Opinion
No. C00-131 MJM
August 8, 2001
ORDER
Pending before this Court is Plaintiff's Motion to Alter and Amend this Court's order of July 18, 2001. (Doc. no. 36). For the reasons that follow, Plaintiff's motion is denied.
This case is premised on a claim for benefits pursuant to the Iowa Wage Payment Collection Law, Chapter 91A of the Iowa Code. On July 18th, the Court entered an Opinion and Order, granting in part and denying in part Defendant's Motion for Summary Judgment. Pursuant to that Order, the only issue remaining for the jury is whether Plaintiff is entitled to prorated vacation pay benefits for 1999. In Plaintiff's present motion, he contends he is entitled to liquidated damages for Defendant's failure to pay those benefits.
Plaintiff's claim is premised on Iowa Code section 91A.8 (2001) which provides in relevant part:
When it has been shown that an employer has intentionally failed to pay an employee wages or reimburse expenses pursuant to section 91A.3, whether as the result of a wage dispute or otherwise, the employer shall be liable to the employee for any wages or expenses that are so intentionally failed to be paid or reimbursed, plus liquidated damages, court costs and any attorney's fees incurred in recovering the unpaid wages and determined to have been usual and necessary. In other instances the employer shall be liable only for unpaid wages or expenses, court costs and usual and necessary attorney's fees incurred in recovering the unpaid wages or expenses.
Iowa Code § 91A.8; see also Iowa Code § 91A.2(6) (defining "liquidated damages"). Section 91A.3, cited above, generally requires that an employer "pay all wages due its employees . . . at least in monthly, semimonthly, or biweekly installments. . . ."
The prorated vacation benefits sought by Plaintiff do not appear to be "wages due" as that term is used in section 91A.3 of the Code, because they are not intended to be paid "in monthly, semimonthly, or biweekly installments. . . ." See, e.g., Dallenbach v. Mapco Gas Products, Inc., 459 N.W.2d 483, 489 (Iowa 1990) (holding annual bonus fell "under the `other instances' language of the second sentence of section 91A.8."). Rather, an employee's vacation benefits are based on accrued vacation time, and it is only after a certain amount of vacation time has accrued and that vacation time is not used by the employee, that the employee is entitled to those vacation benefits. As the annual bonus payment sought in Dallenbach, prorated vacation benefits would fall under the "other instances" language of section 91A.8 of the Code. 459 N.W.2d at 489. Liquidated damages are not warranted in such a case. Id.
In addition, Defendant's failure to pay the prorated vacation benefits appear to be based on a good faith belief that the benefits were not in fact due, thus precluding the award of liquidated damages. The Iowa Supreme Court has held that "liquidated damages are directed at employers who fail to pay wages knowing the wages are due." Condon Auto Sales Service, Inc. v. Crick, 604 N.W.2d 587, 598 (Iowa 1999) (citing Halverson v. Lincoln Commodities, Inc., 297 N.W.2d 518, 523 (Iowa 1980) (finding intent not to pay wages where there was evidence that employee admitted responsibility for the bad debt)). This does not include those employers who "maintai[n] a good faith dispute over the amount of wages." Condon, 604 N.W.2d at 598. Likewise, "the intentional failure to pay wages excludes the inadvertent failure to pay." Id. (citing Miller v. Component Homes, Inc., 356 N.W.2d 213, 216 (Iowa 1984)). Defendant has continuously disputed it owes Plaintiff vacation benefits, prorated or otherwise. Moreover, Plaintiff has offered no evidence to support a jury finding that Defendant withheld these vacation benefits in bad faith. The evidence simply does not support a finding that Defendant's failure to pay prorated vacation benefits constitutes the intentional failure to pay within in the meaning of the statute.
The Court notes that Plaintiff cites Miller for the proposition that a letter from an employee demanding unpaid benefits, and refusal by the employer to do so, is proof enough that the employer intentionally failed to pay benefits. 356 N.W.2d at 216. The Miller court's analysis is inapposite. In Miller the court was faced with an evidentiary issue — whether a letter offering settlement from an employer should be admitted despite the well-established principle that proof of an offer of compromise is inadmissible to show admission of liability. Id. at 215-16. The court admitted the letters, in part, because of their probative value aside from establishing admission of liability; that is, the court found the letters could be offered to show the employer's failure to pay benefits was intentional. Id. The court did not hold that the letters were in and of themselves sufficient to prove intent; but rather the letters tended to show the employer had not inadvertently failed to pay. Id.
In the instant case, there is no dispute over whether Defendant inadvertently failed to pay benefits. The evidence is clear that the Defendant has consistently maintained Plaintiff is not entitled to vacation benefits under its policy. However, the Court, in its Order and Opinion on Defendant's summary judgment, found there was a fact dispute about one portion of the vacation policy concerning prorated vacation benefits. Plaintiff's letters requesting payment of these benefits does not turn an otherwise good faith held belief that no benefits are due into an intentional failure to pay worthy of liquidated damages under the statute.
For these reasons, and those stated in the Court's original order, Plaintiff is not entitled to liquidated damages on that claim.
ORDER
Plaintiff's Motion to Alter and Amend Judgment is DENIED. (Doc. no. 38).