Fiore v. PPG Indus., Inc.

• Citation: 279 P.3d 972,169 Wash.App. 325
• Decision Date: 02 July 2012
• Docket Number: No. 66956–7–I.,66956–7–I.
• Court: Court of Appeals of Washington
• Parties: Andrew FIORE, Respondent, v. PPG INDUSTRIES, INC., a Pennsylvania Corporation, Appellant.

169 Wash.App. 325

279 P.3d 972

Andrew FIORE, Respondent,

v.PPG INDUSTRIES, INC., a Pennsylvania Corporation, Appellant.

No. 66956–7–I.

Court of Appeals of Washington,

Division 1.

July 2, 2012.

Douglas Edward Smith, Littler Mendelson, Seattle, WA, Robert W. Pritchard, Littler Mendelson, Pittsburgh, PA, Kerry Notestine, Littler Mendelson, Houston, TX, for Appellant.

Patrick Leo McGuigan, Lisa Anne Burke, Donald W. Heyrich, Heyrich Kalish McGuigan PLLC, Seattle, WA, Kenneth Wendell Masters, Masters Law Group PLLC, Bainbridge Island, WA, Paul Michael Crisalli, Washington State Court of Appeals, Tacoma, WA, for Respondent.

DWYER, J.

[169 Wash.App. 330]¶ 1 Where an employee's duties consist principally of manual labor and individual retail sales, the employee's primary duty is not “ promoting sales” pursuant to our state's minimum wage laws. Relatedly, such duties do not constitute administrative operations exempting the employee from the overtime wage protections of the Washington Minimum Wage Act ¹ (MWA or Act). Here, PPG Industries, Inc. (PPG) classified its employee, Andrew Fiore, as an administrative employee exempt from the requirements of the MWA and, accordingly, did not pay to Fiore overtime wages as mandated by the Act. Because PPG cannot meet its burden of demonstrating that Fiore was an administrative employee pursuant to the MWA, the trial court properly granted Fiore's summary judgment motion seeking to recover wrongfully withheld overtime wages.

¶ 2 However, in granting to Fiore an award of attorney fees, the trial court improperly granted a .25 multiplier on the fee award. Because Fiore sought a trial de novo in the superior court following an unfavorable arbitration decision, he faced the risk of being required to pay PPG's attorney fees if he did not improve his position on the trial de novo. This risk, a public policy preference imposed by our legislature, does not provide a proper basis for the award of a multiplier. Moreover, the lodestar amount awarded here fully compensates Fiore's counsel for the time-consuming nature of the litigation. Thus, although we affirm in all other respects, we reverse the trial court's utilization of a multiplier in calculating Fiore's attorney fee award.

I

¶ 3 This overtime wage dispute arose from PPG's classification of certain of its employees as exempt from the protections of our state's minimum wage laws. These employees, who hold the position of “Territory Manager,” are assigned responsibility for certain Lowe's “home improvement” retail stores within a designated geographical region. Lowe's stores sell Olympic brand paints and stains, which are PPG products, to their customers. Territory Managers are members of PPG's “Lowe's National Olympic Field Sales Team.”

¶ 4 Andrew Fiore was employed by PPG as a Territory Manager for approximately 40 weeks from February until November 2009. Fiore was assigned to the “Northwest Region,” where he was responsible for servicing nine Lowe's retail stores in Washington and two such stores in Oregon. PPG required him to service two stores each day, for four hours each, and to visit each store at least three times per month. In the course of his store visits, Fiore spent many hours driving to, from, and between his 11 assigned stores. However, he was not paid for his driving time. Following his store visits, Fiore was also required to review and respond to e-mail messages and voice mail directives from management and to submit various reports to his regional manager. PPG did not compensate Fiore for the time he spent engaged in these activities. Fiore was compensated on a salary basis.

¶ 5 PPG terminated Fiore's employment.

¶ 6 Fiore thereafter filed an overtime wage claim against PPG, contending that PPG had failed to pay him overtime wages in violation of the MWA. Although Fiore's complaint stated the amount in controversy to be less than $50,000, PPG removed the case to federal court, asserting that the amount in controversy should include potential attorney fees of nearly $400,000. The federal court rejected PPG's argument and remanded the case to the superior court. PPG then filed a motion to transfer the case to mandatory arbitration. Following an arbitration ruling favorable to PPG, Fiore sought a trial de novo in the superior court.

¶ 7 The parties filed cross motions for summary judgment. Following a subsequent hearing, the superior court granted in part Fiore's motion for summary judgment, ruling that PPG could not sustain its burden of demonstrating that Fiore was an administrative—and, thus, exempt—employee pursuant to the MWA. The superior court additionally ruled that the fluctuating workweek method of calculating damages was not applicable. The court determined, however, that material issues of fact remained with regard to whether PPG willfully withheld the wages owed to Fiore and the number of overtime hours that Fiore had worked.

¶ 8 The parties thereafter jointly requested that the superior court determine whether PPG had willfully withheld the wages owed to Fiore and, thus, whether Fiore was entitled to double damages for his overtime claim. PPG asserted that a “bona fide” dispute existed with regard to whether it owed Fiore overtime wages and, thus, that it could not be found to have willfully withheld such wages. The superior court rejected PPG's argument. The parties thereafter stipulated to damages in the amount of $12,203.10. Due to its finding of willfulness, the superior court entered judgment against PPG in the principal amount of $24,406.20.

¶ 9 Pursuant to statutory authorization, Fiore requested an award of attorney fees and costs, including a .50 multiplier, which, he asserted, was warranted based upon the risk that he had faced in seeking a trial de novo. The superior court found that Fiore was “in the unfortunate situation of being the ‘test case’ ” due to similar lawsuits filed against PPG throughout the country. The court additionally found that PPG engaged in an “aggressive litigation strategy” and that Fiore's counsel, who were hired on a contingency fee basis, undertook an “extraordinary risk” that they might receive no fees at all. The superior court granted to Fiore an award of attorney fees and costs in the amount of $596,559.47, including a .25 multiplier.

¶ 10 PPG appeals.

II

¶ 11 PPG first contends that Fiore was an administrative employee pursuant to the MWA and, thus, that he was not entitled to the overtime wage protections of the Act. In so doing, PPG attempts to characterize Fiore's primary duty as “promoting sales,” which qualifies as an administrative operation exempt from the requirements of the MWA. But this is a mischaracterization of the work that Fiore performed, which principally entailed manual labor and individual retail sales. Because such duties do not constitute administrative operations, Fiore was not exempt from the protections of our state's overtime wage law.

¶ 12 We review de novo both questions of statutory interpretation and orders granting summary judgment. Cerrillo v. Esparza, 158 Wash.2d 194, 199, 142 P.3d 155 (2006). “Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.” Cerrillo, 158 Wash.2d at 200, 142 P.3d 155. Here, the superior court determined on summary judgment that Fiore was not an exempt administrative employee pursuant to RCW 49.46.010(5)(c) and, thus, that PPG violated the MWA by failing to pay Fiore overtime wages. Thus, we review the superior court's order de novo. See Cerrillo, 158 Wash.2d at 199, 142 P.3d 155.

¶ 13 The MWA requires employers, absent certain exceptions, to pay to their employees overtime wages at a rate of one and one-half times the employees' regular rate of pay for hours worked in excess of 40 hours per week. RCW 49.46.130(1). An employer can assert that its employee falls into one of these exemption categories and, therefore,is not entitled to overtime wages; however, the employer bears the burden of proving the applicability of such an exemption. Drinkwitz v. Alliant Techsystems, Inc., 140 Wash.2d 291, 301, 996 P.2d 582 (2000). “Exemptions from remedial legislation, such as the MWA and FLSA [Fair Labor Standards Act], are narrowly construed and applied only to situations which are plainly and unmistakably consistent with the terms and spirit of the legislation.” Drinkwitz, 140 Wash.2d at 301, 996 P.2d 582.

¶ 14 The MWA statutorily exempts from its overtime wage protections employees who work in a “bona fide ... administrative ... capacity.” RCW 49.46.010(5)(c). “[A] multifactored definition of the duties of exempt administrative employees” is set forth in regulations interpreting the Act. Mitchell v. PEMCO Mut. Ins. Co., 134 Wash.App. 723, 731–32, 142 P.3d 623 (2006); see alsoWAC 296–128–520. As relevant here, an employee is administratively exempt where (1) he or she is compensated on a salary basis at a rate of not less than $250 per week, (2) his or her “primary duty consists of the performance of office or nonmanual work directly related to management policies or general business operations of his [or her] employer or his [or her] employer's customers,” and (3) the employee's work “includes work requiring the exercise of discretion and independent judgment.” WAC 296–128–520(4)(b)²; see also Mitchell, 134 Wash.App. at 731–32, 142 P.3d 623. The parties do not dispute that the first requirement is met here. Thus, in order to demonstrate that it properly classified Fiore as an administrative employee exempt from MWA protections, PPG must show that Fiore's position as a Territory Manager meets the latter two requirements.

¶ 15 First, in order to demonstrate that Fiore was an exempt administrative employee, PPG must show that Fiore's “primary duty consist[ed] of the performance of office or nonmanual field work directly related to management policies or general business operations.” WAC 296–128–520(1). An...