State v. Lynch

• Decision Date: 24 June 2008
• Docket Number: No. 17996.,17996.
• Citation: 287 Conn. 464,948 A.2d 1026
• Court: Connecticut Supreme Court
• Parties: STATE of Connecticut v. Daniel P. LYNCH.

948 A.2d 1026

287 Conn. 464

STATE of Connecticut v. Daniel P. LYNCH.

No. 17996.

Supreme Court of Connecticut.

Argued February 7, 2008.

Decided June 24, 2008.

Jackie Chan, Danbury, with whom was Steven Boa DeMoura, for the appellant (defendant).

Leon F. Dalbec, Jr., senior assistant state's attorney, with whom, on the brief, were Stephen J. Sedensky, state's attorney, and Warren C. Murray, supervisory assistant state's attorney, for the appellee (state).

ROGERS, C.J., and PALMER, VERTEFEUILLE, SCHALLER and QUINN, Js.

ROGERS, C.J.

The defendant, Daniel P. Lynch, appeals¹ from the judgment of conviction, following a jury trial, of four counts of failure to pay wages in violation of General Statutes § 31-71b.² The question presented by this appeal is whether an agreement between an employer and his employees, providing that the employees' back wages will not become "due" within the meaning of § 31-71b(a) until the employer receives revenue sufficient to pay those wages, is contrary to public policy and, therefore, an invalid defense in a criminal prosecution for failure to pay wages. The defendant claims that, because he presented evidence that he had such an agreement with his employees, the trial court improperly: (1) refused to instruct the jury that if that evidence was credible, the defendant should be absolved of criminal liability; and (2) concluded, as a matter of law, that an agreement to defer the accrual of wages is contrary to public policy and, therefore, an ineffective defense to the crime of failure to pay wages. In this case, the undisputed evidence showed that, at the time of the claimed agreement, the defendant already owed his employees back wages for work they previously had performed. Because those wages already had accrued and become due within the meaning of § 31-71b, the claimed agreement offends the policy underlying the statute. The court, therefore, properly declined to instruct the jury as requested. Moreover, although we previously have held that an agreement to defer the accrual of future wages until an employer receives income is not contrary to public policy; see Ravetto v. Triton Thalassic Technologies, Inc., 285 Conn. 716, 725, 941 A.2d 309 (2008); because the claimed agreement at issue in the present case was to operate retroactively as well as prospectively, the court's ruling that the agreement was invalid was correct. Accordingly, we affirm the judgment of the trial court.

The following procedural history and facts, which the jury reasonably could have found, are relevant to the appeal. In January, 1997, the defendant formed Wireless Communications Products, LLC (Wireless), a start-up company specializing in the development of infrared communications systems, and he subsequently became the majority owner and managing member of that company. Wireless was a small company, employing no more than twelve people during the period in which it was viable.

Wireless started to experience cash flow problems in November, 1999, and, by mid-2001 began missing its biweekly payroll. These problems intensified after the terrorist attacks of September 11, 2001, which negatively impacted the business environment within which Wireless sought to operate. Wireless' wage payments continued to be late and/or intermittent throughout 2002.³ After January, 2003, employees ceased to be paid. Nevertheless, throughout this time period, the defendant did not consider laying off any of these employees.

Four Wireless employees eventually filed claims for unpaid wages with the commissioner of labor (commissioner) and, ultimately, ceased working for the company. The commissioner subsequently referred the employees' claims to a state's attorney for prosecution. Raymond Kallio, a mechanical engineer whose annual salary was approximately $50,000, stopped working for Wireless on May 9, 2003. At the time of trial in October, 2005, Kallio still was owed $27,597. Steven Gallo, an electrical engineer whose annual salary had ranged from $84,000 to $110,000, left the company in April, 2004. At the time of trial, Gallo still was owed $99,450. Jamie Saulnier, Wireless' director of engineering whose annual salary had ranged from $85,000 to $108,000, left the company in December, 2004. At the time of trial, Saulnier was owed $125,192. Joan Fickett, who had performed administrative and accounting functions for an annual salary of $37,000 to $41,000, also left Wireless in December, 2004. At the time of trial, she was owed $21,137.

At trial, the defendant did not dispute that he had failed to pay the amounts claimed. He testified, however, that in the latter half of October, 2002, he had a meeting with all four employees at which he discussed Wireless' prospects for securing an important government contract. According to the defendant, he told the employees that Wireless had no other source of revenues, but that if the contract was awarded to Wireless, it would pay both their past and future wages. The defendant claimed that he asked the four employees to "give [him] a pay deferral arrangement because there's no money to pay the back pay. And there is a possibility that you might not get it." (Emphasis added.) The defendant testified further that he also offered the employees an equity interest in the company in the event they failed to receive their wages pursuant to the pay deferral agreement. He described the purported agreement to defer wages as a "contingent pay obligation," pursuant to which the duty to pay the employees would arise only if and when Wireless received income.⁴

At the conclusion of trial, the defendant requested that the court instruct the jury, in part, as follows: "The defendant has offered evidence that in October, 2002, [Wireless] had an agreement with the four employee-claimants, [Saulnier, Fickett, Kallio, and Gallo], that going forward these employees would be paid for their work at agreed upon annual rates if and when [Wireless] had the necessary cash flow to pay their salaries. The defendant contends that wages were not due until [Wireless] had the necessary income to pay them. If you find that there was such an agreement and that any of the claimants was subsequently paid pursuant to such an agreement, then the defendant did not violate the non-payment of wages statute.

"The foregoing charge is requested based upon the law as stated in Mytych v. [May Dept. Stores Co., 260 Conn. 152, 162, 793 A.2d 1068 (2002)], wherein the [Supreme] Court states: `wage statutes, as a whole, do not provide substantive rights regarding how a wage is earned; rather, they provide remedial protections for those cases in which the employer-employee wage agreement is violated.'"

The trial court, relying on the Appellate Court decision in Haynes Construction Co. v. Cascella & Son Construction, Inc., 36 Conn. App. 29, 647 A.2d 1015, cert. denied, 231 Conn. 916, 648 A.2d 152 (1994), refused to give the requested charge, opining that an agreement such as that alleged by the defendant would violate public policy.⁵ The trial court considered this court's holding in Mytych to be inapplicable, reasoning that it pertained only to the manner in which wages are to be calculated, and not to when they must be paid. Accordingly, the court instructed the jurors as follows: "It is not a defense to [the charges of failure to pay wages] that the defendant may have agreed with an employee to postpone payment of wages until the employer had the necessary income to pay him or her. Such agreements are not valid and may not be considered by you." The jury thereafter returned a verdict of guilty as to all four counts.⁶ This appeal followed.

The defendant claims that the trial court improperly refused to instruct the jury as he had requested and improperly concluded, as a matter of law, that agreements to defer accrual of wages until an employer receives income are contrary to public policy and, therefore, may not be asserted as a defense to charges of failure to pay wages. We conclude that in the present case, because it was undisputed that the defendant already owed his employees back wages at the time the agreement was claimed to have been reached and because the requested instruction did not differentiate between past and future wages but, rather, sought a complete acquittal on the basis of the claimed agreement, the trial court properly refused to give it. Furthermore, although agreements such as those alleged by the defendant, if they are to operate prospectively only, do not necessarily offend public policy, depending on the facts and circumstances of each case, because the court's ruling was directed at the agreement before it, which included back wages, that ruling was legally correct.

Because the defendant's claims are closely related, we will consider them together. The defendant attempted to assert a defense to the crime of failure to pay wages, which had a basis in our prior case law, and he requested a jury charge encompassing that defense. "If [a] defendant asserts a recognized legal defense and the evidence indicates the availability of that defense, such a charge is obligatory and the defendant is entitled, as a matter of law, to a theory of defense instruction. . . . The defendant's right to such an instruction is founded on the principles of due process . . . Before an instruction is warranted, however, [a] defendant bears the initial burden of producing sufficient evidence to inject [the defense] into the case." (Citation omitted; internal quotation marks omitted.) State v. Varszegi, 236 Conn. 266, 281, 673 A.2d 90 (1996). Conversely, the court "has a duty not to submit to the jury, in its charge, any issue upon which the evidence would not reasonably support a finding." State v. Diggs, 219 Conn. 295, 299, 592 A.2d 949 (1991).

The trial court's refusal to instruct the jury as the defendant requested was based on its determination that an agreement to defer wages is not a viable defense to a prosecution...