Rose Acre Farms, Inc. v. Cone, 1-785A174

• Decision Date: 30 April 1986
• Docket Number: No. 1-785A174,1-785A174
• Parties: ROSE ACRE FARMS, INC., Defendant-Appellant, v. Kent C. CONE, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 61

492 N.E.2d 61

ROSE ACRE FARMS, INC., Defendant-Appellant, v. Kent C. CONE, Plaintiff-Appellee.

No. 1-785A174.

Court of Appeals of Indiana,

First District.

April 30, 1986.

Stephen W. Terry, Jr., Brian K. Burke, Elizabeth T. Young, Baker & Daniels, Indianapolis, Corinne R. Finnerty, McConnell, Finnerty & Roche, North Vernon, Kerry L. Thompson, Everitt, Houston & Thompson, Scottsburg, for defendant-appellant.

Mark J. Dove, Rogers & Dove, North Vernon, James R. Kilburn, Railing & Duvall, Scottsburg, for plaintiff-appellee.

NEAL, Judge.

STATEMENT OF THE CASE

Defendant-appellant, Rose Acre Farms, Inc. (Rose Acre), appeals from a judgment entered following a jury verdict awarding plaintiff-appellee, Kent C. Cone (Cone), overtime compensation, vacation pay, bonus pay, and punitive damages, all arising out of employment related claims.

We reverse.

STATEMENT OF THE FACTS

From April 1977 to October 1982, Cone was an employee of Rose Acre, a family-owned corporation in the business of producing and selling chicken eggs. When hired in April of 1977, Cone worked in the construction of chicken houses, including the installation of the cages and equipment within such houses. Cone was promoted in 1980 to the position of House Manager, responsible for the care of the laying hens in the hen houses assigned to him. In 1981, Cone was promoted to the position of Relief Pullet Manager, responsible for the care of the pullets in the houses assigned to him. Cone worked in this capacity until October of 1982 when he left Rose Acre.

During the period of Cone's employment, the terms and conditions of his employment were established by Rose Acre's written employment policy sheets. These policy sheets were changed from time to time by Rose Acre's president, David R. Rust (Rust), and Cone was made aware of other policies and rules during weekly meetings, from contact with supervisory personnel, and from working at Rose Acre on a daily basis. If anyone had a complaint, misunderstanding, or question about his rights or obligations, the policy sheets provided a grievance procedure whereby channels of communication were to be directed to managers Regarding overtime compensation, the policy sheets provided that regular working hours were from 7:00 a.m. to 12:00 noon and from 1:00 p.m. to 4:00 p.m., and managers were to arrive one-half hour earlier and finish one-half hour later. Under the policy sheet dated April 20, 1979, everyone working six full days was to receive double the daily rate of pay for the sixth day worked, but this provision was deleted from subsequent policy sheets. However, when Cone performed construction work for Rose Acre, he was paid one-quarter of the daily rate of pay for each two hours of overtime worked pursuant to an unwritten policy, but such overtime had to be scheduled and approved in advance by a supervisor. When Cone worked as a House Manager and a Relief Pullet Manager, he never received overtime compensation nor had he ever obtained prior approval for such pay from his supervisor. There apparently was another unwritten policy that employees, including Cone, were to remain on the Rose Acre premises during the lunch hour and would receive a free or partially subsidized lunch.

or supervisors, and if not satisfied, they were to then see Rust directly about the problem. The policy sheets formed the basis of several of Cone's claims, including dispute as to overtime compensation, vacation pay, and bonus pay.

Under Cone's claim for vacation pay, the policy sheet required several conditions to be met. These conditions were changed under the policy sheet dated July 21, 1982, the year for which Cone is claiming that vacation pay is due. Rose Acre also offered various bonus incentives to its employees for which it required strict compliance before a bonus would be paid. The bonus relevant to Cone's appeal is the "Cort Acres Progress Bonus" which Cone maintains he earned but was never paid. Additional facts pertaining to vacation pay and the bonus will be developed below.

Finally, in support of his punitive damage claim, Cone alleges several factual matters which he claims amounts to fraudulent and oppressive conduct on the part of Rose Acre. Cone claims he was required to work numerous hours of overtime, contrary to the stated working hours in the policy sheets, for which he was compensated sporadically at best. Though he never availed himself of grievance procedures, Cone also claims the grievance procedure was a sham because when the procedure was attempted, employees met with adverse ramifications such as being ridiculed in front of the employees' peers; being required to work after regular hours without compensation; having a pay cut indiscriminately by the president, Rust, by as much as $150.00 per week; failing to pay bonuses; and being fired from Rose Acre. Cone also alleges Rust attempted to control his life while away from work such as prohibiting him from taking his wife to a bar. Cone cites to additional instances of oppressive conduct "scattered throughout the Record" such as:

"[R]efusing to pay Cone for one-half ( 1/2) day of work because he had failed to shave one morning; Deducting money from Cone's check for failing to wear a 'chicken feather' pin in his lapel while taking his family to the Brownstown Fair; Deducting money from Cone's wage because someone, unbeknownst to Cone left a pop can in a part of a chicken house seldom seen by any person; Deducting money from Cone's wage because he followed the instructions of Rose Acre Farms' vice president with regard to the storage of what are called 'manure shields'; Deducting money from Cone's check because there were weeds behind the house in which Cone lived that were taller than other weeds and further requiring Cone to cut the weeds at [8:00] o'clock P.M. on Christmas Eve."

Nevertheless, in spite of these claims, Cone continued to work at Rose Acre and never sought redress through proper grievance procedure.

ISSUES

There are essentially four issues in this appeal.

I. Whether Rose Acre is obligated to pay Cone overtime compensation.

II. Whether Rose Acre is obligated to pay Cone vacation pay.

III. Whether the Cort Acres Progress Bonus was replaced by the 10% Return on Investment Bonus.

IV. Whether the jury's award of punitive damages is supported by clear and convincing evidence.

In reviewing the evidence, we will only consider the evidence and reasonable inferences therefrom which support the verdict, and where the evidence is in conflict and reasonable minds can differ on an issue, we are bound by the jury's findings. Peterson v. Culver Educ. Found. (1980), Ind.App., 402 N.E.2d 448. However, where the evidence is without conflict and leads to only one conclusion opposite to the conclusion reached by the trier of fact, the judgment must be reversed as a matter of law. See Pepinsky v. Monroe County Council (1984), Ind., 461 N.E.2d 128.

DISCUSSION AND DECISION

Issue I. Overtime Compensation. ¹

It has long been held in Indiana that before a valid claim for overtime compensation can be awarded, there must be an express or implied agreement to that effect. Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Marable (1919), 189 Ind. 278, 126 N.E. 849; State ex rel. Crooke v. Lugar (1976), 171 Ind.App. 60, 354 N.E.2d 755, trans. denied; Trojnar v. Bihlman (1964), 136 Ind.App. 263, 200 N.E.2d 227. It is the employee's burden to prove the existence of such agreement, and it is not sufficient to establish merely that services outside of the ordinary employment were requested by the employer and performed by the employee. Marable, supra. The employee must offer further proof that:

"[T]he services requested were of such a character and were rendered under such circumstances as would lead to the conclusion that a servant performing such services would be reasonably justified in the belief that he would be allowed additional compensation therefor, and that an employer making such request would be reasonably expected to know that additional compensation would be expected. In other words, the character of the work requested and the circumstances attending the request and performance must be shown to be of such a nature as to justify the inference that extra compensation was contemplated by both employer and the employee." (Citations omitted.)

Id. at 281-82, 126 N.E. at 850. Under this approach which considers the character of the services rendered:

"[N]o recovery can be allowed where such services were essentially of the same nature as those usually performed under the contract of employment, or where such services were so intimately connected with the duties to be performed under the contract as to indicate that their performance was contemplated as an incident to service in which the employee was engaged."

Id. at 281, 26 N.E. at 850. Otherwise, a request for performance of services by an employer does not justify the inference of an offer to pay additional compensation since it is assumed that such services were requested and performed under contract of employment. Id.

The course of action which should be taken by an employee in this type of situation was stated in Helphenstine v. Hartig (1892), 5 Ind.App. 172, 176, 31 N.E. 845, 846:

"If he did not know what his employers would expect and require of him in this respect, he could have ascertained, and if he was not willing to labor more than eight hours for a day's work it was his duty to have so informed his employers, so they could have considered that question The cases which followed held that where an employee failed to protest that he was entitled to additional compensation, it raises the conclusive presumption that the amount received by the employee was accepted in full payment of what was due him. Grisell v. Noel Brothers Flour, Feed Co. (1893), 9 Ind.App. 251, 36 N.E. 452. See Trojnar, supra; Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Baker (1919), 73...