William J. Davis, Inc. v. Young

• Decision Date: 19 March 1980
• Docket Number: No. 12363.,12363.
• Citation: 412 A.2d 1187
• Parties: WILLIAM J. DAVIS, INC., Appellant, v. William YOUNG, Appellee.
• Court: D.C. Court of Appeals

412 A.2d 1187

WILLIAM J. DAVIS, INC., Appellant, v. William YOUNG, Appellee.

No. 12363.

District of Columbia Court of Appeals.

Submitted September 20, 1978.

Decided March 19, 1980.

COPYRIGHT MATERIAL OMITTED

Stephen O. Hessler, Washington, D. C., was on the brief for appellant.

Ellen M. Scully, Washington, D. C., was on the brief for appellee.

Before KERN, HARRIS and MACK, Associate Judges.

MACK, Associate Judge:

We are asked to find that the trial court erred in denying appellant's motions for partial summary judgment. Appellant corporation alleges that a portion of appellee's minimum wage claim is barred by the statute of limitations.¹ It also suggests that a claim for 1972 wages is barred, under the principle of res judicata, by an earlier determination of the Minimum Wage Board. We disagree and accordingly affirm.²

The claim arose under the District of Columbia's Minimum Wage Act of 1966.³ In January 1972, appellant William J. Davis, Inc. (Davis, Inc.) hired Mr. Young, appellee, as a janitor/resident manager for four apartment buildings. The agreed upon biweekly salary was $128.50 for 80 hours of work. After the first full pay period, Mr. Young ceased reporting the number of hours he worked. Rather, when he picked up his paycheck at appellant's main office, he signed a blank statement later filed in by Davis, Inc. for the hours worked. Upon commencement of this procedure, the payroll clerk assured him that his signature was needed only to prove he had picked up his check; that the time sheet was used only for her records; that he need not record his hours. It is uncontested that Mr. Young was to be paid by the hour. Young testified that he worked the same number of hours per pay period (80) for the entire time he was employed. Throughout his employment, he received a record (pay stub) attached to his paycheck indicating, inter alia, the number of hours included in the pay period. However, he testified that he never looked at that figure. He only checked the total amount of take-home pay to verify that it was correct — $107.46.

On June 13, 1972, the minimum wage for a janitor/resident manager increased from $1.60 to $2.25 per hour. Mr. Young's wages were not increased. Starting with the next pay period (June 18, 1972) Davis, Inc. reduced on its records and on Young's pay stub the number of hours worked from 80 to 64. Davis, Inc. further reduced appellee's hours to 57 beginning with the pay period ending August 12, 1972.⁴ Mr Young's net pay check and gross pay remained exactly the same. He was never informed that either his hours or job duties had been reduced. Nor was Mr. Young informed of the new minimum wage order. It was not posted at the site of Young's employment.⁵ Although Davis, Inc. posted a copy near the time clock at its headquarters, there is no indication that Young was ever in a position to see the order. He did not use the time clock; he only went to the office to get paid; he picked up his check from a person located in a different part of the office. In fact, he testified that he never saw the notice. The record does not indicate the date when Mr. Young first learned of the June 1972 increase in the minimum wage and the corresponding decrease in the number of hours for which he was paid.

In July 1973, Mr. Young's paycheck was increased to $133.95 gross ($110.91 net), still for 57 hours of work. This was evidently in response to the fact that Mr. Young, at 57 hours per pay period, qualified only as a part-time employee. The hourly rate for a part-time employee was $2.35.⁶ Shortly before this increase, in May 1973, the Minimum mum Wage Board, following an investigation, had determined that Davis, Inc. owed Mr. Young an additional $8.95 per pay period in minimum wages for the July — December 1972 period. In response, Davis, Inc. paid him $98.45 in August 1973. The Minimum Wage Computation Sheet indicates that the additional pay was based on 57 hours per pay period.⁷ In December 1973, Mr. Young was fired.

On September 15, 1975, Mr. Young filed suit under the Minimum Wage Act.⁸ He requested payment for the additional 23 hours per pay period he had worked and for which he had not been paid. In addition he requested liquidated damages. Shortly before trial, Davis, Inc. made the two motions for partial summary judgment at issue here. The trial judge ruled that the statute of limitations did not commence running until December of 1973 when Mr. Young was fired; that the Minimum Wage Board determination was not entitled to res judicata effect. A jury found that Mr. Young had worked 80 hours per pay period throughout his employment. It returned a verdict for $1,992.70.⁹ in unpaid wages, and liquidated damages of an equal amount. This appeal followed.

I.

The precise question posed by appellant's statute of limitations argument is whether Mr. Young's cause of action for unpaid minimum wages accrued each pay period beginning in June 1972 when the minimum wage order became effective, or instead accrued at a later time when he discovered, or should have discovered, the nonpayment.¹⁰

Under general principles developed in interpreting statutes of limitations, a cause of action for compensation accrues as soon as it is due. In cases of periodic payment, such as wages, each payment date gives rise to a new claim.¹¹ See, e. g., Friedman v. United States, 310 F.2d 381 (Ct.C1.1962); Mitchell v. Lancaster Milk Co., 185 F.Supp. 66 (M.D.Pa.1960) (interpreting the Fair Labor Standards Act after which the D.C. Act is modeled). Applying these general principles, Mr. Young would have a cause of action for each pay period, beginning in June 1972, for which he was not paid the minimum wage for the 80 hours worked. Since Mr. Young filed suit on September 15, 1975, all claims occurring prior to September 15, 1972 would be barred by the three year statute of limitations, absent some basis for exception. Namerdy v. Generalcar, D.C.App., 217 A.2d 109 (1966); Washington Loan & Trust Co. v. Darling, 21 App.D.C. 132 (1903). We find grounds for applying an exception here.

Where the basis of a cause of action is fraudulently concealed from a plaintiff, courts have created an exception to this usual rule. See, e. g., King v. Kitchen Magic, Inc., D.C.App., 391 A.2d 1184, 1186 (1978) (fraud); Weisberg v. Williams, Connolly & Califano, D.C.App., 390 A.2d 992 (1978) (legal malpractice); P. H. Sheehy Co. v. Eastern Importing & Manufacturing Co., 44 App.D.C. 107 (1915) (breach of warranty). In such a circumstance, accrual of the cause of action is suspended. The statute will not commence to run until the plaintiff discovers or has a reasonable opportunity to discover the wrong. Holmburg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946); International Ladies' Garment Workers Union v. NLRB, 150 U.S.App.D.C. 71, 463 F.2d 907 (1972); Maddox v. Andy's Refrigeration & Motor Service Co., D.C. Mun.App., 160 A.2d 799 (1960). Generally the defendant must have done something of an affirmative nature designed to prevent discovery of the cause of action. Searl v Earll, 95 U.S.App.D.C. 151, 221 F.2d 24 (1954). Although mere silence, failure to disclose, or ignorance of facts establishing a claim¹² may not ordinarily constitute fraudulent concealment for these purposes, any statement, word or act which tends to suppress the truth raises the suppression to that level. Jackson v. Combs, 18 D.C. (7 Mackey) 608 (1888). In such instances, the defendant's affirmative efforts to divert or prevent discovery of the original fraud give a continuing character to the original act which deprives it of statute of limitations protection until discovery. See note 11, supra.

The statute of limitations with which we are concerned here is part of a remedial statute enacted by Congress to protect the wage-earners at the bottom of the economic ladder. Congress concluded that [e]mployment of persons at these insufficient rates of pay threatens the health and well-being of the people of the District of Columbia and injures the overall economy." D.C. Code 1973, § 36-401(a). Patterned after the Fair Labor Standards Act (FLSA),¹³ see Williams v. W. M. A. Transit Co., 153 U.S. App.D.C. 183, 472 F.2d 1258 (1972), the D.C. Minimum Wage Act is designed to insure that these workers receive a legislatively determined minimum wage. The ordinary bargained-for employment contract has been replaced by this statutory mandate. To insure that the protected workers are informed of their rights, the Act requires employers to post the applicable minimum wage laws and regulations at places of employment. D.C.Code 1973, § 36-412, note 5 supra.

These policies of the act strongly suggest that the common law exception for fraudulent concealment be applied, to effect its remedial purposes.¹⁴ We find reliable authority for this proposition in caselaw interpreting other federal statutes of limitations. "Read into every federal statute of limitations, . . . is the equitable doctrine that in case of defendant's fraud or deliberate concealment of material facts relating to his wrongdoing, time does not begin to run until plaintiff discovers, or by reasonable diligence could have discovered, the basis of the lawsuit." Fitzgerald v. Seamans, 180 U.S.App.D.C. 75, 83, 553 F.2d 220, 228 (1977) citing Holmberg v. Armbrecht, supra.

In our view § 36-416 must be read in light of the equitable doctrine described in Fitzgerald v. Seamans, supra. It would be anomalous indeed to interpret the Minimum Wage Act, which relies so heavily for effective enforcement on employer notification of its requirements, as absolving from liability those employers who fail to do so and who underpay their employees for more than three years. We hold that, where as here there are affirmative facts raising the spectre of an employer's fraudulent concealment, the three-year statutory period of limitations for bringing an action for unpaid minimum wages begins to run when an employee discovers, or...