Walczak v. Labor Works-Fort Wayne, LLC

• Decision Date: 05 March 2012
• Docket Number: No. 02A04–1109–PL–509.,02A04–1109–PL–509.
• Citation: 966 N.E.2d 642
• Parties: Brandy L. WALCZAK, Individually and on behalf of those similarly situated, Appellant, v. LABOR WORKS–FORT WAYNE, LLC, d/b/a Labor Works, Appellee.
• Court: Indiana Appellate Court

966 N.E.2d 642

Brandy L. WALCZAK, Individually and on behalf of those similarly situated, Appellant,

v.LABOR WORKS–FORT WAYNE, LLC, d/b/a Labor Works, Appellee.

No. 02A04–1109–PL–509.

Court of Appeals of Indiana.

March 5, 2012.

Philip J. Gibbons, Jr., Andrew G. Jones, Gibbons Jones, P.C., Indianapolis, IN, Attorneys for Appellant.

F. Larkin Fore, Fore Miller & Schwartz, Louisville, KY, Michael T. Yates, Ryan S. Ross, More Miller Yates & Ross, Fort Wayne, IN, Attorneys for Appellee.

FRIEDLANDER, Judge.

Brandy L. Walczak, on behalf of herself and all others similarly situated, appeals the trial court's grant of summary judgment in favor of Labor Works–Fort Wayne, LLC (Labor Works) in her action for unpaid wages. Walczak frames the issue in this dispute as one of standing, i.e., whether she has standing to sue for improper payroll deductions and unpaid wages under Ind.Code Ann. § 22–2–5–1 et seq. (West, Westlaw through end of 2011 1st Regular Sess.) (the Wage Payment Statute) and I.C. § 22–2–6–1 et seq. (West, Westlaw through end of 2011 1st Regular Sess.) (the Wage Deduction Statute). We address the following related but different issue: Did the trial court have subject-matter jurisdiction over Walczak's lawsuit?

We reverse and remand with instructions.

The relevant facts are that Labor Works is a company that provides temporary day-laborer services to businesses in the Fort Wayne area. Those businesses communicate to Labor Works that they will need a certain number of laborers on specified days to perform specified tasks. In order to meet the need for laborers, Labor Works selects persons who have appeared at its facility on the day in question, having already completed certain steps to become eligible to accept an assignment for work. These steps include: (1) the completion of a pre-employment form, providing information such as work history and hours of availability, (2) submit to an interview with a Labor Works representative; and (3) sign forms pertaining to (a) Labor Works's substance-abuse policy, (b) agreements that the applicant will reimburse Labor Works in the event the employee loses or destroys work equipment provided by Labor Works, and (c) the applicant's agreement to pay transportation costs to and from work sites in the event that the applicant uses Labor Works transportation.

After passing Labor Works's vetting process, applicants appear at Labor Works's facility in the morning, where they might receive a work assignment, although none is guaranteed. The assignment is good for one day only and the applicant is paid for work at the end of the day on which it was performed.

Beginning on December 20, 2009, and continuing until March 9, 2010, Walczak sought work through Labor Works on a sporadic basis. Of relevance in this appeal, she was hired by Labor Works to work on January 27, 2010. She did not seek work on January 28, but did report to Labor Works on January 29. No work was offered to her on that day. She did not seek work again at Labor Works until February 2. Meanwhile, on February 1, 2010, Walczak filed a lawsuit on behalf of herself and others similarly situated against Labor Works alleging violations of the Wage Payment Statute and the Wage Deduction Statute.

On October 22, 2010, Labor Works filed a motion for summary judgment. Citing I.C. § 22–2–9–2 et seq. (West, Westlaw through end of 2011 1st Regular Sess.) (the Wage Claims Statute), Labor Works contended that Walczak did not have a right to file her lawsuit and that the court did not have jurisdiction over her claim. The Wage Claims Statute states, in relevant part, as follows:

Whenever any employer separates any employee from the pay-roll, the unpaid wages or compensation of such employee shall become due and payable at regular pay day for pay period in which separation occurred: Provided, however, [t]hat this provision shall not apply to railroads in the payment by them to their employees.

I.C. § 22–2–9–2(a). Moreover, I.C. § 22–2–9–4 (West, Westlaw through end of 2011 1st Regular Sess.), provides that actions brought under the Wage Claims Statute must be resolved as follows:

It shall be the duty of the commissioner of labor to enforce and to insure compliance with the provisions of this chapter, to investigate any violations of any of the provisions of this chapter, and to institute or cause to be instituted actions for penalties and forfeitures provided under this chapter. The commissioner of labor may hold hearings to satisfy himself as to the justice of any claim, and he shall cooperate with any employee in the enforcement of any claim against his employer in any case whenever, in his opinion, the claim is just and valid.

Pursuant to this provision, only the Commissioner of the Department of Labor (the DOL) may investigate and initiate such claims against the employer. Labor Works contended in its motion that Walczak did not have standing to file the lawsuit in the Allen Superior Court because the claim arose under I.C. § 22–2–9–4, pursuant to which she was required to file her claim with the DOL. This, in turn, was based upon the claim that Walczak was "separated from the pay-roll" within the meaning of I.C. § 22–2–9–2 at the time she filed her complaint. In summary, there are two separate statutes that govern actions to recover unpaid wages. One, the Wage Payment Statute, applies to current employees and employees who voluntarily leave employment, either temporarily or permanently. See St. Vincent Hosp. & Health Care Ctr., Inc. v. Steele, 766 N.E.2d 699 (Ind.2002). The other, the Wage Claims Statute, governs actions involving employees who were involuntarily separated from employment at the time the claim was filed. The parties agree that this appeal turns upon the determination of which statute applies to Walczak.

We note first Walczak's argument that the Wage Claims Statute applies only in cases where the claimant was fired (or whose work was suspended due to a labor dispute). Because Walczak was not "fired" in the traditional sense of that term, so the argument goes, then the Wage Claims Statute does not apply. The trial court rejected this argument in granting summary judgment in favor of Labor Works. We decline to address this argument, however, because we conclude that this matter must first be submitted to the DOL for resolution.

In Reel v. Clarian Health Partners, Inc., 917 N.E.2d 714 (Ind.Ct.App.2009), trans. denied, three former employees, on behalf of themselves and other employees involuntarily separated from their former employer, filed a proposed class action against their former employer alleging the employer did not timely pay paid-time-off wages as required by the Wage Claims Statute. The employer filed a Trial Rule 12(B)(1) motion to dismiss their claim for lack of subject matter jurisdiction on grounds that the Wage Claims Statute required that their cause must first be submitted to the DOL. This court affirmed, holding that a claim arising under the Wage Claims Statute must first be submitted to the DOL before the aggrieved part is entitled to file a lawsuit in court. The court stated, "because these proposed class members did not first pursue administrative proceedings, the trial court did not have subject matter jurisdiction over their purported wage claims." Id. at 720.

Similarly, in Hollis v. Defender Sec. Co., 941 N.E.2d 536 (Ind.Ct.App.2011), trans. denied, a former employee brought an action against his former employer on behalf of himself and others alleging that his former employer had violated the Wage Payment Statute by failing to pay agreed wages in a timely fashion. The employer filed a motion to dismiss the claim on grounds that the employee had failed to exhaust his administrative remedies. The dispositive issue in that case was whether the claim was properly designated as arising under the Wage Claims Statute or the Wage Payment Statute. The trial court granted the motion, concluding that the claim arose under the Wage Claims Statute. The pivotal determination in that case was that "an employee's status at the time he or she files the claim is the relevant inquiry in determining whether to proceed under the Wage Payment Statute or the Wage Claims Statute." Hollis v. Defender Sec. Co., 941 N.E.2d at 540. Based upon this determination, we held: "Instead of submitting his claims to the DOL, as required by Wage Claims Statute, [he] improperly filed a complaint based on the Wage Payment Statute. Because [he] did not allege any Wage Claims Statute violations and submit his claims to the DOL, the trial court properly dismissed [his] claims." Id.

Reel and Hollis indicate that the failure to file with the DOL a claim that properly belongs under the Wage Claims Statute divests the trial court of subject-matter jurisdiction. In those cases, however, the ruling under review was a dismissal for want of subject-matter jurisdiction. In this case, we review a grant of summary judgment on grounds that the claim should have been brought under the Wage Claims Statute and therefore that the trial court lacked subject-matter jurisdiction in this action. There is authority for the proposition that a case that should properly have been brought under the Wage Claims Statute, but was not, may be resolved in the manner it was here, i.e., via summary judgment. See Gavin v. Calcars AB, Inc., 938 N.E.2d 1270, 1272 (Ind.Ct.App.2010) (having determined that the appellant's claim should have been submitted to the DOL, the court stated, "his complaint is barred as a matter of law"), trans. denied. See Ind.Code § 22–2–9–4. The trial court did not err when it entered summary judgment in favor of [the employer]. Which approach is appropriate here?

We have received some guidance on this question in Johnson v. Celebration Fireworks, Inc., 829 N.E.2d 979 (Ind.2005). In Johnson, Celebration Fireworks, Inc., a fireworks seller, brought an action against the State Fire Marshal requesting, among other things, a permanent injunction and...