Smith v. Kount, Inc.
| Decision Date | 20 October 2021 |
| Docket Number | Docket No. 48228 |
| Citation | 169 Idaho 460,497 P.3d 534 |
| Court | Idaho Supreme Court |
| Parties | Nathan SMITH, an individual, Plaintiff-Appellant, v. KOUNT, INC., a Delaware corporation authorized to do business in the State of Idaho, Defendant-Respondent. |
Rossman Law Group, PLLC, Boise, for Appellant. Matthew Gunn argued.
Holland & Hart, LLP, Boise, for Respondent. Dean A. Bennett argued.
This case arises from an employee's claim, filed pursuant to the Idaho Wage Claim Act, seeking to recover bonus compensation that his employer refused to pay following the employee's resignation. Nathan Smith ("Smith") appeals from a district court order granting summary judgment in favor of his former employer, Kount, Inc. ("Kount"), and denying his cross motion for summary judgment on the grounds that the compensation agreement unambiguously required Smith to remain employed until a specified date to earn the bonus compensation and Smith resigned before that date. For the reasons discussed below, we affirm the district court's decision.
Kount is a fraud prevention firm with headquarters in Boise, Idaho. In the spring of 2018, Smith began working at Kount as a business development representative. As part of his employment agreement, Smith entered into a written agreement with Kount governing the terms of his compensation—the Incentive Compensation Plan ("ICP"). Under the ICP, Smith could earn two separate forms of compensation: a set annual base salary paid monthly, and additional "variable compensation" that was paid quarterly for meeting certain enumerated metrics. The ICP refers to "Variable Compensation," "Target Incentive," and "Commissions." For ease of reference, we will refer to the additional metric-based compensation as "variable compensation."1
Kount updated the ICP at the beginning of each calendar year. On January 2, 2019, Smith signed an updated ICP effective through December 31, 2019. Section 3 of the ICP, entitled "Compensation Components," provided a participant's compensation may include base salary, commission-based incentive pay, bonus-based incentive pay, other bonuses, and potentially other non-cash compensation.
Exhibit A to the ICP is a "Plan Acknowledgement Form" ("PAF"), which set forth Smith's name, assignment, annual base salary, and variable compensation. The 2019 PAF set Smith's annual base salary at $35,500. The PAF also identified four metrics for determining the amount of variable compensation payable to Smith under the ICP: (1) call volume; (2) conversations; (3) overviews/demos; and (4) closed/won deals, and specified bonus amounts based on the number of completed events in each metrics category.2
With respect to variable compensation, Section 2 of the ICP provided that "[i]ncentives are earned based upon the attainment of performance measure quotas and goals as described herein below." Section 3 of the ICP provided, in relevant part:
Each Participant's PAF specifies the base salary, annual Target Incentive (TI) opportunity, goals, and other related individual information for each participant. No amounts will be earned under the [ICP] until an applicable event or activity is complete, including all applicable forms as designated by Kount.
Section 6 of the ICP, entitled "General Payment Conditions," provided, in relevant part:
In order to receive Commissions payments, you must complete all required documentation and reports, and be an employee in good standing at the time of payment. No incentives will be earned or paid for a contract signed after the Participant's termination of employment, for any reason. Unpaid Variable Compensation will be forfeited in the event a Participant separates from Kount before payment is made ... Commissions will be paid forty-five (45) days after the end of each quarter.
In 2019, the end of the third quarter ("Q3") fell on September 30, 2019. Pursuant to the ICP, Q3 variable compensation was scheduled to be paid on November 15, 2019. Before the end of Q3, on September 17, Smith submitted a two-week notice of his resignation from employment with Kount; his last day coinciding with the end of the quarter. At the time Smith submitted his two-week notice, he claims he would have been eligible for $6,600 in variable compensation for Q3 based upon the PAF's metrics.
On September 17, Smith met with his supervisor, Scott Przybyla, to discuss his resignation. Smith disclosed he was leaving for another job. Przybyla explained that Smith would not receive his Q3 variable compensation unless he remained employed with Kount on the scheduled payment date—November 15, 2019. Smith asked Przybyla to make an exception. On September 23, 2019, Przybyla denied the request. Smith's last day at Kount was September 23, 2019. Kount paid Smith his base salary through his last day of employment but did not pay Smith any variable compensation for Q3.
On December 16, 2019, Smith filed a complaint against Kount alleging a violation of the Idaho Wage Claim Act based on Kount's failure to pay Smith the $6,600 in variable compensation.3 Shortly thereafter, both parties filed motions for summary judgment. Following a hearing, the district court issued a memorandum decision and order granting Kount's motion for summary judgment and denying Smith's cross-motion for summary judgment because the ICP unambiguously required Smith's continued employment as a condition precedent to earning the Q3 variable compensation, Smith failed to satisfy that condition, and as a result was not entitled to the compensation. The district court subsequently entered a judgment dismissing Smith's claim. Smith timely appealed.
Did the district court err in concluding that Kount was not required to pay Smith any variable compensation because he failed to remain an employee in good standing on the designated payment date?
When reviewing a district court's ruling on a motion for summary judgment, this Court applies the same standard used by the district court in ruling on the motion. Turner v. City of Lapwai , 157 Idaho 659, 661, 339 P.3d 544, 546 (2014). That is, summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." I.R.C.P. 56(a). Furthermore, all disputed facts are "construed liberally in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are to be drawn in favor of the non-moving party." Bedke v. Ellsworth , 168 Idaho 83, 91, 480 P.3d 121, 129 (2021) (quoting Venable v. Internet Auto Rent & Sales, Inc. , 156 Idaho 574, 578, 329 P.3d 356, 360 (2014) ).
"The fact that the parties have filed cross-motions for summary judgment does not change the applicable standard of review, and this Court must evaluate each party's motion on its own merits." Id. at 90, 480 P.3d at 128 (quoting Potlatch Educ. Ass'n v. Potlatch Sch. Dist. No. 285 , 148 Idaho 630, 633, 226 P.3d 1277, 1280 (2010) ).
Where the parties have filed cross-motions for summary judgment relying on the same facts, issues and theories, the parties effectively stipulate that there is no genuine issue of material fact that would preclude the district court from entering summary judgment. However, the mere fact that both parties move for summary judgment does not in and of itself establish that there is no genuine issue of material fact.
Id. (quoting Intermountain Forest Mgmt., Inc. v. La. Pac. Corp. , 136 Idaho 233, 235, 31 P.3d 921, 923 (2001) ) (internal citations omitted). Issues of statutory interpretation are questions of law which are reviewed by this Court de novo. Hayes v. City of Plummer , 159 Idaho 168, 170, 357 P.3d 1276, 1278 (2015) (citing State v. Schulz , 151 Idaho 863, 865, 264 P.3d 970, 972 (2011) ).
Idaho's Wage Claim Act governs an employee's claim to wages against a former employer. Bakker v. Thunder Spring-Wareham, LLC , 141 Idaho 185, 189, 108 P.3d 332, 336 (2005) (citing I.C. § 45-601 et seq . )). The parties do not dispute that the variable compensation in question constituted "wages" for purposes of the Wage Claim Act. With respect to the payment of wages for currently employed individuals, the Wage Claim Act requires only that employers pay their employees the minimum wage for all hours worked and pay employees on a scheduled payday at least once a month. Savage v. Scandit, Inc. , 163 Idaho 637, 641, 417 P.3d 234, 238 (2018) (citations omitted); see also I.C. § 45-608(1). Beyond that, the parties to an employment contract are free to negotiate the terms of an employee's compensation. See Bakker , 141 Idaho at 190, 108 P.3d at 337 (); Savage , 163 Idaho at 640–41, 417 P.3d at 238–39 (citing Bakker , 141 Idaho at 190, 108 P.3d at 337 ) ("While employers are required to pay wages [at least] monthly, the employer and employee have a great deal of freedom to determine how that compensation will be paid.").
When an employee separates from his employer, the Wage Claim Act requires the employer to pay "all wages then due the employee" on the next scheduled payday or within ten days, whichever is sooner. I.C. § 45-606(1). In determining whether wages are "due" to an employee and thus required to be paid under Idaho Code section 45-606(1), "this Court often looks to whether the employee is entitled to the wages for services rendered or whether there is more they must do in order to be entitled to the wages." Savage , 163 Idaho at 641, 417 P.3d at 238 (citations omitted). "If the employee was entitled to the commission at the time he brought the suit it would fall under the IWCA [Idaho Wage Claim Act], if there was more that he was required to do then it would not." Id.
Smith concedes that Kount paid him at...
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