State ex rel. Nilsen v. Johnston

• Decision Date: 31 December 1962
• Citation: 377 P.2d 331,233 Or. 103
• Parties: STATE of Oregon ex rel. N. O. NILSEN, Commissioner of the Oregon Bureau of Labor, Respondent, v. Arthur JOHNSTON and Veda Johnston, Appellants.
• Court: Oregon Supreme Court

Page 331

377 P.2d 331

233 Or. 103

STATE of Oregon ex rel. N. O. NILSEN, Commissioner of the Oregon Bureau of Labor, Respondent, v. Arthur JOHNSTON and Veda Johnston, Appellants.

Supreme Court of Oregon, In Banc.

Argued and Submitted Oct. 1, 1962.

Decided Dec. 31, 1962.

Warde H. Erwin, Portland, argued the cause for appellants. With him on the brief was Thomas M. Goldsmith, Portland.

Thomas N. Trotta and Quintin B. Estell, Asst. Attys. Gen., Portland, argued the cause for respondent. With them on the brief were Robert Y. Thornton, Atty. Gen., Salem, and H. J. Belton Hamilton and Thomas Y. Higashi, Asst. Attys. Gen., Portland.

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

ROSSMAN, Justice.

This is an appeal by the defendants, Arthur and Veda Johnston, from a judgment of the circuit court which was entered in an action brought by the plaintiff to recover wages which the plaintiff claims were due plaintiff's assignor, and a statutory penalty for the alleged failure of the defendants to have paid the wages within the time specified in ORS 652.140. The circuit court found that the defendants had paid the plaintiff in full, but that they had been at least five days late in doing so. It therefore penalized the defendants in the amount of $111.80, pursuant to ORS 652.150. In addition, it allowed $75 attorneys fees. The action was instituted by the plaintiff upon the relation of the Commissioner of the Bureau of Labor.

Neither the findings of fact nor the conclusions of law of the circuit court are challenged on this appeal. Instead, the defendants contend that the statute underlying these findings and conclusions is unconstitutional. We will limit our consideration of the facts and the issues to that contention.

The sole assignment of error advanced by the defendants is:

'The Court erred in denying defendants' Demurrer to plaintiff's Second Cause of Action in plaintiff$hs Complaint in that, the provision of the law permitting recovery of a penalty on the basis plaintiff computed the claim in his Second Cause of Action, is unconstitutional and void.'

The provision of law to which the assignment of error refers is ORS 652.150, which provides:

'If an employer wilfully fails to pay any wages or compensation of any employe who is discharged or who quits his employment, as provided in ORS 652.140, then, as a penalty for such nonpayment, the wages or compensation of such employe shall continue from the due date thereof at the same rate until paid or until action therefor is commenced; provided, that in no case shall such wages or compensation continue for more than 30 days; and provided further, the employer may avoid liability for the penalty by showing his financial inability to pay the wages or compensation at the time they accrued.'

ORS 652.140, to which the above-quoted section refers, says in relevant part:

'(1) Whenever an employer discharges an employe, or where such employment is terminated by mutual agreement, all wages earned and unpaid at the time of such discharge shall become due and payable immediately * * *.

'(2) When any such employe, not having a contract for a definite period, shall quit his employment, all wages earned and unpaid at the time of such quitting shall become due and payable immediately if such employe has given not less than 48 hours' notice, excluding Saturdays, Sundays and holidays, of his intention to quit his employment. If such notice is not given, such wages shall be due and payable 48 hours, excluding Saturdays, Sundays and holidays, after such employe has so quit his employment.'

In late August of 1959, Robert E. Smith, who is plaintiff's assignor, was employed by the defendants to cut poles and help clear a right-of-way in the vicinity of Vernonia, Columbia County. Smith had worked only eleven days when a heavy rainfall, which began in September and continued for some considerable time, forced cessation of the work. A few days after he had returned to his home in Vancouver, Washington, Smith notified the defendants that he contemplated the acceptance of employment elsewhere and asked them to pay the wages which were due. A dispute arose as to the amount of compensation to which he was entitled. When the defendants refused to pay the amount he demanded, Smith assigned his wage claim to the Commissioner of Labor, pursuant to ORS 652.330.

Defendants advance a three-pronged argument in support of their contention that ORS 652.150 is unconstitutional. Its essential points are:

1. The statute is uncertain and indefinite regarding sanctions for enforcement of prompt wage payments.

2. The statute is arbitrary and unreasonable in that the amount of the penalty it prescribes has no relationship to the employee's loss or the employer's wrong.

3. The statute discriminates among employers as to the severity of the penalty imposed.

In seeking to establish these points, the defendants have placed before us numerous hypothetical situations which they claim demonstrate the vagueness, the arbitrariness and the discrimination which the statute fosters. A theme common to each of these examples depicts an unwary employer who has been trapped into subjecting himself to a penalty because he was unaware either that the employee's employment had been terminated or that the employee had actually done the amount of work which he claimed he had done. Throughout their brief the defendants proceed on the assumption that an employer who has made an honest and innocent error either in computing what he owes an employee or in assuming that his employee is still in his employ is unfairly penalized for making this error.

The assumption overlooks the fact that ORS 652.150 operates only where the employer has 'wilfully' failed to meet the obligations outlined in ORS 652.140. Its purpose is to protect employees from...