Rule of Parity

I want to check my sanity.  I am taking over an ESOP and I think the prior TPA didn't handle vesting for rehires correctly via the Rule of Parity.  I know of no exception to that rule.  If the person had any vested amounts prior to termination upon being rehired they get all their Years of Service for Vesting is my understanding.  This is regardless of the number of BIS. 

For example:

There is a person they are telling me had 8 YOS when they terminated.  As such he was 100% vested with that money.  His money is still in the ESOP even.  The person was rehired well after 5 BIS.  They show him as having earned 3 YOS since they were rehired and thus 40% vested on the new money. 

Am I missing something or is that a clear violation of the Rule of Parity? 

That would be my understanding.

if his old $ were only 60% vested and he had been gone over 5 years, then that money wouldn't increase in vesting (because most likely he should have forfeited the unvested portion) but he still gets credited for al prior service.

ERISA Outline Book Chapter 4, Section V,  Part C indicates

2.c.Cannot apply rule of parity once any degree of vesting is earned. Note that once a participant earns any degree of vesting (e.g., 20% vested under the plan's vesting schedule), there is no break in service rule that will permanently disregard his prior service for vesting purposes. If the participant incurs a break in service, the only rule that may apply to the prior service is the "one year break" rule discussed in 1. above, under which it is possible to get the prior service re-credited. 

but this is just (maybe easier to understand) comment from Code Section 411(a)(5)(D) for which service not to count there is a section for Nonvested Participant, but there is no section for Vested Participant.

in other words, you can exclude years for a nonvested participant but not a vested particpant