried over. Hey, Gabe. Let’s talk about a use-it-or-lose-it vacation policy.

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