Baesler's Super-Valu v. Indiana Com'r of Labor ex rel. Bender

• Decision Date: 26 November 1986
• Docket Number: SUPER-VAL,No. 84A01-8603-CV-73,A,84A01-8603-CV-73
• Citation: 500 N.E.2d 243
• Parties: 27 Wage & Hour Cas. (BNA) 1562 BAESLER'Sppellant, v. INDIANA COMMISSIONER OF LABOR ex rel. Lotte L. BENDER, Appellee.
• Court: Indiana Appellate Court

Page 243

500 N.E.2d 243

27 Wage & Hour Cas. (BNA) 1562

BAESLER'S SUPER-VALU, Appellant, v. INDIANA COMMISSIONER OF LABOR ex rel. Lotte L. BENDER, Appellee.

No. 84A01-8603-CV-73.

Court of Appeals of Indiana First District.

Nov. 26, 1986.

Ronald C. Smith, Donn H. Wray, Stewart Irwin Gilliom Meyer & Guthrie, Indianapolis, for appellant.

Robert D. Hepburn, Cox, Zwerner, Gambill & Sullivan, Terre Haute, for appellee.

ROBERTSON, Presiding Judge.

Defendant-appellant Baesler's Super-Valu (Baesler's) appeals an adverse judgment rendered in the Vigo County Small Claims Court in favor of the Indiana Commissioner of Labor. The suit was brought on behalf of Lotte Bender (Bender), a former employee of Baesler's, for vacation pay.

We affirm.

The facts relevant to our decision and favorable to the judgment are undisputed. Lotte Bender worked as a cashier for Baesler's Super-Valu in Sullivan, Indiana, continuously from June 12, 1978 until March 8, 1984. In October of 1983, the labor contract which governed the relations of the parties expired. Thereafter, Baesler's and its employees expressly allowed the agreement to renew itself as provided by Article XXXI of the contract until March 8, 1984, when the labor union of which Bender was a member went out on strike. Article XI of the agreement contained the following provisions with respect to vacations:

A. All employees, unless otherwise exempted herein, shall receive an annual vacation with full pay therefore as follows:

After one (1) year of continuous employment--one (1) week vacation; After two (2) years of continuous employment--two (2) weeks of vacation;

After eight (8) years of continuous employment--three (3) weeks vacation;

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B. Pay for each week of vacation period shall mean pay for the number of hours regularly worked by the employee as a regular workweek during the twelve (12) months next preceding his vacation multiplied by the rate applicable to the hours so scheduled. Provided, however, that the vacation pay for each week of vacation shall not be less than the average weekly earnings of the employee during the twelve (12) months preceding the employee's vacation.

Vacation pay shall be paid to the employee prior to the start of his vacation, ...

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G. Upon termination of employment after one (1) year of employment, the employee shall be paid earned vacation pay equal to the sum of the following:

(A) Annual vacation pay then due the employer (sic) but unpaid; and (B) Vacation pay computed in relation to that which would have been due the employee on the next anniversary date of employment, proportionately adjusted to the number of months employed since the last anniversary of employment, provided the employee is not discharged for dishonesty.

Bender accrued 92 hours of vacation pay for the period of June, 1982 to June, 1983. She took her vacation for that period in July and August, 1983. Payroll summaries submitted by Baesler's dated July 20, 1983, and August 10, 1983, showed that Bender was paid $276.00 for 46 regular hours for each of the weeks reflected in the summaries. Bender testified that during the period of June 12, 1983 through March 8, 1984, she worked an average of 44 hours per week, one 40-hour and one 48-hour week in a two-week period, and was compensated at a rate of six dollars per hour. The small claims court made no findings of fact or law, but awarded Bender damages in the amount of $1224.00 on her complaint for accrued wages, together with attorney's fees of $450.00.

Baesler's presents four issues for our review. We have consolidated these issues into two:

1. Did the trial court err in finding that an employee, whose employment terminates after a union negotiated employment contract has expired, is entitled to accrued vacation pay?

2. Did the trial court properly invoke IND.CODE 22-2-5-1 & 2 in awarding enhanced damages and attorney's fees?

ISSUE ONE

Baesler's maintains that no common law right to vacation pay exists; any entitlement to such compensation must emanate from contract. According to Baesler's, its unionized employees abrogated any right to vacation pay derived from contract by going out on strike. Consequently, the trial court erred in finding that Bender was entitled to compensation because her own actions as a union member participating in the strike nullified her basis for claiming relief. Baesler's cites our decision in Die & Mold, Inc. v. Western, (1983) Ind.App., 448 N.E.2d 44 in support of its argument. We do not concur in its interpretation of our decision.

In Die & Mold, Inc. v. Western, we considered whether, as a matter of law, vacation pay is an element of an employee's labor. 448 N.E.2d at 45. We reached our decision in the context of an employment relationship which began with an oral offer to pay vacation, and, a termination of employment which occurred prior to the employee's anniversary date. In that case, the trial court specifically found that the employer, Die & Mold, had no policy pertaining to the payment of accrued vacation pay upon termination of an employee's employment. Accepting that finding as a basis for discussion, we held that vacation pay is a part of regular compensation: additional wages which are earned weekly with only the time of payment deferred. Id. at 48. Because an employee is entitled to wages up to the time of termination, we concluded that, as a matter of law, the employee would also be entitled to a pro rata share of vacation pay to the time of termination, provided no agreement or published policy existed to the contrary, id. and in light of the fact that an agreement to pay vacation had been made at the time of hiring.

Thus, our decision in Die & Mold involved basic principles of contract law. Once a trial court finds that an agreement to give vacation pay was made, and the services are rendered by the employee as promised, the trial court must find, as a matter of law that the right to receive compensation is "vested". See, id., and cases cited therein. The term "vested" is used ordinarily to indicate that some person or legislature has no legal power to affect the primary right created when the contract was made. See, 3A Corbin on Contracts, Ch. 39 Sec. 742 at 453 (1960).

Moreover, we can find nothing in the contract which would indicate that the parties intended their relationship to vary from the common law as established in Die & Mold. We are unable to identify any language in the contract which would make a strike by the employees operative to extinguish their right to future performance by their employer according to the terms of the contract.

Applying these principles to the present case, it is apparent that Bender was entitled to compensation as a matter of law, even after the expiration of the negotiated union contract. Bender demonstrated that at the time of her anniversary with Baesler's in 1983, a written contract was in effect, by which Baesler's had agreed to pay vacation benefits based upon length of service, and had specifically agreed that accrued benefits would be paid upon termination. The only condition placed upon receipt of accrued vacation benefits at the termination of Bender's employment was the requirement that she not be discharged for dishonesty. The contract contained no provision conditioning the payment of accrued vacation benefits at termination on the passing of the employee's anniversary date. As in Die & Mold, no evidence was presented which would indicate that a change in policy had been negotiated by management in a bargained for exchange or even that any such change in policy had been communicated to the employees. In fact, Baesler testified that the company had agreed to extend the terms and provisions of the contract until a new contract could be reached. Bender continued to perform the services required of her after the expiration of the written contract. She is entitled to the additional wages she earned over this period. To condition the receipt of these benefits accruing under the old contract on the ratification of a new contract would be plainly coercive. N.L.R.B. v. General Time Corp., (7th Cir.1981), 650 F.2d 872, 875. Accord, N.L.R.B. v. Great Dane Trailers, Inc., (1967) 388 U.S. 26, 32, 87 S.Ct. 1792, 1796, 18 L.Ed.2d 1027. (Company's refusal to pay vacation benefits to strikers, coupled with payments to nonstrikers, was discrimination in its simplest form).

ISSUE TWO

Baesler's next contends that the trial court erred in calculating the award in that the judgment exceeds double the highest possible accrued earnings supported by the evidence. We note that because the trial court's judgment was general in nature and did not specify how calculations were made, or that it was premised upon I.C. 22-2-5-1 and 2, we assume that the trial court weighed the equities properly, and we presume that the judgment is premised upon findings which are supported by the evidence. We must affirm unless the appellant has shown an abuse of discretion, or that the decision of the trial court cannot be sustained upon any legal theory. City of Logansport v. Remley, (1983) Ind.App., 453 N.E.2d 326, 328, 329. Assuming the trial court found a base award within the range supported by the evidence, i.e. $396.00-469.00 ¹, it is apparent that the trial court, in reaching its total award of $1224.00, applied a statutory enhancement as the appellee requested such that the total amount of the enhancement equalled double the amount of wages due. We must therefore consider whether the trial court abused its discretion in applying I.C. 22-2-5-1 and 2, and awarding what, in effect, amounts to treble damages.

The right of a court to assess punitive damages and attorney's fees because an employer has withheld accrued wages is entirely statutory ². Standard Liquors v. Narcowich, (1951) 121 Ind.App. 600, 99 N.E.2d 268, 269. I.C. 22-2-5-1 and 2 provide:

Sec. 1. Every person, firm, corporation or association, their trustees,...