Fairmont Tool, Inc. v. Davis

• Court: Supreme Court of Virginia
• Parties: FAIRMONT TOOL, INC., Petitioner v. ADAM J. DAVIS, Individually and on Behalf of Those Similarly Situated, Respondent
• Docket Number: 20-0684
• Decision Date: 22 November 2021

FAIRMONT TOOL, INC., Petitioner
v.
ADAM J. DAVIS, Individually and on Behalf of Those Similarly Situated, Respondent

No. 20-0684

Supreme Court of Appeals of West Virginia

November 22, 2021

Submitted: October 6, 2021

Appeal from the Circuit Court of Marion County, The Honorable David R. Janes, Judge Civil Action No. 17-C-163

J. Robert Russell, Esq. David L. T. Butler, Esq. Shuman McCuskey Slicer PLLC Morgantown, West Virginia Counsel for the Petitioner

James B. Stoneking, Esq. Jonathan R. Marshall, Esq. Bailey & Glasser LLP Charleston, West Virginia Matthew B. Hansberry, Esq. Hansberry Law Office, PLLC Charleston, West Virginia Matthew B. Hansberry, Esq. Hansberry Law Office, PLLC Bridgeport, West Virginia Counsel for the Respondent

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CHIEF JUSTICE JENKINS and JUSTICE ARMSTEAD dissent and reserve the right to file separate opinions.

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SYLLABUS BY THE COURT

1. "A circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

2. "Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review." Syl. pt. 1, Appalachian Power Co. v. State Tax Dep't of W.Va., 195 W.Va. 573, 466 S.E.2d 424 (1995).

3. Under the Wage Payment and Collection Act, West Virginia Code §§ 21-5-1(o) (2021) and 21-5-3 (2021), an "assignment of wages" is the transfer of the right to collect future wages from the wage earner to the employer. An assignment of wages is, in effect, any amount that an employer withholds from an employee's wages that does not meet the Act's definition of "deductions" in West Virginia Code § 23-5-1(g) (2021).

4. "Based on the legislative history of the Wage Payment and Collection Act, W.Va. Code, 21-5-1 et seq[.] [1979], compliance with all requirements of the Act is mandatory when assigning an employee's wages." Syl. pt. 4, Jones v. Tri-County Growers, Inc., 179 W.Va. 218, 366 S.E.2d 726 (1988).

5. "A circuit court is afforded wide discretion in determining whether or not a party should be relieved of a stipulation, and such decision should not be set aside absent an abuse of discretion." Syl. pt. 6, W.Va. Dep't of Transportation v. Veach, 239 W.Va. 1, 799 S.E.2d 78 (2017).

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6. "An employee who succeeds in enforcing a claim under W.Va. Code Chapter 21, article 5 should ordinarily recover costs, including reasonable attorney fees unless special circumstances render such an award unjust." Syl. pt. 3, Farley v. Zapata Coal Corp., 167 W.Va. 630, 281 S.E.2d 238 (1981).

7. "Where attorney's fees are sought against a third party, the test of what should be considered a reasonable fee is determined not solely by the fee arrangement between the attorney and his client. The reasonableness of attorney's fees is generally based on broader factors such as: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Syl. pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

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OPINION

HUTCHISON JUSTICE

In this appeal from the Circuit Court of Marion County, we consider a series of orders entered under the West Virginia Wage Payment and Collection Act, W.Va. Code § 23-5-1 to -18 ("the WPCA"). The Legislature designed the WPCA to require an employer to regularly pay employees their full wages and restrict an employer's ability to withhold a portion of employees' paychecks. In this appeal, we examine one such heavily regulated withholding: the authorized wage assignment. For an employee to properly assign wages to an employer, the WPCA specifies that there must be a writing that meets a list of conditions, and in the absence of any one of these conditions the assignment is invalid and unenforceable. For instance, the writing must identify the total amount due to and collectible by the employer through withholdings. The writing must contain statements that the assignment will not be in effect for more than one year and that three-fourths of the employee's wages are exempt from the assignment. And, the writing must show the assignment was accepted and signed by the employer. See W.Va. Code § 21-5-3(e) (2021). Prior to June 17, 2021, the WPCA also required written assignments to be notarized. See W.Va. Code § 21-5-3(e) (2008, 2015, and 2018).

In the instant case, an employer made withholdings from the wages of its employees that met the WPCA's definition of an assignment, but never procured from its employees a writing that complied with the conditions set in the WPCA. After an employee filed a class-action suit to recoup those withholdings, the employer entered into a written agreement stipulating to the method the circuit court would use to calculate certain

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damages if the circuit court declared the withholdings violated the WPCA. Thereafter, the circuit court entered an order finding the employer liable for violating the WPCA. In light of the stipulations on damages, the circuit court later entered orders that awarded the employees the wages improperly taken from their paychecks, liquidated damages, attorney's fees, and costs. The employer now appeals the circuit court's orders.

As we discuss below, we find no error and affirm the circuit court's rulings.

I. Factual and Procedural Background

Defendant Fairmont Tool, Inc., provides services to the oil and gas industry, often at the well pads of clients. Because of the hazardous nature of the work, the company requires employees to wear special equipment such as fire-retardant uniforms and safety boots. Fairmont Tool employs between 75 and 120 workers, depending on market demand. Plaintiff Adam J. Davis began working for Fairmont Tool in 2014 but, on January 3, 2017, Fairmont Tool terminated him from his employment.

On May 31, 2017, the plaintiff filed this lawsuit against Fairmont Tool. The plaintiff contended that Fairmont Tool unlawfully reduced his wages and the wages of other similarly situated employees, and he asked that the circuit court certify a class action. Specifically, he alleged that Fairmont Tool, in the five years prior to the filing of the

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complaint, had improperly taken assignments in the form of paycheck deductions^[1] for uniforms, boots, tools and other protective equipment in violation of the West Virginia Wage Payment and Collection Act ("the WPCA").^[2]

Fairmont Tool quickly admitted to making reductions to employees' paychecks. In an interrogatory, the plaintiff asked whether Fairmont Tool had subjected employees' pay to deductions for uniforms, boots, or other protective equipment in the five years prior to the filing of the complaint. On August 21, 2017, Fairmont Tool answered that it

has and does make certain deductions from some of its employees' paychecks where the employees have voluntarily agreed to participate in a uniform service provided by a third-party vendor or have voluntarily charged boots or tools on Defendant's account, and with Defendant's consent, from a third-party vendor.

In a deposition, the president of Fairmont Tool also admitted the company made deductions from employees' pay for "boots," "uniforms," and other merchandise. During discovery, the company produced spreadsheets documenting hundreds of deductions from employees' paychecks for uniforms and "MDSE (Merchandise)."

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Also on August 21, 2017, Fairmont Tool responded to the plaintiff's request for production of documents. The plaintiff asked Fairmont Tool to produce, for the five-year period preceding the filing of plaintiff's complaint, "a complete copy of all written wage assignments" permitting Fairmont Tool to make deductions from its employees' paychecks for uniforms, boots, tools, or other merchandise. Fairmont Tool responded, "None."

Nine months later, Fairmont Tool amended its response to the plaintiff's request for production of documents. The company asserted that the deductions were not "an assignment of wages pursuant to the West Virginia [Wage] Payment and Collection Act. Consequently, it is the position of Fairmont Tool, Inc. that it does not possess any 'written wage assignments' with regard to its employees." However, Fairmont Tool then provided forty documents, each signed by a different employee between February 2015 and October 2017 and titled "Wage Deduction Authorization Agreement," which said:

I understand and agree that my employer, Fairmont Tool (the Company), may deduct money from my pay from time to time for reasons that fall into the following categories: . . .

3. Installment payments on items purchased on my behalf by the Company (e.g. boots) or cash advances given to me by the Company; and, if there is a balance remaining when I leave the Company, the balance of such purchases or advances[.]

None of these forty writings was signed by the plaintiff; none contains language saying the agreement will not be in effect for more than one year; none specify the total amount to be collected by the employer; none say that three-fourths of the employee's paycheck will be

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exempt from deductions; none are signed by a representative of Fairmont Tool; and none are notarized.

On April 25, 2018, after substantial negotiation between counsel for the parties, a document was filed with the circuit court titled "The Parties' First Set of Stipulations." The stipulations were signed that same day by counsel for the...