Kohout v. Shakopee Foundry Co., 40716
| Decision Date | 20 September 1968 |
| Docket Number | No. 40716,40716 |
| Citation | 162 N.W.2d 237,281 Minn. 401 |
| Parties | Arthur H. KOHOUT, et al., Appellants, v. SHAKOPEE FOUNDRY CO., Respondent. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. Claims for vacation pay and statutory penalties are governed by a 2-year statute of limitations. Minn.St. 541.07(5).
2. Where a collective bargaining agreement requires 1- and 2-week vacations to be taken before October 1, 1962, and provides that payment for vacation periods shall be made prior to the commencement thereof, claims sued on September 25, 1964, Held barred by 2-year statute of limitations.
3. The fact that vacation pay is barred by a statute of limitations does not also bar penalties under Minn.St. 181.13 for failure to pay wages within 24 hours of demand after discharge. The statute of limitations, Minn.St. 541.07(5), as to such claims does not begin to run until the demand prescribed by Minn.St. 181.13 has been made.
Thomas O. Kachelmacher and Kurt F. Walther, Minneapolis, for appellants.
Eugene A. O'Brien, Minneapolis, for respondent.
This is an action brought by 62 employees of a now defunct corporation to recover vacation pay in the sum of $10,249 and statutory penalties amounting to $17,986.80. The case was tried without a jury. The court held that the claims were barred by the statute of limitations. Plaintiffs appeal from judgment in favor of defendant.
The issues are (1) whether a 2-year or a 6-year statute of limitations applies; (2) on what date the claims for vacation pay accrued; and (3) on what date the statutory penalties accrued.
The reciprocal rights and obligations of the plaintiffs and defendant are governed by a collective bargaining agreement which expired June 1, 1962. Unable to negotiate a new contract, plaintiffs went on strike July 27, 1962, after which date defendant has not resumed business and plaintiffs have not returned to work.
Subsequent to October 14, 1962, defendant company closed down permanently and sold its equipment. Plaintiffs thereafter, on October 26, 1962, gave formal notice they were ending the strike, and on November 14, 1962, asked to resume their employment on the same terms as those under which they were working when the strike began.
Formal demands for vacation pay were made on defendant in October 1962 and again in August and September 1964.
This action was commenced on September 25, 1964.
1. Plaintiffs contend that their claims are governed by Minn.St. 541.05(1), which provides for a 6-year statute of limitations '(u)pon a contract or other obligation, express or implied, as to which no other limitation is expressly prescribed.' Defendant, on the other hand, relies on Minn.St. 541.07(5), which imposes a 2-year statute of limitations as follows:
'For the recovery of wages Or overtime Or damages, fees or penalties accruing under any federal or state law respecting the payment of wages Or overtime Or damages, fees or penalties * * *.' (Italics supplied.)
The question is whether the words 'accruing under any federal or state law' apply only to 'penalties' or whether that phrase applies likewise to 'wages.' 1 No case has been called to our attention construing this provision of the statute.
Prior to its amendment by L.1953, c. 378, Minn.St. 541.07(5) read in part as follows:
'For the recovery of wages, overtime, damages, fees or penalties accruing under any federal or state law respecting the payment of wages, overtime, damages, fees or penalties * * *.'
What the legislature intended by omitting the commas and adding the words 'or,' we are at a loss to understand. By the insertion of the disjunctive 'or' between 'wages,' 'overtime,' and 'damages' and by inserting a comma only after 'damages,' a plausible argument can be made for finding a legislative intention to make 'wages' and 'overtime' more remote from the qualifying phrase 'accruing under any federal or state law,' leaving that phrase applicable only to 'damages, fees or penalties.' Possibly this amendment was prompted by an observation made by Judge Gunnar H. Nordbye in Peterson v. Parsons (D.Minn.) 73 F.Supp. 840, 843, that whether wages owing under a contract, and not under a statute, are governed by the 2-year statute of limitations 'may not be entirely clear.'
Counsel has suggested no rational basis for distinguishing between common-law wage claims and those created by statute in the matter of when they should be asserted after they have accrued. None occurs to us. The 2-year limitation as to wages first appeared in L.1945, c. 513, toward the end of World War II. We can only speculate that the statute may have been prompted by the pending renegotiation of great numbers of government contracts. The original law contained the following provision:
'Causes of action accruing prior to the date hereof, and barred by the provisions hereof, shall be commenced within six months after passage of this act, provided that nothing contained herein shall affect any action or suit for the recovery of wages, overtime, damages, fees or penalties pending at the time of the passage of this act.'
The fact the legislature expressly preserved actions for wages then pending, without reference to whether they arose by statute, may be a legislative recognition that ordinary wage claims would thereafter be affected by the 2-year limitation.
While we are not entirely free from doubt in the matter, in the absence of some valid reason for treating common-law wage claims differently from those arising under a statute, we hold they are both governed by the 2-year limitation prescribed by Minn.St. 541.07(5).
2. The trial court held that plaintiffs' claims were barred because they were not asserted within 2 years of June 1, 1962. We agree that plaintiffs' vacation pay had been earned on that date, but we are of the opinion that under the terms of the collective...
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...assertion. However, it is clear that this statute was primarily designed to deal with actions for wages. Kohout v. Shakopee Foundry Co., 281 Minn. 401, 403-404, 162 N.W.2d 237 (1968).7 That court also indicated that the requirement of a statutory basis for the cause of action is most approp......
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