Meadows v. Wal-Mart Stores, Inc.

• Decision Date: 09 June 1999
• Docket Number: No. 25325-25329.
• Court: West Virginia Supreme Court
• Parties: Kay K. MEADOWS, Plaintiff Below, Appellant, v. WAL-MART STORES, INC., Defendant Below, Appellee. Beverly Judy and Karen Austin, Individually and as Class Representatives, Plaintiffs Below, Appellants, v. Sheetz Corporation, Defendant Below, Appellee. Christine Remsberg, et al., Plaintiffs Below, Appellants, v. Kmart Corporation, Defendant Below, Appellee. Elizabeth Besaw Hutzler and Contessa Besaw Vanorsdale, Plaintiffs Below, Appellants, v. Easton Molding Corporation, a West Virginia Corporation, Defendant Below, Appellee. H. Vance Stewart, Plaintiff Below, Appellee, v. Waco Equipment Co., dba Waco Scaffolding & Equipment, Defendant Below, Appellant.

530 S.E.2d 676

207 W.Va. 203

Kay K. MEADOWS, Plaintiff Below, Appellant, v. WAL-MART STORES, INC., Defendant Below, Appellee.

Beverly Judy and Karen Austin, Individually and as Class Representatives, Plaintiffs Below, Appellants, v. Sheetz Corporation, Defendant Below, Appellee.

Christine Remsberg, et al., Plaintiffs Below, Appellants, v. Kmart Corporation, Defendant Below, Appellee.

Elizabeth Besaw Hutzler and Contessa Besaw Vanorsdale, Plaintiffs Below, Appellants, v. Easton Molding Corporation, a West Virginia Corporation, Defendant Below, Appellee.

H. Vance Stewart, Plaintiff Below, Appellee, v. Waco Equipment Co., dba Waco Scaffolding & Equipment, Defendant Below, Appellant.

Nos. 25325-25329.

Supreme Court of Appeals of West Virginia.

Submitted January 26, 1999.

Decided June 9, 1999.

Dissenting Opinion of Chief Justice Starcher February 16, 2000.

Concurring Opinion of Justice Davis June 9, 2000.

Gregory W. Sproles, Esq., Breckinridge, Davis & Sproles, Summersville, West Virginia, Attorney for Meadows.

Roger A. Wolfe, Esq., Victoria J. Sopranik, Esq., Jackson & Kelly, Charleston, West Virginia, Attorneys for Wal-Mart Stores, Inc.

Robert J. Schiavoni, Esq., David M. Hammer, Esq., Hammer, Ferretti & Schiavoni, Martinsburg, West Virginia, Attorneys for Judy, Austin, Remsberg, et al., Hutzler and Vanorsdale.

Garry G. Geffert, Martinsburg, West Virginia, Attorney for Judy and Austin.

Richard D. Owen, Esq., J. David Fenwick, Esq., Goodwin & Goodwin, Charleston, West Virginia, Attorneys for Sheetz Corporation.

Larry W. Blalock, Esq., Jackson & Kelly, New Martinsville, West Virginia, Attorney for Kmart Corporation.

Clarence E. Martin, III, Esq., Susan R. Snowden, Esq., Martin & Seibert, Martinsburg, West Virginia, Attorneys for Easton Molding Corporation.

Barbara G. Arnold, Esq., Parkersburg, West Virginia, Attorney for Stewart.

Thomas P. Mannion, Esq., Brian D. Sullivan, Esq., Reminger & Reminger, Cleveland, Ohio, Attorneys for Waco Equipment Co.

Susan R. Snowden, Esq., Martin & Seibert, West Virginia Manufacturer's Association and West Virginia Retailer's Association, for Amici Brief.

Robert M. Steptoe, Jr., Esq., Rodney L. Bean, Esq., Steptoe & Johnson, West Virginia Chamber of Commerce, for Amicus Brief.

MAYNARD, Justice:

These five cases have been consolidated to determine the issue of whether the West Virginia Wage Payment and Collection Act, W.Va.Code §§ 21-5-1 to 21-5-18 (hereinafter "the WPCA" or "the Act"), requires employers to pay employees unused sick leave or vacation pay in the same manner as wages, regardless of the terms of the applicable employment policy, upon separation from employment. After careful consideration, we conclude that it does not. Instead, the specific provisions concerning fringe benefits of the applicable employment policy determine whether the fringe benefits at issue are included in the term "wages" under the WPCA.

I. FACTS

The salient facts of each of the cases before us are as follows.

No. 25325—Kay K. Meadows v. Wal-Mart Stores, Inc.

The appellant, Kay K. Meadows, was employed by the appellee, Wal-Mart Stores, Inc., from September 1990 until her resignation in October 1996. Meadows' sick leave was governed by Wal-Mart's "Illness Protection Policy." The relevant portions of that policy state:

Illness Protection Hours Accrual

Regular full-time Hourly Associates begin to accrue Illness Protection Hours immediately upon employment. Accrued hours are not "available" and may not be used until the Associate has worked six (6) continuous months.

• Rate of Accumulation — Illness Protection Hours accrue at the rate of .023077 hours for each service hour. At this rate, Associates accumulate an average of one-half (½) work day per month, or a total of six (6) average work days per year....

• Maximum Accumulation—Illness Protection Hours may accumulate up to a maximum of 192 hours.

• Conversion to Personal Time—Accrued Illness Protection Hours beyond the maximum accumulation of 192 hours will automatically convert to Personal Time at a conversion rate of 50%. Personal Time may be used without restriction....

* * * * * *

• Qualifying Illness/Injury—The Illness Protection Benefit may be used when absence from work is due to:

The Associate's illness/injury.

Providing care to the Associate's son/daughter who is ill/injured.

* * * * * *

Termination

Unused Illness Protection Hours will not be paid to Associates upon termination of employment except where required by state law.

At the time of her resignation, Meadows had accumulated 192 hours of sick leave for which she was not paid. She was paid for the sick leave which had been converted to personal time. Meadows instituted the underlying action in the Circuit Court of Nicholas County alleging that Wal-Mart failed to pay her accumulated sick leave upon separation from employment in violation of the WPCA.

By order of October 23, 1997, the circuit court granted Wal-Mart's motion for summary judgment. The circuit court held in part:

In enacting West Virginia Code § 21-5-1 et. seq. the legislature did not intend for every employee to be paid for unused sick leave at the time they terminate their employment, but intended it to ensure that employees would be paid wages. To decide otherwise might leave employers in a position wherein they may decide not to offer sick pay benefits to their employees, since the Act does not require employers to offer their employees fringe benefits in the first instance. Consequently, employers can, through an employee policy or other means, limit an employee's entitlement to sick pay exclusively to instances when the employee is ill and, therefore, can provide that unused sick pay is not payable upon an employee's separation from employment.

It is from this order that Meadows appeals.

No. 25326—Beverly Judy and Karen Austin, individually and as class representatives v. Sheetz Corporation

The appellants, Beverly Judy and Karen Austin, individually and as class representatives, were employees of the appellee, Sheetz, Inc.¹, for less than a year before termination. Sheetz provides its employees with a fringe benefit package that includes sick or personal days and vacation time. Sheetz's policy regarding sick days states in part:

All employees may be eligible to earn one sick or personal day after every four months of continuous employment with the company.

The four month periods are:

—January 1 through April 30,—May 1 through August 31,—September 1 through December 31

Eligibility is based on hours worked during the four month period. All employees who work and (sic) average of 32 or more hours per week during a period will earn one paid sick/personal day.

Sick/personal days may accumulate to twelve total days, beyond which no further accumulations will occur until the total falls below twelve. If an employee does not have any accumulated sick or personal days, he or she will not receive any wage payment for any day or days in which he or she did not report to work, unless otherwise approved by the Vice President of Human Resources. Should an employee with accumulated personal and sick days leave the company, no payment will be made for these days.

The policy pertaining to vacation time provided:

Hourly store employees and assistant managers may earn up to three weeks vacation under the following schedule:

One (1) week after 1st anniversary date.

Two (2) weeks after 3rd anniversary date.

Three (3) weeks after 10th anniversary date.

a. Hourly Employee Vacation

Hourly employees will earn vacation on their anniversary date. By this we mean that to earn a vacation, an hourly employee must be employed by Sheetz for 52 consecutive weeks.

At termination, the appellants were not paid for unused vacation time because they had not been employed by Sheetz for 52 consecutive weeks.

As a result, the appellants filed a complaint against Sheetz in the Circuit Court of Berkeley County alleging that Sheetz's failure to pay unused vacation time constitutes a violation of the WPCA. The appellants subsequently amended their complaint to allege that Sheetz failed to pay them for unused sick/personal days upon termination. By order of May 20,1997, the circuit court granted summary judgment on behalf of Sheetz on the issue of vacation pay, concluding that,

2. The West Virginia Wage Payment and Collection Act (W.Va.Code § 21-5-1 et seq.) requires an employer to pay an employee accrued wages and fringe benefits within 72 hours of that employee's discharge. W.Va.Code § 21-5-4(b) (1996). The Act, however, does not require an employer to pay wages and fringe benefits that have not accrued.

3. Sheetz's policy is that employees are entitled to paid vacation only after they have been employed at Sheetz for 52 consecutive weeks.

4. Because Plaintiffs had not been employed at Sheetz for 52 consecutive weeks at the times of their respective separations, Plaintiffs had not earned any vacation and thus are not entitled to compensation for unused vacation under the Act.

By order of December 9, 1997, the circuit court granted summary judgment on behalf of Sheetz on the issue of sick/personal pay and held in pertinent part,

The Act ... does not "require fringe benefits to be calculated contrary to any agreement between an employer and his employees which does not contradict the provisions of [the WVWPCA]." Id. § 21-5-1 (c).

3. Plaintiffs agreed in writing that "[a]ny personal days accumulated during employment and not taken before the last day of work w[ould] not be paid." Consistent with that Agreement, Sheetz's policy provides: "Should an employee with accumulated personal and sick days leave the company, no payment will be made for these days." The Agreement and policy are unambiguous in providing that accumulated sick or personal days will not be compensated upon separation from employment, whatever the circumstances surrounding the separation.

4. The Agreement does not contradict the provisions of the WVWPCA.

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