Opinion
NUMBER 2012 CA 1877
07-30-2013
ATKINS WILLIAMS v. CITY OF ST. GABRIEL
Murphy F. Bell, Jr. Baton Rouge, LA Attorney for Appellee Plaintiff - Atkins Williams L. Phillip Canova, Jr. Plaquemine, LA Attorney for Appellant Defendant - City of St. Gabriel
NOT DESIGNATED FOR PUBLICATION
Appealed from the
18th Judicial District Court
In and for the Parish of Iberville, Louisiana
Trial Court Number 71,338 Div. A
Honorable James J. Best, Judge
Murphy F. Bell, Jr.
Baton Rouge, LA
Attorney for Appellee
Plaintiff - Atkins Williams
L. Phillip Canova, Jr.
Plaquemine, LA
Attorney for Appellant
Defendant - City of St. Gabriel
BEFORE: PARRO, WELCH, AND DRAKE, JJ.
WELCH , J.
The City of St. Gabriel ("City") appeals a judgment in favor of its former employee, Atkins Williams, which awarded him unpaid wages for accrued but unused vacation (annual) leave and compensatory time, penalty wages, and attorney fees. Finding no error in the judgment of the trial court, we affirm.
FACTUAL AND PROCEDURAL HISTORY
Mr. Williams was previously employed by the City as the Director of Public Works under the City's former mayor, George Grace. On June 28, 2011, just prior to Mayor Grace's leaving office, Mr. Williams wrote Mayor Grace a letter requesting that his accrued vacation leave of 316 hours, his accrued compensatory time of 142 hours, and his accrued sick leave of 749.67 hours be rolled over to the next fiscal year. Mr. Williams' stated reason for requesting the rollover was "because of [his] position as Director of Public Works, [he] was unable to take [leave] due to the demand of [his] workload and work schedule." On June 30, 2011, Mayor Grace approved Mr. Williams' request to rollover Mr. Williams' accrued vacation, compensatory time, and sick leave.
Although Mr. Williams requested to rollover 749.67 hours of accrued sick leave, the letter signed by Mayor Grace lists Mr. Williams accrued sick leave as 763.43 hours as of June 30, 2011.
On July 1, 2011, Lionel Johnson, Jr. took office as mayor of the City, and on November 4, 2011, Mr. Williams was terminated from his employment with the City. Thereafter, on February 28, 2012, Mr. Williams commenced these proceedings seeking unpaid wages (benefits), penalty wages, and attorney fees from the City. In Mr. Williams' petition, he alleged that when he was terminated from his employment with the City in November 2011 and issued his last paycheck, he was not paid his accrued benefits (i.e., his vacation and compensatory time), to which he was entitled under Louisiana law and the City's personnel policy manual. Mr. Williams further alleged that on December 6, 2011, and on February 3, 2012, through counsel, he sent a letter to the City requesting the payment of his accrued benefits, but to date, had not been paid for those benefits.
The City filed an answer, essentially denying the allegations of Mr. Williams' petition and further asserting that Mr. Williams was paid all of the benefits accrued by him on November 5, 2011, by two checks. Specifically, the City claimed that Mr. Williams was paid $1,730.40 for 80 hours of administrative leave for the period of October 17, 2011, through October 30, 2011, and that he was paid $865.20 for 40 hours of administrative leave for the period of October 31, 2011, through November 4, 2011, which was the date that Mr. Williams was terminated. The City also asserted that Mr. Williams did not have any accrued vacation leave on the last day of his employment and that its personnel policy manual did not allow the accrual of unused vacation leave after the end of the fiscal year, which is July 1 through June 30, and that sick leave was forfeited at the time of retirement, resignation, or termination of employment.
Following a bench trial, the court rendered judgment in favor of Mr. Williams and against the City, awarding Mr. Williams the sum of $8,690.00 for his accrued but unused vacation leave, $5,857.50 for his accrued but unused compensatory time, $19,800 in penalty wages, and $8,586.88 in attorney fees. A judgment in conformity with the trial court's ruling was signed on July 12, 2012, and it is from this judgment that the City appeals.
On appeal, the City contends that the trial court erred in rendering judgment on the issue of unpaid wages, because Mr. Williams did not prove that the City owed him accrued vacation and compensatory time. The City also contends that it proved that there was a bona fide dispute over the amount of accrued vacation leave and compensatory time due to Mr. Williams, and thus the trial court erred in awarding penalties to Mr. Williams under La. R.S. 23:631 and 23:632. Lastly, the City contends that if the trial court's award of penalties is reversed, the award of attorney fees should be amended and reduced.
LAW AND DISCUSSION
A. Unpaid Wages
Louisiana Revised Statutes 23:631 provides, in pertinent part, as follows:
A. (1)(a) Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first.
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(2) Payment shall be made at the place and in the manner which has been customary during the employment, except that payment may be made via United States mail to the laborer or other employee, provided postage has been prepaid and the envelope properly addressed with the employee's or laborer's current address as shown in the employer's records. In the event payment is made by mail the employer shall be deemed to have made such payment when it is mailed. The timeliness of the mailing may be shown by an official United States postmark or other official documentation from the United States Postal Service.
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B. In the event of a dispute as to the amount due under this Section, the employer shall pay the undisputed portion of the amount due as provided for in Subsection A of this Section. The employee shall have the right to file an action to enforce such a wage claim and proceed pursuant to Code of Civil Procedure Article 2592.
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D. (1) For purposes of this Section, vacation pay will be considered an amount then due only if, in accordance with the stated vacation policy of the person employing such laborer or other employee, both of the following apply:
(a) The laborer or other employee is deemed eligible for and has accrued the right to take vacation time with pay.
(b) The laborer or other employee has not taken or been compensated for the vacation time as of the date of the discharge or resignation.
(2) The provisions of this Subsection shall not be interpreted to allow the forfeiture of any vacation pay actually earned by an employee pursuant to the employer's policy.
Thus, upon Mr. Williams' termination, the City was required under La. R.S. 23:631(A)(1)(a) to pay Mr. Williams "the amount then due under the terms of employment." Pursuant to La. R.S. 23:631(D), Mr. Williams' vacation leave was "an amount then due" to him if, according to the City's stated vacation policy, he was eligible for and had accrued the right to take vacation leave with pay and if Mr. Williams had not taken or been compensated for the vacation time as of the date of his termination. Furthermore, in the absence of a clear, written policy establishing that vacation time granted by an employer to an employee is nothing more than a mere gratuity and not to be considered an amount due or a wage, accrued but unused vacation time is a vested right for which an employee must be compensated or paid upon discharge or resignation. Picard v. Vermillion Parish School Board, 98-1933 (La. App. 3rd Cir. 6/23/99), 742 So.2d 589, 595-96, writ denied, 99-2197 (La. 11/19/99), 749 So.2d 675; Chapman v. Ebeling, 41,710 (La. App. 2nd Cir. 12/13/06), 945 So.2d 222, 226.
With regard to compensatory time, it is well settled that paid compensatory time or leave is a form of deferred compensation in lieu of wages, and when an employer promises a benefit to employees and employees accept by their actions in meeting the conditions, the result is not a mere gratuity but a vested right in the employee to the promised benefit. LeDoux v. City of Baton Rouge/Parish of East Baton Rouge, 99-2061 (La. 2/29/00), 755 So.2d 877, 879. See also Knecht v. Bd. of Trustees for State Colleges and Univ., 591 So.2d 690, 695 (La. 1991). Furthermore, an employer cannot require an employee to forfeit wages upon resignation; once benefits have vested, company policy cannot deprive the employee of the right to these benefits. Beard v. Summit Institute of Pulmonary Medicine and Rehabilitation, Inc., 97-1784 (La. 3/4/98), 707 So.2d 1233, 1236.
According to the record, the City's employee personnel policy provides, in pertinent part, as follows:
SECTION 4.5 OVERTIME AND COMPENSATORY TIME
Employees will be paid overtime or will receive compensatory time (K-time) for work performed in excess of forty (40) hours per work week.
Overtime or compensatory time will be paid for work in excess of forty hours when holidays are involved. ... Overtime and compensatory time will be calculated at the rate of one and one-half times the employee's regular earnings.
Overtime other than that listed above may be required in emergencies or with the approval of the department head and/or Mayor. All employees must complete a Request to Work Overtime or Work for Compensatory Time sheet, which must be signed by the department head and the Mayor, in order to be compensated for his/her time.
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SECTION 5.2 VACATION
Vacation leave (ordinary annual leave) is a benefit which may be earned, accumulated and used by City employees. The sole purpose of vacation leave is to grant employees time off with pay. All vacation leave for City employees must be approved and scheduled with the employee's supervisor. All vacation leave for supervisory personnel must be cleared and scheduled with the Mayor.
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It will be necessary to schedule all vacation leave according to the employee's work schedule.
All vacation leave requested will be in compliance with the following regulations:
a. There will be no carry over from one fiscal year to another, unless employee's scheduled leave is canceled by the Mayor due to the need of the City.
b. Department heads must approve requests from members of their department.
c. Time will be counted and scheduled according to the fiscal year to capture expenditures of annual leave in the budget. Also, in the event that an employee's leave is canceled by the Mayor due to the need of the City, those funds can be identified and carried over into the next accounting period.
According to Mr. Williams' testimony, he was employed with the City as the Director of Public Works and a building official and earned approximately $27.50 per hour. Mr. Williams stated that he had been employed with the City for eight years and accumulated 120 hours of vacation leave per year. Mr. Williams testified that each employee's vacation time was received on July 1 of each year, the beginning of the fiscal year, and generally, if the employee was not able to use his leave by the end of that fiscal year, it would roll over to the next fiscal year. Mr. Williams further testified that as a department head, he was not always allowed to take his vacation leave on a regular basis (like other employees did) because he had to be at work due to his involvement with special projects. Mr. Williams also stated that when they were working on a project and working more than forty hours a week, instead of receiving overtime, he received compensatory time, which was calculated at time and a half. Since Mr. Williams was unable to take either his full vacation time or his compensatory time during the fiscal year, that time would roll over every year upon approval by the mayor. Mr. Williams testified that his pay checks were deposited directly into the bank, and that he received check stubs, which indicated the leave time (vacation, compensatory, and sick) that he had accumulated.
Mr. Williams testified that at the end of June 2011, he requested that his accumulated vacation leave, compensatory time, and sick leave be rolled over, because he had not been allowed to take his vacation leave or compensatory time, and he had not used his sick time, because he was rarely sick. Following this request, Mayor Grace approved the rollover of 316 hours of vacation time, 142 hours of compensatory time, and 764.43 hours of sick time, which coincided with the leave time detailed on Mr. Williams' pay check stubs. Mr. Williams admitted that when his employment with the City was terminated on November 4, 2011, he lost his accrued sick leave. However, he claimed that he was entitled to be paid for the 316 hours of vacation leave and 142 hours of compensatory time that he had accumulated but not used.
Carl Michael Schexnayder, the City's expert in governmental accounting, testified that he had reviewed the personnel policy manual, and that he could not find, in the personnel records provided to him, where Mr. Williams' compensatory time had been approved by the mayor or where Mr. Williams' vacation leave had been canceled by the mayor. Thus, Mr. Schexnayder concluded that, based on the personnel policy manual, the City lacked proper documentation to support the rollover of Mr. Williams' accrued vacation and compensatory time, and it would not be "good practices" to pay Mr. Williams for that accrued time. Notably, however, Mr. Schexnayder admitted that payroll for the City had been outsourced to another accounting firm, and that with all of the renovations and changes at City Hall, not all of the records were available to him, because the many personnel records had been boxed and could not be located. Additionally, Mr. Schexnayder confirmed that the hours of vacation and compensatory time sought by Mr. Williams was consistent with the City's internal payroll record system, and that the City had never received a negative audit finding regarding their accounting practices.
Following this testimony, the trial court found as follows:
I think the administration, for whom [Mr. Williams] worked under, prior to Mayor Johnson, allowed for poor practices to exist. ... Mr. Williams has convinced me by a preponderance of the evidence. I think he testified truthfully. I think he's got sufficient enough documentation to suggest that these—the interpretation by Mayor Grace and his administration allowed a deviation from best practices.
The policy itself lends itself to interpretation. There was a document signed by Mayor Grace acknowledging that he'd allow a rollover, and even if the policy is not followed the way one might interpret it, if the mayor, and his administration allowed it to happen, when an employee works, he's entitled to get paid.
This was probably, at best, just poor administrative work on the compensation with employees. But, it's not the worker's fault ... if you're entitled to [get] vacation ... you've got to get paid. ... It's the administration's fault that they allowed it to not be acknowledged in writing every month, maybe they let it slide, maybe their
interpretation was not exactly as the policy, but I find that the policy can be just ripped apart.
The policies can be subject to interpretation written with - a year later, two years later, the mayor signs his name approving this. It's in writing. If it's not in writing, it's not his fault. Somebody just didn't do it.
I find that he has the documents that showed what he was entitled to. He didn't generate that. That was generated by paperwork that came from the [City]. He's proven his case.
Based on our review of the record, we find the trial court's factual findings are reasonably supported by the record and are not clearly wrong. Under the City's personnel policy, Mr. Williams was eligible for and had accrued the right to 316 hours of vacation leave and 142 hours of compensatory leave that he had not taken, and for which he had not been compensated as of the date he was discharged. Additionally, the record reflects that Mr. Williams was not able to take his leave because of the needs of the City and therefore, his accumulated leave was rolled over with the approval of the mayor. Accordingly, upon Mr. Williams' termination, the City was required to compensate him for his 316 hours of unused vacation leave and 142 hours of unused compensatory time as an "amount then due under the terms of employment" or a wage for which Mr. Williams should have been paid under La. R.S. 23:631. Since the City failed to do this, we find no manifest error in the trial court's judgment awarding Mr. Williams unpaid wages in the amount of $8,690.00, representing Mr. Williams accrued but unused vacation leave at the rate of $27.50 per hour, and $5,857.50, representing his accrued but unused compensatory time at the rate of $41.25 per hour.
316 hours of accrued vacation leave x $27.50 per hour = $8,690.
142 hours of compensatory time x ($27.50 x 1.5(time and a half))=$5,857.50.
On appeal, the City only challenged the fact that unpaid wages were awarded; it did not challenge the actual amount of unpaid wages awarded.
B. Penalty Wages
Having found no manifest error in the trial court's determination that Mr. Williams was entitled to compensation for his accrued but unused vacation and compensatory time and that the City failed to pay the amount due in accordance with La. R.S. 23:631, we must next determine whether the trial court erred in awarding penalty wages to Mr. Williams for the City's violation of La. R.S. 23:631.
Louisiana Revised Statutes 23:632 provides, in pertinent part:
Any employer who fails or refuses to comply with the provisions of [La.] R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages.To recover penalty wages under La. R.S. 23:632, a claimant must show that: (1) wages were due and owing; (2) demand for payment was made where the employee was customarily paid; and (3) the employer did not pay upon demand. Becht v. Morgan Bldg. & Spas, Inc., 2002-2047 (La. 4/23/03), 843 So.2d 1109, 1112, cert. denied, 540 U.S. 878, 124 S.Ct. 289, 157 L.Ed.2d 142 (2003). Although equitable defenses are not expressly provided for in La. R.S. 23:632, our supreme court has interpreted the statute as a "coercive means" to compel an employer to pay an employee within the time limits set forth in La. R.S. 23:631. Beard, 707 So.2d at 1236. Accordingly, the supreme court has held that the penalty provisions set forth in La. R.S. 23:632 "must be strictly construed and may yield to equitable defenses." Id. If there is "a good-faith non-arbitrary defense to liability for unpaid wages, i.e., a reasonable basis for resisting liability," the court may refrain from imposing penalty wages upon the employer. Id.
A trial court's determination with regard to whether a plaintiff is entitled to penalty wages under La. R.S. 23:632 is a factual finding, which cannot be reversed on appeal in the absence of manifest error. See Loup v. Louisiana State School for the Deaf, 98-0329 (La. App. 1st Cir 2/19/99), 729 So.2d 689, 693. Based on our review of the record, we find no manifest error in the trial court's determination that, pursuant to La. R.S. 23:632, Mr. Williams was entitled to penalty wages. As previously set forth, Mr. Williams' accrued but unused vacation and compensatory time was an "amount then due under the terms of employment" under La. R.S. 23:631 or a "wage," which was due and owing to him from the City. By letters dated December 6, 2011, and February 3, 2012, Mr. Williams made written demand to the mayor of the City at the mayor of the City's address, and the City refused to pay upon demand. Accordingly, the burden shifted to the City to prove that it had a good-faith, non-arbitrary defense to liability for unpaid wages or some other reasonable basis to excuse it from the imposition of penalty wages.
The City argues that its refusal to pay Mr. Williams for his unused vacation and compensatory time was in good faith and reasonable, based on the testimony of its expert in governmental accounting, Mr. Schexnayder. However, Mr. Schexnayder confirmed that the hours of vacation and compensatory time sought by Mr. Williams were consistent with the City's internal payroll record system. Additionally, Mr. Schexnayder's opinion that it would not be "good practices" to pay Mr. Williams for his accrued vacation leave and compensatory time was based on a purported lack of documentation or records to support the rollover, but he admitted that not all of the records were available, because they could not be located. Lastly, it is apparent from Mr. Schexnayder's testimony that he did not commence his investigation into Mr. Williams' payroll records until after this dispute arose, and well after the time limits prescribed by La. R.S. 23:631 for an employer to pay an employee the amount due under the terms of employment.
Accordingly, the trial court's apparent conclusion that the City did not have a good faith, non-arbitrary defense to liability for unpaid wages is reasonably supported by the record and is not clearly wrong. Thus, we find no manifest error in the trial court's determination that penalty wages were warranted, and the trial court's award of penalty wages in accordance with La. R.S. 23:632 in the amount of $19,800.00, representing 90 days wages at the daily rate of $220.00, is affirmed.
$27.50 per hour x 8 hours per day = $220 per day.
On appeal, the City only challenged the fact that penalty wages were awarded; it did not challenge the actual amount of penalty wages awarded.
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C. Attorney Fees
In addition to providing for penalties, La. R.S. 23:632 further provides that "[r]easonable attorney fees shall be allowed the laborer or employee by the court[,] which shall be taxed as costs to be paid by the employer, in the event a well-founded suit for any unpaid wages whatsoever be filed." Under La. R.S. 23:632, the award of reasonable attorney fees is mandatory when an employee brings a "well-founded" suit for unpaid wages, irrespective of any equitable defenses that may be raised by the employer. Loup, 729 So.2d at 693. Suits in which the recovery of wages is granted are considered "well-founded." Id.
In this case, Mr. Williams presented a well-founded suit for unpaid wages in accordance with La. R.S. 23:631 and received a judgment in his favor from the trial court. He is, therefore, entitled to attorney fees. The trial court awarded attorney fees to Mr. Williams in the amount of $8,586.88, which was 25% of the total wages recovered by him. The City's only complaint on appeal with regard to that award is that it should be reduced if the award of penalty wages were reversed. However, as we have found no error in the trial court's determination that penalty wages should be imposed, we find no merit to the City's complaint in this regard. In light of the policy behind La. R.S. 23:632, which is to encourage workers to assert their rights to unpaid wages and to motivate attorneys to prosecute those suits to insure that the working people of this state will not be deprived of their earnings, see Beard, 707 So.2d at 1238, we find the trial court's award of attorney fees in the amount of $8,586.88 to be both reasonable and warranted.
CONCLUSION
For the above and foregoing reasons, the July 12, 2012 judgment of the trial court is affirmed. All costs of this appeal in the amount of $551.31 are assessed to the defendant/appellant, City of St. Gabriel.
AFFIRMED.