Massey v. Oregon-Washington Plywood Co.

• Decision Date: 06 July 1960
• Docket Number: OREGON-WASHINGTON
• Parties: Wayne MASSEY, Aldron Russ Modrell and Farrell Snider, Respondents, v.PLYWOOD COMPANY, an Oregon corporation, Appellant.
• Court: Oregon Supreme Court

Page 1039

353 P.2d 1039

223 Or. 139

Wayne MASSEY, Aldron Russ Modrell and Farrell Snider, Respondents, v. OREGON-WASHINGTON PLYWOOD COMPANY, an Oregon corporation, Appellant.

Supreme Court of Oregon, In Banc.

Argued April 13, 1960.

Reargued June 9, 1960.

Decided July 6, 1960.

George J. Perkins, Troutdale, argued the cause and submitted a brief for appellant.

Gilbert Sussman, Portland, argued the cause and submitted a brief for respondents.

Before McALLISTER, C. J., and ROSSMAN, WARNER, PERRY, SLOAN, O'CONNELL and GOODWIN, JJ.

O'CONNELL, Justice.

This is an action brought by the assignees of defendant's employees to recover $2,088.20, the aggregate of 139 claims for pay alleged to be due for July 4, 1954, a holiday, which fell within a contractual vacation period. The claims are based upon the provisions of a working agreement in effect in 1954 between the defendant and the Plywood and Veneer Workers Union, Local 9-427, of which plaintiff's assignors were members. We are called upon to interpret this contract. The contract provides that the vacation period is extended an additional day in the event that the vacation period contains a holiday. The issue on this appeal is whether the defendant's employees, eligible for a vacation, are entitled to pay for the additional day extended by the intervening holiday.

On April 30, 1954, defendant fixed the vacation period from 12 o'clock midnight, July 2, 1954, to 12 o'clock midnight, July 19, 1954. On June 19, 1954, the defendant's employees went on strike and remained out on strike until September 13, 1954. On June 28, 1954, the employees were paid for a two-week vacation period, but no payment was made for the additional day of the vacation period extended by the fact that the holiday on July 4 fell within it.

Plaintiff's complaint was filed on June 26, 1957. Defendant demurred to the complaint on the ground that the action was to recover premium pay and was barred by the one year period of limitation prescribed by ORS 12.120(3). The demurrer was overruled. The case was tried without a jury. The appeal is from a judgment for plaintiffs in the amount of $2,088.20, with interest at 6% from July 23, 1954.

The provisions of the working agreement which are involved in this controversy are as follows:

'Article VII

'Holidays

'The following holidays shall be observed: Armistice Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, Christmas Day, and New Year's Day; * * *.

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'Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, Christmas Day, and New Year's Day shall be recognized as paid holidays for qualified employees.

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'Holiday pay shall be computed at the qualified employee's regular job rate of pay for his regular work schedule for the day so lost but not to exceed eight hours.

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'An employee is eligible for holiday pay if he has at least 31-day seniority prior to the holiday and works the last regularly scheduled work day before and the first regularly scheduled work day after the 'paid holiday,' unless his absence (1) is due to occupational injury or occupational illness, or (2) is excused in writing by the Company.'

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'Article VII-A

'Vacations

'All employees as defined in this agreement shall be granted one week or two weeks vacation with pay, each year beginning with 1941, subject to the following terms and conditions.

* * *

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'4. The vacation shall be one week of seven consecutive days. In the event the vacation week contains a holiday as defined in Article VII, the vacation week shall be extended one additional day.

'5. The amount of the vacation pay shall be one week of forty hours at the employee's straight time hourly rate in effect on the pay day immediately preceding the date fixed as the start of the vacation.

'6. The vacation pay allowance will be paid to eligible employees on the pay day previous to the start of the time assigned for the vacation.'

The defendant asserts three grounds for reversal; (1) that the action is barred by ORS 12.120(3) which requires actions for premium pay to be brought within one year; (2) that defendant's employees accepted the checks given to them on June 28, 1954 in full settlement for all vacation pay, and (3) that the working agreement does not entitle the employees to pay for July 4, 1954, for the reason that they did not work or offer to work on that day or on the last regularly scheduled work day before or after July 4, 1954.

We first consider the applicability of ORS 12.120(3), which provided as follows:

¹'(3) An action for overtime or premium pay or for penalties or liquidated damages for failure to pay overtime or premium pay, shall be commenced within one year.'

Defendant argues that the vacation with pay is a 'premium' given in consideration for length of service. The payment made for such service, it is argued, falls within the commonly understood meaning of 'premium' as 'giving something extra for some act, accomplishment or conduct not necessarily required in the usual line of duty.' The right to a vacation with pay is forthcoming only to those of defendant's employees who fulfill the contract requirements of continuity of employment and seniority. In a sense, then, the paid vacation is a reward or premium given to those employees who meet these requirements. However, we are here concerned not simply with the broad meaning of the word 'premium,' but with the meaning of 'premium pay.' The statute deals with 'overtime or premium pay.' We regard these terms as descriptive of compensation for a certain type of service in addition to the compensation for the usual service rendered in the employment. Premium pay is compensation for extra services over and above the employee's regular services, as in the case of overtime work or night shift work or other types of services performed under unusual conditions. See, Bay Ridge Operating Co. v. Aaron, 1948, 334 U.S. 446, 465, 68 S.Ct. 1186, 92 L.Ed. 1502; Wage and Hour Manual (Cum.Ed.1949) WHM 91:1-91:10; Premium Pay Provisions in Selected Union Agreements, Monthly Labor Review, U. S. Dept. Labor, Vol. 65, p. 419. We understand the term to mean a rate of pay, i. e., the hourly rate for such extra services, and not a gross sum paid as a bonus or as a general reward for meritorious services. Therefore, we hold that the term 'premium pay' as used in ORS 12.120(3) does not describe vacation pay and the statute does not constitute a limitation on the bringing of the present action.

As its second assignment of error defendant asserts that the lower court erred in not holding that the payment made to defendant's employees on June 28, 1954, was in full settlement of their claim for vacation pay for the year 1954. Each employee received a check in an amount which compensated him only for the vacation period and not for the additional day. The appendix to each check indicated that it was for 'vacation pay' and also carried the notation, 'Statement of earnings and deductions. Detach before depositing and retain for your record.' Defendant argues that the cashing of these checks without complaint or question constituted full settlement of the employees' claims, apparently on the theory of an accord and satisfaction. But there is no evidence that the checks were offered and received in satisfaction of a disputed claim made for additional compensation. Therefore, the evidence to support an accord and satisfaction is lacking.

In oral argument defendant relied upon Kennedy v. Weyerhaeuser Timber Company, Wash.1959, 344 P.2d 1025 in support of the position that the employees, by accepting vacation pay without demand for the payment of an additional day extended by an intervening holiday, had given a practical construction to the working agreement. The working agreement involved in the Kennedy case was essentially the same as the working agreement before us. The court held that the employer's bookkeeping and payroll records reflected the practice of paying only those employees who qualified for holiday pay under the holiday section of the working agreement, disqualifying an employee for a paid holiday which fell within a vacation period if he did not work on the first regularly scheduled work day after the vacation. We do not know specifically what facts the court relied upon in deriving the practical construction of the contract. Even though we should accept the court's reasoning (which is subject to criticism as the dissent in that case points out), the fact remains that we do not, in the case at bar, have sufficient evidence of the practices of the defendant employer and its employees from which we could conclude that the parties placed upon the working agreement a construction contrary to the position taken by plaintiffs here. Evidence was introduced by defendant showing that certain employees did not receive holiday pay for a holiday falling within a vacation period, but the defendant failed to show that these employees would have qualified for an additional day's pay under any construction of the contract. We cannot say, therefore, that the parties arrived at a practical construction of the working agreement consistent with defendant's position. In view of this lack of evidence, it is not...