Inniss v. Tandy Corp., 68225-9.

Citation141 Wash.2d 517,7 P.3d 807
Decision Date31 August 2000
Docket NumberNo. 68225-9.,68225-9.
CourtUnited States State Supreme Court of Washington
PartiesPatrick S. INNISS, Sam R. Lopez, and Adnan I. Haq, Petitioners, v. TANDY CORPORATION, d/b/a Radio Shack, Respondent.

Legros, Buchanan & Paul, Dennis Michael Moran, Kelly Marie Garrity, Seattle, for Petitioners.

Miller, Nash, Wiener, Hager & Carlsen, James Ralph Dickens, Susan Kathleen Stahlfeld, Seattle, for Respondent.

SMITH, J.

Petitioners Patrick S. Inniss, Sam R. Lopez and Adnan I. Haq seek review of a decision of the Court of Appeals, Division I, which affirmed an order of summary judgment by the King County Superior Court in favor of their employer, Respondent Tandy Corporation, in their action challenging calculation of their overtime compensation. The Court of Appeals concluded in an unpublished opinion the employment practice of a "fluctuating workweek" did not violate the Washington Minimum Wage Act, chapter 49.46 RCW, when calculating overtime compensation at "one and one-half times the regular rate" under RCW 49.46.130(1).1 We granted review. We affirm.

QUESTION PRESENTED

The question presented in this case is whether the employment practice of utilizing a "fluctuating workweek" violates the Washington Minimum Wage Act when calculating overtime compensation at "one and one-half times the regular rate" under RCW 49.46.130(1).

STATEMENT OF FACTS

The material facts are not in dispute.2 Respondent Tandy Corporation is a Delaware corporation doing business in Washington as Radio Shack.3 Petitioners Patrick S. Inniss, Sam R. Lopez and Adnan I. Haq were "V" store managers at various Radio Shack stores in King County from 1993 to 1996.4 Each worked at least forty hours a week, the exact number of hours fluctuating from week to week.5 Overtime hours were paid in accordance with the "Radio Shack Retail Store Manager Compensation Plan for `V' Stores," portions of which provide:

B. Employment Relationship. This compensation plan is not an employment contract but only a method of calculating the manager's total earnings and it is understood that the employment relationship with Radio Shack is an at will relationship.
C. Base Pay. The "V" Store Manager will be paid a base salary as straight time pay for all hours worked each workweek. The base salary shall be determined by the number of complete years of continuous service worked as a Radio Shack Retail Store Manager and shall be structured as shown in the chart below. The base salary will be paid on a weekly or bi-weekly basis as determined by state law.

Overtime will be paid at one-half the calculated regular rate (obtained by dividing the number of hours worked in the workweek into the weekly base salary amount) for all hours worked over forty (40) in any workweek.

Examples of annual pay for 54 hour Tenure Salary Weekly workweek Less than 1 year $15,938 $306.50 $18,000 ------------------ ------- ------- ----------- 1 to 2 years $16,819 $323.45 $19,000 2 to 3 years $17,706 $340.50 $20,000 3 to 4 years $18,590 $357.50 $21,000 More than 4 years $19,479 $374.60 $22,000

Adjustments to the base pay for tenure shall be effective at the beginning of the first pay period beginning after the completion of each full year of continuous service as a retail store manager.
....
L. Work Week. [sic] The manager will typically be scheduled to work 6 days per week.[6]

In 1993, the minimum hourly wage in the State of Washington for an employee "who [had] reached the age of eighteen years" was $3.85 per hour.7 Effective from January 1, 1994 to December 31, 1998, the minimum hourly wage was increased to $4.90 per hour.8 Petitioners "concede that if all of [Petitioners'] commissions, [special incentive bonuses] and bonuses (including annual bonuses) are included in determining [Petitioners'] regular rate of pay, [Petitioners] received at least [the statutory minimum hourly wage]."9

On October 9, 1996, Petitioners filed a complaint against Respondent in the King County Superior Court claiming they were not compensated "at a rate of one and one-half times their regular rate of pay for [their] overtime work"10 as required by the Washington Minimum Wage Act.11 On April 17, 1997, they filed a motion for partial summary judgment on the validity of Respondent's compensation plan for overtime hours under a "fluctuating workweek."12 Respondent filed a cross-motion for summary judgment on May 2, 1997.13 The Honorable Michael J. Trickey on June 30, 1997 signed an order granting Respondent's motion for summary judgment and denying Petitioners' motion.14 The trial court concluded, as a matter of law, that Respondent's method of calculating overtime compensation under a "fluctuating workweek" did not violate the Washington Minimum Wage Act.15

On July 23, 1997, Petitioners filed a notice of appeal to the Court of Appeals, Division I.16 The Court of Appeals, the Honorable Ronald E. Cox writing, affirmed the order granting summary judgment.17 It concluded in an unpublished opinion that Respondent's compensation of its managers under the fluctuating workweek method did not violate the Washington Minimum Wage Act because Petitioners' wages never fell below the statutory minimum.18

Petitioners Inniss, Lopez and Haq petitioned this Court for review of the decision of the Court of Appeals. Review was granted on January 7, 2000.19

DISCUSSION
STANDARD OF REVIEW

This Court reviews an order of summary judgment de novo.20 It engages in the same inquiry as the trial court, treating all facts and reasonable inferences from the facts in a light most favorable to the nonmoving party.21 Where, as here, the parties do not dispute the material facts, this Court will affirm an order on summary judgment if the successful moving party is entitled to judgment as a matter of law.22

Interpretation of a statute is a question of law.23 At issue in this case is the interpretation of RCW 49.46.130(1), which reads:

Minimum rate of compensation for employment in excess of forty hour work week [sic]—Exceptions. (1) Except as otherwise provided in this section, no employer shall employ any of his employees for a work week [sic] longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

(Emphasis added.)

The Washington Minimum Wage Act24 does not define the term "regular rate" under RCW 49.46.130(1).25 But under its compensation plan for "V" store managers, Respondent Tandy Corporation defined "regular rate" as the "weekly base salary amount" divided by the "number of hours worked in the workweek." Petitioners Inniss, Lopez and Haq contend that because their total work hours fluctuate from week to week, Respondent's definition violates the Washington Minimum Wage Act when calculating overtime compensation under RCW 49.46.130(1).26

In 1975, the Legislature enacted RCW 49.46.130 to conform state minimum wage laws to the federal Fair Labor Standards Act of 1938.27 The wording of RCW 49.46.130(1) is similar to the wording of 29 U.S.C. § 207(a)(1), which reads:

(a) Employees engaged in interstate commerce; additional applicability to employees pursuant to subsequent amendatory provisions.
(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

(Emphasis added.)

The Fair Labor Standards Act of 193828 also does not define the term "regular rate."29

When construing provisions of the Washington Minimum Wage Act, this Court may consider interpretations of comparable provisions of the Fair Labor Standards Act of 1938 as persuasive authority.30

In Walling v. A.H. Belo Corp., the United States Supreme Court recognized the complexity of employment relationships and declined to provide a rigid definition of "regular rate" under the Fair Labor Standards Act of 1938.31 It concluded, however, in Overnight Motor Transportation Co. v. Missel, that the term "regular rate" was flexible enough to permit calculation of overtime compensation for a fluctuating workweek.32

In Missel, an employee worked irregular hours for a fixed weekly wage and "brought a statutory action to recover alleged unpaid overtime compensation" under the Fair Labor Standards Act of 1938.33 The United States Supreme Court stated:

No problem is presented in assimilating the computation of overtime for employees under contract for a fixed weekly wage for regular contract hours which are the actual hours worked, to similar computations for employees on hourly rates. Where the employment contract is for a weekly wage with variable or fluctuating hours the same method of computation produces the regular rate for each week. As that rate is on an hourly basis, it is regular in the statutory sense inasmuch as the rate per hour does not vary for the entire week, though week by week the regular rate varies with the number of hours worked.[34]

This Court may also consider the Code of Federal Regulations (C.F.R.) as persuasive authority.35 The United States Department of Labor has promulgated an administrative regulation which defines the term "regular rate" in the context of a fluctuating workweek, published in 29 C.F.R. § 778.114, which reads:

§ 778.114 Fixed salary for fluctuating hours.

(a) An employee employed on a salary basis may have hours of work which fluctuate from week to week and the salary may be paid him pursuant to an understanding with his employer that he will receive such fixed amount as straight time pay for whatever...

To continue reading

Request your trial
43 cases
  • Certification from the U.S. Dist. Court for the E. Dist. of Wash. in Mariano Carranza v. Dovex Fruit Co., 94229-3
    • United States
    • United States State Supreme Court of Washington
    • May 10, 2018
    ...averaging in this context.¶ 21 To support its right to structure a flexible compensation system, Dovex looks to Inniss v. Tandy Corp., 141 Wash.2d 517, 531, 7 P.3d 807 (2000). Def. Dovex Fruit Co.’s Answering Br. at 17-18. The general principle that flexible compensation structures are perm......
  • Hisle v. Todd Pacific Shipyards Corp., 48478-8-I.
    • United States
    • Court of Appeals of Washington
    • September 16, 2002
    ...which the employee is being paid[.]" The MWA is based upon the federal Fair Labor Standards Act of 1938 (FLSA). Inniss v. Tandy Corp., 141 Wash.2d 517, 523, 7 P.3d 807 (2000). When construing provisions of the MWA, courts may consider interpretations of comparable provisions of the FSLA as ......
  • Alvarez v. Ibp, Inc., 02-35042.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 5, 2003
    ...defenses. On the former, the district court determined that the Washington Supreme Court's decision in Inniss v. Tandy Corp., 141 Wash.2d 517, 7 P.3d 807 (2000) (En Banc), did not mandate adoption of the workweek standard as a matter of state law for hourly employees. On the latter, the dis......
  • Fiore v. PPG Indus., Inc., 66956–7–I.
    • United States
    • Court of Appeals of Washington
    • July 2, 2012
    ...of paying overtime wages to salaried employees based upon a “fluctuating workweek” did not violate the MWA. Inniss v. Tandy Corp., 141 Wash.2d 517, 519, 7 P.3d 807 (2000). There, Radio Shack compensated its store managers with a fixed salary “as straight time pay for all hours worked each w......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT