McCabe v. Medex

• Decision Date: 04 December 2001
• Docket Number: No. 80,80
• Citation: 141 Md. App. 558,786 A.2d 57
• Parties: Timothy J. McCABE, v. MEDEX.
• Court: Court of Special Appeals of Maryland

786 A.2d 57

141 Md. App. 558

Timothy J. McCABE, v. MEDEX.

No. 80, Sept. Term, 2001.

Court of Special Appeals of Maryland.

December 4, 2001.

Jeffrey L. Forman (Bruce E. Kauffman and Kauffman and Forman, P.A., on the brief,) Towson, for appellant.

Jeffrey Pritzker (Jody Maier and Margolis, Pritzker & Epstein, P.A., on the brief,) Towson, for appellee.

Argued before DAVIS, ADKINS, PAUL E. ALPERT, (retired, specially assigned), JJ.

DAVIS, J.

Appellant Timothy J. McCabe filed suit in the District Court for Baltimore County, pursuant to the Maryland Wage Payment Collection Law, Md.Code (1999 Repl.Vol.), Lab. & Empl. (L.E.) §§ 3-501 to 3-509 (the Act), to recover unpaid commissions from his former employer, appellee Medex. Shortly thereafter, appellee requested a jury trial and the case was removed to the Circuit Court for Baltimore County. Upon receiving appellee's answers to interrogatories, appellant was able to ascertain the exact figure he was allegedly owed. Appellant, therefore, amended his complaint, seeking the sum of $36,450.73, plus $109,352.19 in treble damages, plus pre-judgment interest, costs, and attorneys' fees.

Both parties filed cross-motions for summary judgment; both were denied. The parties then filed a Joint Motion to Bifurcate, requesting an initial ruling on the applicability of the Act, proceeding to trial only in the event the court found the Act prohibited appellee's conduct. The trial court found the Act inapplicable and entered judgment in favor of appellee. Appellant filed this timely appeal shortly thereafter.

Appellant raises one question on appeal, which we rephrase for clarity:

Does § 3-505 of the Act prohibit an employer from conditioning the payment of commissions, set forth in its commission schedule, upon the employee still being employed on the date of the payment, when that employee has met the requirements to receive the commissions?

We answer appellant's question in the affirmative and, therefore, remand the case to the trial court for further proceedings consistent with this opinion.

FACTUAL BACKGROUND

Appellant began working for appellee as a sales representative in November 1998. According to appellee's Compensation Plan, appellant was to receive an annual salary of $49,000, plus commissions. The fiscal year at issue ran from February 1, 1999 through January 31, 2000. Pursuant to appellee's Employee Handbook, all commissions were "conditional upon meeting targets and the participant being an employee at the time of actual payment. If the participant [did] not meet both of the requirements, he or she [was] not eligible to receive payment." Appellant received a copy of the handbook and was made aware of the Incentive Pay Plan.

In December 1999, all sales representatives were informed that appellee was for sale, but that this fact did not change the conditions of the Incentive Pay Plan. Appellant voluntarily resigned on February 4, 2000, four days after the completion of Fiscal Year 2000. Appellee, however, had not yet calculated the amount owed to its representatives for sales completed during the fiscal year. Due to internal procedures, appellee did not schedule the payments of commissions earned during Fiscal Year 2000 until approximately March 31, 2000. Because appellant was not an employee of appellee on that date, he did not receive his commissions totaling $32,850.73.

STANDARD OF REVIEW

We will not set aside the judgement of a trial court unless clearly erroneous. Md. Rule 8-131(c). Although this standard does not apply to a trial court's determination of legal questions or conclusions of law, see Provident Bank v. DeChiaro Ltd. Partnership, 98 Md.App. 596, 634 A.2d 973 (1993),

mixed questions of law and fact are reviewable under the clearly erroneous standard, set forth in Rule 8-131(c). Space Aero Prod. Co. v. R.E. Darling Co., 238 Md. 93,, 208 A.2d 74 (1965)

cert. denied, 382 U.S. 843, 86 S.Ct. 77 (1965).

DISCUSSION

Appellant contends, as he did at trial, that, "if a person has performed all of the work necessary to entitle him [or her] to be paid certain amounts, and his [or her] employment terminates before those payments are made, then he [or she] must be paid those amounts, whenever they are paid, as if he [or she] were still employed." Because appellant completed the sales, ensured that the customers received the product, and secured payment from the customers, he contends that "nothing [he] could have done after January 31, 2000 would have impacted the calculation of the $32,850.73 in any way" and that "attaching an arbitrary payment date to them and then requiring people to remain employed through that arbitrary date ... [flies] in the face of the plain words of the statute."

Appellee counters that the commission payment date of March 31, 2000 was not an "arbitrary date," but that the "timing of the incentive payment was intended to incentivize the employee's continued employment. In other words, the employee had to remain employed with [appellee] to receive the incentive pay." Inherent in its argument is the view that this wage does not constitute a commission, per se, but, instead, it should be analogized to a holiday bonus, because payment served as a reward to appellant for staying through the payment date.

In its opinion dated February 20, 2001, the trial court agreed with appellee, finding the controlling statute to be § 3-505 of the Act, which states:

Each employer shall pay an employee or the authorized representative of an employee all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.

Positing that L.E. § 3-505 is "entirely clear and unambiguous," the trial court reasoned that an employer must only pay those wages which are due and that "[i]ncentive pay is not due until all of the conditions for its payment are met." The court concluded that appellant failed to meet one of the two prerequisites to receiving his "incentive pay"—he no longer worked for appellee—and, as a result, the wage was not due. We disagree.

"[U]nder the Act, employees may have a cause of action based on an employer's failure to pay commissions that were earned during the employment, but which were not payable until after the employee was terminated." Magee v. DanSources Technical Serv., Inc., 137 Md.App. 527, 574, 769 A.2d 231 (2001). Here, the employee had satisfied all of the requirements for receiving a commission except one—he was no longer employed there. In a situation such as this, the statute under consideration serves as guidance, as it clearly states that the employer must pay the employee for wages earned before the termination of his or her employment.

Although we agree that the words of § 3-505 of the Act are "clear and unambiguous," we hold the trial court's interpretation of the statute to be erroneous.

A statute should be construed according to the ordinary and natural import of the language used without resorting to subtle or forced interpretations for the purpose of limiting or extending its operation. That is, we must confine ourselves to the statute as written, and may not attempt, under the guise of construction, to supply omissions or remedy possible defects in the statute.

Wheeler v. State, 281 Md. 593, 596, 380 A.2d 1052 (1977) (citations omitted)(emphasis added). By singling out the word "due," and inventing its own definition for that word, the trial court failed to follow the basic principles of statutory construction. Pursuant to L.E. § 3-505, appellant's commissions were due on or before March 31, 2000, but that has no effect on appellant's eligibility for them. Appellant earned those commissions as wages under L.E. § 3-501(c), and the additional conditions appellee placed on its employees were, therefore, invalid in light of Maryland statutory and common law.

Attempting to support its opinion with a distinction between "commissions" and "incentive pay," the trial court again engaged in improper statutory construction. Appellee utilizes similar semantics on appeal, maintaining that "the incentive pay was a mere gratuity," and that the money sought should be analogized to a bonus. We fail to comprehend the rationale behind either argument. Even if we were to label appellant's commissions as "incentive pay," such money would still constitute a "wage," which includes bonuses, commissions, fringe benefits, or "any other remuneration promised for service," pursuant to the broader definition included in § 3-501(c) of the modern Act. Clearly, incentive pay would constitute remuneration promised for service, because this pay was promised to appellant, as stated in paragraph five of appellee's Employee Handbook:

Total Target Cash Compensation (TTCC) will be comprised of base compensation + incentive. TTCC is what you can earn if you achieve 100% of your performance goals.

The court found that, assuming, arguendo, appellant was entitled to commissions as opposed to incentive pay, "[t]he question of whether or not an employee is entitled to commissions after termination of employment is dependent upon the language of the contract," citing Chesapeake Potomac Tel. Co. v. Murray, 198 Md. 526, 84 A.2d 870 (1951). As appellant correctly points out, however, the Maryland Wage Payment and Collection Law, which governs the case sub judice, was enacted in 1991 and consequently superseded Chesapeake. In fact, the trial court supported the entirety of its findings with case law predating 1991, relying on Chesapeake, supra, as well as Maryland Credit Fin. Corp. v. Hagerty, 216 Md. 83, 139 A.2d 230 (1958). Interestingly, the court failed to rely on those cases that interpreted the Act. See, e.g., Battaglia v. Clinical Perfusionists, Inc., 338 Md. 352, 658 A.2d 680 (1995) (interpreting the meaning of "wage" under L.E. § 3-502); Admiral Mortgage, Inc. v. Cooper, 357 Md. 533, 745 A.2d 1026 (2000...