People v. Bishopp

• Decision Date: 08 March 1976
• Docket Number: Cr. A
• Citation: 56 Cal.App.3d Supp. 8,128 Cal.Rptr. 923
• Court: California Superior Court
• Parties: 56 Cal.App.3d Supp. 8, 22 Wage & Hour Cas. (BNA) 1052 The PEOPLE of the State of California, Plaintiff and Appellant, v. Sidney Kirkwood BISHOP, Jr., et al., Defendants and Respondents. 13677. Appellate Department, Superior Court, Los Angeles County, California

Page 923

128 Cal.Rptr. 923

56 Cal.App.3d Supp. 8, 22 Wage & Hour Cas. (BNA) 1052

The PEOPLE of the State of California, Plaintiff and Appellant, v. Sidney Kirkwood BISHOP, Jr., et al., Defendants and Respondents.

Cr. A. 13677.

Appellate Department, Superior Court, Los Angeles County, California.

March 8, 1976.

Burt Pines, City Atty., and Ward G. McConnell, Deputy City Atty., Los Angeles, for plaintiff and appellant.

Jack A. Dahlstrum, Hollywood, for defendants and respondents.

COLE, Judge.

In this matter we hold that the term 'wages' as used in Labor Code section 216, subd. (a) includes vacation pay and that the section does not violate the constitutional prohibition against imprisonment for debt.

The People appeal (Pen.Code, § 1466, subd. 1(b)) from an order of dismissal which followed the sustaining of a demurrer.

Labor Code section 216, ¹ subdivision (a) reads:

'In addition to any other penalty imposed by this article, any person . . . is guilty of a misdemeanor, who:

'(a) Having the ability to pay, willfully refuses to pay wages due and payable after demand has been made.'

The complaint, as amended, charged defendant with violating the statute by his refusal to pay vacation pay earned by and due to one Durham. The municipal court held that the facts alleged did not state a public offense, reasoning that vacation pay was 'supplemental compensation' not intended to fall within the purview of the statute. We disagree, and accordingly we reverse the order.

Two questions are raised on this appeal: (1) Whether vacation pay is 'wages' and (2), if so, whether the action runs afoul of the constitutional prohibition against imprisonment for debt.

I

' Wages' is defined in section 200 as follows: 'As used in this article: ² (a) 'Wages' includes all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.' That definition clearly is broad enough to include vacation pay. Such pay is obviously given to an employee only because the latter has rendered labor ³ to an employer. The trial court recognized this in its ruling, stating that vacation pay is neither a gratuity nor a gift, but rather is compensation supplemental to a wage agreement.

Neither respondent nor the trial court refer to section 200. Rather, they rely upon section 96. That section deals with the assignment of various types of claims to the Labor Commissioner. It lists 'wage claims' separately from 'Claims for vacation pay, severance pay, or other compensation supplemental to a wage agreement.' That language, by itself, could support an argument that the Labor Commissioner should treat wage claims as something different from claims for vacation pay. Such treatment, however, cannot control the specific definition of section 200.

Further, the same article contains section 227.3. That section states: 'Unless otherwise provided by a collective bargaining agreement, ⁴ whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him As wages at his final rate in accordance with such contract of employment or employer policy.' (Emphasis supplied.) This language is a clear indication that vacation pay is included within the definition of wages in section 216 and we hold to that effect.

'(P)ursuant to the present day concept of employer-employee relations, the term 'wages' should be deemed to include not only the periodic monetary earnings of the employee but also the other benefits to which he is entitled as a part of his compensation. . . .' (Wise v. Southern Pacific Co. (1970) 1 Cal.3d 600, 607, 83 Cal.Rptr. 202, 206, 463 P.2d 426, 430.) An interest in a profit-sharing plan has been held to be wages within the definition of section 200. (Ware v. Merrill Lynch, etc., Inc. (1972) 24 Cal.App.3d 35, 100 Cal.Rptr. 791.) Vacation pay is no different.

Respondent and the trial court each cite People v. Power (1958) 159 Cal.App.2d Supp. 869, 324 P.2d 113, for the proposition that the dispute here is only civil in nature. The citation is off point. In Power, an employee had been paid the full amount agreed upon. After his discharge, he argued that he was entitled to the benefits of an agreement existing between his employer and a union. The case did not involve a wilful refusal to pay wages due, an element at issue here.

II

Respondent urges that to apply section 216 to claims relating to unpaid vacation pay would violate the constitutional prohibition against imprisonment for debt. The argument has no merit.

In re Trombley (1948) 31 Cal.2d 801, 193 P.2d 734 is dispositive. ⁵ The case involved a prosecution under section 216. The court rejected a contention that the constitutional provisions invalidated the section. Pointing out that, '(a)lthough by its terms the prohibition is directed to imprisonment in civil actions, it has been held to apply in a criminal proceeding where it appears that the legislation under which the accused is charged constitutes an attempt to make the mere act of failing to pay a debt a crime. . . .' (31 Cal.2d at p. 804, 193 P.2d at p. 737), the court held that section 216, subdivision (a) was not of such character. That subdivision, it noted, imposed liability only on a person who has the ability to pay but wilfully refuses to do so (31 Cal.2d at pp. 805--806, 193 P.2d 734). The word 'wilful,' the court noted, implies a purpose or willingness to commit the act (Penal Code, sec. 7, subd. 1). Thus, subdivision (a) of section 216 makes it a crime for an employer with the ability to pay, knowingly and intentionally to refuse to do so. (31 Cal.2d at pp. 807--808, 193 P.2d 734.) Referring to the historical background of section 15 of article I of the Constitution, the court noted that the provision excepted 'cases of fraud' from the prohibition against imprisonment for debt. The section, and similar sections in other state constitutions, were adopted to protect poor, but honest debtors unable to pay their debts. They were not intended to shield a dishonest person taking unconscionable advantage of another, the court said. (31 Cal.2d at p. 809, 193 P.2d 734.) The court concluded that

'An employer who knows that wages are due, has ability to pay them, and still refuses to pay them, acts against good morals and fair dealing, and necessarily intentionally does an act which prejudices the rights of his employee. Such conduct amounts to a case 'case of fraud' within the meaning of the exception to the constitutional prohibition and may be punished by statute.' (31 Cal.2d at p. 810, 193 P.2d at p. 740.)

Defendant points, however, to dictum in Trombley where it was stated:

'It has long been recognized that wages are not ordinary debts, that they may be preferred over other claims, and that, because of the economic position of the average worker and, in particular, his dependence on wages for the necessities of life for himself and his family, it is essential to the public welfare that he receive his pay when it is due.'

He argues that vacation pay is not used to purchase 'necessities' and that therefore vacation pay cannot be constitutionally included within the constitutional language. The argument misses the mark. The reference to 'necessities of life' does not limit the applicability of the section. People v. Howard (1969) 70 Cal.2d 618, 75 Cal.Rptr. 761, 451 P.2d 401 illustrates this. There, the constitutional provision was held not to prevent criminal prosecution of a contractor under Penal Code section 484b who obtained construction funds and wilfully failed to pay them to those to whom they were due. A diversion of the funds with resultant harm to the homeowner or lender who provided them was held to be so against the 'good morals and fair dealing' referred to in Trombley as to likewise constitute a case of fraud within the exception to the constitutional ban on imprisonment for debt. (70 Cal.2d at pp. 621--623, 75 Cal.Rptr. 761, 451 P.2d 401.) Such funds clearly were not needed by the homeowners or lenders for 'the necessities of life.'

One other matter, not discussed in the briefs, must be considered. At the general election held on November 5, 1974, Proposition 7 was adopted by the voters. It was the result of a recommendation made by the California Law Revision Commission to the Legislature. In the words of the ballot title (Cal. Voter's Pamp.) General Election November 5, 1974, page 26, the proposition 'reorganizes and substantively amends various provisions of Article I . . . California Constitution. . . .' Among other amendments to article I the proposition repealed former section 15 dealing with imprisonment for debt and amended section X to include the former provision, expressing it, however, as follows: 'A person may not be imprisoned in a civil action for debt ....