Walczak v. Labor Works–Fort Wayne LLC

• Decision Date: 13 March 2013
• Docket Number: No. 02S04–1208–PL–497.,02S04–1208–PL–497.
• Parties: Brandy L. WALCZAK, Individually and on Behalf of Those Similarly Situated, Appellant (Plaintiff below), v. LABOR WORKS–FORT WAYNE LLC, d/b/a Labor Works, Appellee (Defendant below).
• Court: Indiana Supreme Court

983 N.E.2d 1146

Brandy L. WALCZAK, Individually and on Behalf of Those Similarly Situated, Appellant (Plaintiff below),

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

No. 02S04–1208–PL–497.

Supreme Court of Indiana.

March 13, 2013.

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

Gregory F. Zoeller, Attorney General of Indiana, Thomas M. Fisher, Solicitor General of Indiana, Heather Hagan McVeigh, Deputy Attorney General, Indianapolis, IN, Rick J. Ruble, Deputy Commissioner of Labor & General Counsel, Indianapolis, IN, Attorneys for Amicus Curiae the State of Indiana.

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

On Petition to Transfer from the Indiana Court of Appeals, No. 02A04–1109–PL–509

MASSA, Justice.

James Whitcomb Riley (1849–1916), our celebrated “Hoosier Poet,” is widely credited with the origination of the Duck Test; as he expressed it, “[w]hen I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck.” ¹ Brandy Walczak successfully applied for employment at Labor Works, received job assignments and paychecks, and was never fired or laid off. Nevertheless, when she filed a class action lawsuit against Labor Works under the Indiana Wage Payment Act, Labor Works argued that day laborers like Walczak are involuntarily separated from the payroll at the end of every shift and thus required to proceed under the Wage Claims Act. Because we conclude Walczak had a reasonable expectation of continuing to receive job assignments from Labor Works on the day she filed her claim—in short, that Walczak passes the Duck Test—we hold she was not separated from the payroll for the purpose of the Wage Claims Act and may proceed with her claim as she filed it, under the Wage Payment Act.

Facts and Procedural History

A. Statutory Background

In 1933, the Indiana General Assembly enacted the Wage Payment Act, which required all Indiana employers to “pay each employee ... at least twice each month ... all wages earned to a date not more than ten days prior to the date of such payment.” 1933 Ind. Acts ch. 47, § 1. The statute applied to current employees as well as to employees who, either “permanently or temporarily,” “voluntarily leave [their] employment.” Id. Violations of the statute were punishable by liquidated damages, and employees who brought lawsuits to vindicate their claims could recover attorney's fees. Id. at § 2. Although it has been subject to minor amendments, the Wage Payment Act exists in substantially this same form today. SeeInd.Code § 22–2–5–1 et seq. (2007). ²

Six years later, the General Assembly created a similar remedy for employees who had been “separate[d] ... from the pay roll” or whose work had been “suspen[ded] ... as the result of an industrial dispute.” 1939 Ind. Acts ch. 95, § 2. The Wage Claims Act required all Indiana employers to remit all unpaid wages to the former employee “within twenty-four hours of the time of separation,” or, “[i]n the event of the suspension of work, as the result of an industrial dispute,” “at the next regular pay day.” Id. Unlike the Wage Payment Act, however, the Wage Claims Act did not create a private right of action; rather, it created an administrative process. It imposed a duty upon the Commissioner of the Department of Labor “to enforce and to insure compliance with the provisions of this act, to investigate any violations of any of the provisions of this act, and to institute or cause to be instituted actions for penalties and forfeitures provided hereunder.” Id. at § 4. It also “authorized” the Commissioner “to take assignments of wage claims of less than one hundred dollars” and empowered him “to prosecute actions for the collection of such claims of persons ... who, in his judgment, have claims which are valid and enforceable in the courts.” Id. at § 5. Like the Wage Payment Act, the Wage Claims Act has been amended several times since its enactment, but these amendments have been largely cosmetic. SeeInd.Code § 22–2–9–1 et seq. (2007).³

So to summarize in shorthand, it fairly can be said that the Wage Payment Act applies to, among others, those who keep or quit their jobs, while the Wage Claims Act applies to those who are fired, laid off, or on strike. J Squared, Inc. v. Herndon, 822 N.E.2d 633, 640 n. 4 (Ind.Ct.App.2005).

B. Labor Works and Brandy Walczak's Claim

Labor Works is a day labor service that maintains an office in Fort Wayne, Indiana. Its day labor employees are not required to report to work on any regular schedule. Rather, they receive job assignments on a day-to-day basis by coming into the Labor Works office and signing up to work. Assignments are not guaranteed, and if there is not enough available work, an employee may not receive an assignment even if she signed up for one.

Labor Works hired Brandy Walczak to work as a day labor employee on December 20, 2009. Walczak worked on various jobs as she was assigned to them, including packaging at a potato chip factory and general labor at a refractory contractor, a hospital laundry, and a hotel. She was paid by check at the end of each work day. Labor Works took deductions from Walczak's gross pay for taxes, Social Security and Medicare, and any transportation and equipment that she used. Walczak worked on January 27, 2010, but did not sign up for work on January 28. On January 29, she signed up but did not receive a job assignment. Walczak did not work another job for Labor Works until February 2, when she signed up and received a job assignment. She continued periodically to accept job assignments from Labor Works until early March 2010.

Meanwhile, on February 1, 2010—a day when she neither sought nor obtained a work assignment—Walczak filed a class action lawsuit under the Wage Payment Act against Labor Works seeking to recover unpaid wages. About nine months later, Labor Works moved for summary judgment, arguing Walczak's claim properly arose under the Wage Claims Act because she was “separated from the pay-roll” within the meaning of Indiana Code § 22–2–9–2 at the time her complaint was filed. Thus, Labor Works contended, the trial court lacked jurisdiction to hear her claim; rather, she was required first to submit it to the Department of Labor. Walczak demurred, arguing the Wage Claims Act did not apply to her because she was never “fired.”

Labor Works submitted several affidavits in support of its motion. One, executed by Fort Wayne Branch Manager Carolyn Burton, describes the Labor Works employment and job assignment process in pertinent part as follows:

When a person who signs in for work is hired, he/she is hired to work for that day only. If the person seeking work with Labor Works comes back the next day seeking to be hired, that person may be hired to work doing the same or a different job, the person may be hired to work at a different client site altogether, or the person may not be hired at all depending on numerous factors, including without limitation the number of persons signing up for work at the Labor Works office, the number and type of assignments available that day, the requirements of the job (e.g. some jobs require certain skills or experience), and how the person performed on earlier assignments, to name some factors.

App. at 172. Nine other Labor Works employees executed affidavits reiterating Ms. Burton's description of the employment relationship:

At the end of each day I work, I am paid by Labor Works for that day's services. If I want to return the next day, I again have to go through the sign-up process and there is no guarantee that I will receive an assignment ... At the end of each work day, I know I no longer have a job and I know I have no obligation to show up for work the next day. I understand my employment is for one day and that is it.App. at 186–203. In response, Walczak submitted excerpts from Ms. Burton's deposition and various Labor Works employment documents, including a “Temporary Employee Application” ⁴ App. at 114. On the application, Labor Works refers to itself as “Employer” and includes a “Certification and Agreement” that provides in pertinent part:

I understand that if I become an employee of Employer's, only I, or Employer can terminate my employment. When my assignment ends, I must report to my Employer's office for my next job assignment. Failure to accept my next job assignment will indicate that I have refused available work. Failure to report to Employer's office and sign in early on the next working day following last completed job assignment, may affect my rights to any future unemployment claims.

App. at 123. On a document entitled “Employer Work Rules,” Labor Works warns employees that if they leave a job assignment early, “[their] services may no longer be needed.” App. at 126. Ms. Burton testified that in order to be eligible to go out on an assignment, Labor Works employees must pass a breath alcohol test, and an employee who fails the test three days in a row “would not be eligible to accept assignments.” App. at 117.

The trial court agreed with Labor Works and granted its motion. Walczak appealed, and the Court of Appeals reversed. Walczak v. Labor Works–Fort Wayne, LLC, 966 N.E.2d 642, 643 (Ind.Ct.App.2012). Citing Johnson v. Celebration Fireworks, Inc., 829 N.E.2d 979 (Ind.2005), the court held that “[t]he determination of whether, when she filed her complaint in the instant action, Walczak was separated from the payroll by Labor Works within the meaning of the Wage Claims [Act] is a question of fact.” Walczak, 966 N.E.2d at 647. That question, the court said, “is precisely the type of fact-sensitive inquiry that should be resolved in the first instance by the administrative agency”—meaning, in this case, the Department of Labor. Id. at 647. Accordingly, it remanded the case to the trial court “with instructions to dismiss...