Gary G. Geffert
David H. Webb
Bruce N. Goldstein Keyser, West Virginia
Mountain State Justice, Inc. Attorney for Grapevine Corporation
Attorneys for Appellants
Douglas & Jenkinson
Martinsburg, West Virginia
John M. Simpson Fulbright & Jaworski
Washington, D. C.
Attorneys for Douglas Dirting, John
W. Cushwa, David Cushwa, Blue Ridge
View Orchard Co., Inc., William Kilmer,
Lloyd Lutman, the Estate of L. Randolph
Huyett, Marvin Mck. Ellis, Gary Lutman
and Russell Pitzer
Patrick G. Henry, III, PLLC
Martinsburg, West Virginia
Attorney for Cumberland Valley Orchard,
Inc., Bruce E. Eyler, and Phillip Eyler
Stephen R. Fielder,
Bunker Hill, West Virginia
Attorney for Beallair Orchards, Inc., A.
Elwood Butler, B. Bruce Butler, John
Porterfield, Porterfield Orchards, Inc.,
Mary Frances Hockman, and Twin Ridge Orchard Co., Inc.
Richard G. Gay
Berkeley Spring, West Virginia
Attorney for Henry Davenport, Charles O.
Leavitt, Dorothy Leavitt, Del Orchard, Inc.,
Manis H. Perkins, Jr. pro se
Louis B. Athey, pro se
JUDGE ROBERT B. STONE,
sitting by special assignment
, delivered the Opinion of the
JUSTICE SCOTT did not participate in the decision of the Court.
1. The standard of review applicable to an appeal from a motion to alter or
amend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that would
apply to the underlying judgment upon which the motion is based and from which the appeal
to this Court is filed. Syl. Pt. 1, Wickland v. American Travellers Life Ins. Co., 204 W.Va.
430, 513 S.E.2d 657 (1998).
2. For issue or claim preclusion to attach to quasi-judicial determinations of administrative agencies, at least where there is no statutory authority directing otherwise, the prior decision must be rendered pursuant to the agency's adjudicatory authority and the procedures employed by the agency must be substantially similar to those used in a court. In addition, the identicality of the issues litigated is a key component to application of administrative res judicata or collateral estoppel. Syl. Pt. 2, Vest v. Board of Education, 193 W.Va. 222, 455 S.E.2d 781 (1995) .
3. Before the prosecution of a lawsuit may be barred on the basis of res judicata, three elements must be satisfied. First, there must have been a final adjudication on the merits in the prior action by a court having jurisdiction of the proceedings. Second, the two actions must involve either the same parties or persons in privity with those same parties. Third, the cause of action identified for resolution in the subsequent proceeding either must be identical to the cause of action determined in the prior action or must be such that it could have been resolved, had it been presented, in the prior action. Syl. Pt. 4, Blake v. Charleston Area Med. Ctr., Inc., 201 W.Va. 469, 498 S.E.2d 41 (1997) .
4. Payments made to migrant workers pursuant to provisions required by
federal law which mandate that an employer/grower must guarantee work for three-fourths
of the contractual period or make payments in lieu of providing such work opportunity do
not constitute wages as defined by the West Virginia Wage Payment and Collection Act,
West Virginia Code §§ 21-5-1 to -18 (1996 & Supp. 1999).
5. [A] circuit court's order granting summary judgment must set out factual
findings sufficient to permit meaningful appellate review. Findings of fact, by necessity,
include those facts which the circuit court finds relevant, determinative of the issues and
undisputed. Syl. Pt. 3, in part, Fayette County Nat'l Bank v. Lilly, 199 W.Va. 349, 484
S.E.2d 232 (1997).
6. The West Virginia Wage Payment and Collection Act, W.Va. Code 21-5-1 , et seq. is applicable to any firm that suffers or permits a person to work; therefore, when foreign agricultural workers are recruited by a corporation whose only activity is the hiring, transporting, feeding, housing and payment of workers who perform all their services for individual growers, the individual growers are joint employers of the workers for the purposes of the West Virginia Wage Payment and Collection Act. Syl. Pt. 1, Rowe v. Grapevine Corp., 193 W.Va. 274, 456 S.E.2d 1 (1995).
This consolidated appealSee footnote 1
involves the dismissal through summary judgment
of claims brought by thirty-seven migrant farm workers under the West Virginia Wage
Payment and Collection Act (Act), West Virginia Code §§ 21-5-1 to -18 (1996 & Supp.
1999). By order dated December 30, 1998, the Circuit Court of Berkeley County determined
that the Plaintiffs' claims, which covered the period of 1983-1987, were barred under
principles of res judicata since those claims had previously been dismissed in an
administrative proceeding before the United States Department of Labor (Department of
Labor). With regard to the claims for 1988-1989, the lower court ruled that those claims
were subject to a settlement agreement entered into between the Department of Labor and
Defendant Grapevine Corporation (Grapevine), and were, accordingly, precluded from
further consideration. In addition, the lower court determined that the Act did not apply to
Plaintiffs' claims that were predicated on a contractual provision guaranteeing them work
and/or pay for three-fourths of the contract period (three-fourths guarantee)See footnote 2
summarily the individual wage assignment claims brought by each of the named Plaintiffs.
After a thorough review of these issues, we conclude that the lower court was in error with
regard to its determination that res judicata principles precluded it from considering
Plaintiffs' claims for 1983-1987 and in its dismissal, without findings, of the Plaintiffs'
individual claims for unlawful wage assignments. The lower court did not commit error,
however, in refusing to consider Plaintiffs' claims for 1988-1989; in holding that the Act did
not apply to the three-fourths guarantee claims; or in dismissing the individually-named
Defendants. Accordingly, we affirm, in part, and reverse, in part, the decision of the circuit
Citing the three-fourths guarantee language in their contracts,See footnote 7
brought suit in state court to recover the differential in the pay they received with what they
alleged they were owed pursuant to the contractual provision guaranteeing them either a
minimum amount of work or payment in lieu of available work.
There is no dispute that each
of the Defendant growers paid Plaintiffs their wages in full
through the end of the ten-day
notice period and there is also no dispute that, at the end of the ten-day period,
there were no
more apples in need of picking.
In addition, the individual Plaintiffs alleged that Defendants
wrongfully assigned portions of their wages for such items as insurance, travel-related
expenses, and medical costs, in violation of the Act. See W.Va. Code § 21-5-3.
When this matter was previously before us, we determined that the Defendant
growers were joint employers with the contracting agent, Grapevine, and that a ten-year
statute of limitations applied to Plaintiffs' contractual-based claims. See Rowe v. Grapevine
Corp. (Rowe I), 193 W.Va. 274, 456 S.E.2d 1 (1995). Following our ruling in Rowe I,
Plaintiffs filed a consolidated amended class action on July 31, 1995. In response to cross-
motions for summary judgment that were filed in December 1995 and January 1996, Judge
Wilkes denied Plaintiffs' motion for summary judgment, but granted partial summary
judgment to Defendants for the 1983-1987 claims on res judicata grounds due to the
dismissal of these same claims by a federal administrative law judge. Judge Wilkes also
dismissed individual Defendants Charles and Dorothy Leavitt,See footnote 8
holding that they were not
employers within the meaning of the Act. Plaintiffs sought relief from both of these ordersSee footnote 9
under Rule 59(e) of the West Virginia Rules of Civil Procedure. Due to a variety of factors,
this case did not proceed for a lengthy period of time.See footnote 10
By order dated December 30, 1998, Judge Taylor denied Plaintiffs' motion to
alter or amend the order of February 28, 1996, dismissing Defendants Charles and Dorothy
Leavitt and further denied Plaintiffs' motion to alter or amend the order of July 22, 1996,
dismissing Plaintiffs' claims for the three-fourths guarantee for the years 1983 to 1987 on res
judicata grounds. In this same order, Judge Taylor, ruling for the first time on these issues,
dismissed Plaintiffs' three-fourths guarantee claims for 1988 and 1989; dismissed Plaintiffs'
claims for liquidated damages under the Act on grounds that the three-fourths guarantee
payments were not wages under the Act; and dismissed Plaintiffs' unlawful wage
assignment claims. Plaintiffs appeal from the adverse rulings made in the lower court's order
entered on December 30, 1998.
Because the ordersSee footnote 11
which Plaintiffs sought to alter or amend were both granted as motions
for summary judgment, the applicable standard of review which governs Judge Taylor's
consideration of Plaintiffs' motions to alter or amend the judgments previously entered by
Judge Wilkes is de novo under our holding in Wickland. With regard to the remaining
matters that were resolved for the first time in Judge Taylor's December 30, 1998, order, our
review of those issues is also on a de novo basis as those matters were ruled upon on grounds
of summary judgment. See Peavy, 192 W.Va. at 190, 451 S.E.2d at 756, syl. pt. 1.
[i]f, during the period of two years after a temporary alien agricultural labor certification
has been granted . . .[and the regional administrator] has reason to believe that an employer
violated a material term or condition of the temporary alien agricultural labor certification,
the [regional administrator] shall . . . investigate the matter. Id. Concluding that the
Department of Labor lacked the authority to proceed with the investigation under the
prescribed two-year period for conducting investigations, the administrative law judge
dismissed Plaintiffs' claims for 1983-1987.See footnote 14
When considering cross-summary judgment motions of the parties in 1996,
Judge Wilkes found:
the plaintiffs herein were parties to the prior action (or in privity with parties to that action); that the three-quarter guarantee claims set forth in the present case with respect to the 1983-1987 harvest seasons are substantially the same as those in the prior litigation; and that the earlier litigation resulted in a final judgment dismissing plaintiffs' claims therein with prejudice. Accordingly, the Court is of the opinion that plaintiffs' three- quarter claims herein for the 1983-87 harvest seasons must be dismissed with prejudice on the ground of res judicata. The facts material to this determination are not genuinely disputed, and defendants are entitled to partial summary judgment as a matter of law.
Judge Taylor, in ruling on Plaintiffs' motion to alter or amend the partial grant of summary
judgment with regard to the 1983-1987 claims, held that:
Denial to reconsider this ruling of Judge Wilkes is predicated on the facts and theories that Plaintiffs['] counsel in this civil action were also counsel of record in the DOL [Department of Labor] proceeding, that no appeal other than a motion for reconsideration was requested by such counsel, that the administrative procedures were not pursued and exhausted, that no appeal of this federal administrative decision was prosecuted in the federal courts, and that this administrative decision complies with the doctrine of res ajudicata [sic] and collateral estoppel would apply.
Arguing that the necessary prerequisites for claim preclusion are lacking
case, Plaintiffs maintain that the circuit court erred in determining that res judicata principles
apply. Res judicata is often analyzed . . . to consist of two preclusion concepts: 'issue
preclusion' and 'claim preclusion'. Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S.
75, 77 n.1 (1984). Although these judicial concepts are integrally related, issue preclusion
is typically referred to under the rubric of collateral estoppel and claim preclusion under the
more generalized designation of res judicata.
In State v. Miller, 194 W.Va. 3, 459 S.E.2d
we recognized the conceptual distinctions between collateral estoppel and res
Res judicata generally applies when there is a final judgment on the merits which precludes the parties or their privies from relitigating the issues that were decided or the issues that could have been decided in the earlier action. See Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308, 313 (1980); In re Estate of McIntosh, 144 W.Va. 583, 109 S.E.2d 153 (1959). A claim is barred by res judicata when the prior action involves identical claims and the same parties or their privies. Collateral estoppel, however, does not always require that the parties be the same. Instead, collateral estoppel requires identical issues raised in successive proceedings and requires a determination of the issues by a valid judgment to which such determination was essential to the judgment. Conley v. Spillers, 171 W.Va. 584, 301 S.E.2d 216 (1983); Lane v. Williams, 150 W.Va. 96, 100, 144 S.E.2d 234, 236 (1965).
194 W.Va. at 9, 459 S.E.2d at 120 (footnote omitted). Since Plaintiffs have assigned as error the lower court's ruling that res judicata barred its consideration of the claims for 1983-1987, we will confine our analysis to claim preclusion principles.
Application of res judicata precepts, as we acknowledged in Miller, is not confined to judicial rulings, but may be applied to administrative actions as well. Id. at 9, 459 S.E.2d at 120 (citing 2 Restatement (Second) of Judgments § 83 (1982)); accord Wheeling-Pittsburgh Steel Corp. v. Rowing, __ W.Va. __, 517 S.E.2d 763 (1999) (stating [i]t is now well[-]established that 'the doctrine of res judicata may be applied to quasi- judicial determinations of administrative agencies'). Id. at __, 517 S.E.2d at 773. [T]he findings and conclusions of an administrative agency may be binding upon the parties in a subsequent proceeding if the agency that rendered the decision acted in a judicial capacity and resolved disputed issues of fact which the parties had an opportunity to litigate. Miller, 194 W.Va. at 9, 459 S.E.2d at 120. We further explained in syllabus point two of Vest v. Board of Education, 193 W.Va. 222, 455 S.E.2d 781 (1995) :
For issue or claim preclusion to attach to quasi-judicial
determinations of administrative agencies, at least where there
is no statutory authority directing otherwise, the prior decision
must be rendered pursuant to the agency's adjudicatory authority
and the procedures employed by the agency must be
substantially similar to those used in a court. In addition, the
identicality of the issues litigated is a key component to
application of administrative res judicata or collateral estoppel.
Differences in the quality or the extensiveness of administrative procedures employed may, however, militate against applying res judicata to administrative rulings, especially where the procedures utilized in the administrative forum were tailored to reaching a prompt, inexpensive determination. See Miller, 194 W.Va. at 10, 459 S.E.2d at 121.
Plaintiffs contend that the lower court erred in applying res judicata to the federal administrative ruling because none of the Plaintiffs were either actual parties to that proceeding or in privy with the parties; Plaintiffs could not have prosecuted their claims or obtained an enforceable remedy in the administrative proceeding; the administrative decision was not a decision on the merits of the claim; and the due process protections necessary for res judicata were not present in the administrative proceeding. Based on these impediments, Plaintiffs argue that it was error for the lower court to refrain from deciding their claims relative to the 1983-1987 picking seasons.
We examine the lower court's decision to employ res judicata pursuant to the three-
prong standard that we articulated in syllabus point fourSee footnote 15
of Blake v. Charleston Area
Medical Center, Inc., 201 W.Va. 469, 498 S.E.2d 41 (1997):
Before the prosecution of a lawsuit may be barred on the basis of res judicata, three elements must be satisfied. First, there must have been a final adjudication on the merits in the prior action by a court having jurisdiction of the proceedings. Second, the two actions must involve either the same parties or persons in privity with those same parties. Third, the cause of action identified for resolution in the subsequent proceeding either must be identical to the cause of action determined in the prior action or must be such that it could have been resolved, had it been presented, in the prior action.
Initially then, we must determine whether there was a final adjudication on the merits in the federal administrative proceeding. To support their position, Defendants rely on a decision reached by the Fourth Circuit Court of Appeals in Shoup v. Bell & Howell Co., 872 F.2d 1178 (4th Cir. 1989), which held that dismissal . . . on statute of limitations grounds is a final judgment on the merits. Id. at 1179 (applying Rule 41(b) of the Federal Rules of Civil Procedure); but see Shoup, 872 F.2d at 1182-86 (contending that dismissal on statute of limitations grounds is not adjudication on merits) (Murnaghan, J., dissenting); see also Syl. Pt. 1, Gillespie v. Johnson, 157 W.Va. 904, 209 S.E.2d 143 (1974) (holding that dismissal of case on statute of limitations grounds is final judgment, and barring appeal, has res judicata effect) . Defendants maintain that the two-year investigatory period set forth in 20 C.F.R. § 655.110(a) was indeed a limitations period and therefore, under Shoup, the dismissal based on this regulation qualifies as an adjudication on the merits. Conversely, Plaintiffs argue that the regulatory provision at issue is not the equivalent of a statute of limitations and therefore, the requisite adjudication on the merits never took place.
The federal courtsSee footnote 16
are in virtual accord that a suit's dismissal based on the
running of the statute of limitations will, absent a clear directive to the contrary, be deemed
a dismissal on the merits that will bar the filing of a subsequent suit on the ground of res
judicata. Semtek Int'l Inc. v. Lockheed Martin Corp., 736 A.2d 1104, 1116 (Md. Ct. Spec.
App. 1999) (citing authority from nine federal circuit courts of appeal for position that
dismissal on statute of limitations grounds is judgment on merits); but see Reinke v. Boden,
45 F.3d 166 (7th Cir.), cert. denied, 516 U.S. 817 (1995) (holding that Illinois federal court
erred in giving preclusive effect to Minnesota state court's dismissal of action on statute of
limitations grounds based on Minnesota's treatment of statutes of limitations as procedural
in nature and without preclusive effect).
The problem presented by this case is that the regulation which effected the
administrative law judge's decision to dismiss the 1983-1987 claims does not even remotely
resemble a statute of limitations. The provisions at issue in 20 C.F.R. § 655.110(a) govern
the authority of the regional administrator for the Department of Labor to investigate whether
an employer has violated the terms and conditions of a temporary alien agricultural labor
certification. The regulatory language at issue is not stated in terms typical of limitations
periods, such as the failure to bring a claim within a set number of years will preclude the
bringing of that claim. As Plaintiffs observe, the applicable provisions of 20 C.F.R.
§ 655.110(a) merely set forth a time restraint which governs the authority of the regional
administrator to investigate alleged violations by the employer and, consequently, determine
whether a penalty can be imposed against the employer.See footnote 17
Since the regulations at issue do
not grant temporary workers a cause of action, Plaintiffs suggest that it logically follows that
those same regulations also do not seek to limit temporary workers from bringing causes of
action in either an administrative or judicial forum.
Given the regulatory framework involved--the certification of employers for
hiring nonimmigrant aliens as workers--we would be hard-pressed to find that the regulation
at issue qualifies as a statute of limitations for purposes of claims to be brought by migrant
workers. The regulation was clearly aimed at revoking an employer's certification and not
at providing a cause of action for migrant workers.
Even the language used to dismiss the
case suggests that the regulation was not applied as a statute of limitations. The stated basis
for the dismissal is the administrative law judge's conclusion that the Regional
Administrator lacked the authority to proceed with the investigation in this matter. Rather
than resembling a statute of limitations, this stated ground for dismissal is more akin to a
conclusion that jurisdiction was lacking.
Under Federal Rule 41(b)--the rule upon which federal cases dealing with the
res judicata effect of dismissals are based--there are three clear exceptions to dismissals
having the automatic effect of an adjudication on the merits. Those delineated exceptions
are dismissals for lack of jurisdiction, for improper venue, or failure to join a party under
Rule 19. See Fed.R.Civ.P. 41(b
).See footnote 18
Discussing the United States Supreme Court's
edification in Costello v. United States, 365 U.S. 265 (1961), concerning the lack of
jurisdiction exception to Rule 41(b), the Fourth Circuit observed in Shoup:
At issue in Costello was whether a district court's previous dismissal of a denaturalization proceeding because the government had failed to file an affidavit of good cause should operate as a dismissal on the merits so as to bar a subsequent denaturalization proceeding. The Supreme Court held that the dismissal was essentially one 'for lack of jurisdiction,' within the meaning of the exception under Rule 41(b). The Court added that it regarded the lack of jurisdiction exception as encompassing those dismissals which are based on a plaintiff's failure to comply with a precondition requisite to the Court's going forward to determine the merits of his substantive claim.
Shoup, 872 F.2d at 1180 (citation omitted).
Explaining why a dismissal on statute of limitations grounds differs from a
dismissal for lack of jurisdiction, the Court stated in Shoup:
[D]ismissals for want of jurisdiction are paradigms of non- merits adjudication. See Nilsen [v. City of Moss Point, Miss., 701 F.2d 556,] at 562 [5th Cir. 1983]. In such a dismissal the court does not regard the merits of an action. It merely classif[ies] [an] action, whatever its merits, as one on which the court concerned cannot speak. In contrast, a statute of limitations dismissal assumes the court could have spoken but refuses to do so. Id.
872 F.2d at 1181. Under the reasoning set forth in Shoup, the dismissal that resulted from the administrative law judge's conclusion that the regional administrator lacked authority to even investigate Plaintiffs' claims is analogous to a finding of no jurisdiction. Rather than a dismissal where the court had jurisdiction but could not proceed because of a statutorily- imposed time impediment, the Department of Labor was without authority, as it concluded, to even investigate the claims for the years 1983-1987.See footnote 19 19 See 20 C.F.R. § 655.110(a). Accordingly, the dismissal by the Department of the Labor was, under the reasoning employed in Shoup, a 'non-merit adjudication.' 872 F.2d at 1181 (quoting Nilsen, 701 F.2d at 562).
Based on our conclusion that the regulatory provision at issue cannot be likened to a statute of limitations, we find that the critical first element necessary for giving the administrative dismissal order preclusive effect--an adjudication on the merits--has not been met. Given our determination that a final adjudication on the merits was not reached , we further conclude that the lower court erred in dismissing Plaintiffs' claims for 1983-1987 on grounds of res judicata.See footnote 20 20
Plaintiffs argue that Judge Taylor erred in giving preclusive effectSee footnote 22
to the settlement
agreement reached with regard to their three-fourths guarantee claims for 1988-89 because
the individual Plaintiffs were not actual parties to the Department of Labor proceeding. In
addition, Plaintiffs maintain that because the settlement amounts they received did not
include interest, they were not fully compensated for their claims for this time period.
In marked contrast to the claims for 1983-1987, Plaintiffs'
claims for the 1988-
89 season were actually investigated and resulted in the entry of a consent order. Pursuant
to the settlement agreement, Grapevine paid to each of the Plaintiffs an amount representing
the difference between the pay they received for those two picking seasons and what they
should have been paid pursuant to the three-fourths guarantee provisions in their respective
contracts. Grapevine paid the full amount of the three-fourths guarantee payments sought
by the Department of Labor. None of the Plaintiffs dispute that they in fact received,
pursuant to the settlement agreement, an amount to compensate them for Defendants'
violations of the three-fourths guarantee for 1988-89.See footnote 23
The essence of Plaintiffs' dispute as
to the lower court's dismissal of their claim for 1988-89 based on the entry of the consent
order is that if they were permitted to proceed with this claim in state court, they could
receive liquidated damages in the form of interest for the more than six-year period that
passed before they received payment pursuant to the settlement agreement.See footnote 24
Refuting Plaintiffs' argument that the settlement agreement should not be given
preclusive effect under res judicata principles, Defendants argue that, under federal law, a
consent order, such as that entered into here, has the same force and effect as an order made
after full hearing. 29 C.F.R. § 501.40(b)(1) (1998). The settlement agreement at issue
contains language, as required by law, stating that it shall have the same force and effect as
Consent Findings and Order of the type described in 29 C.F.R. § 501.40. It is well-settled
that resolution of an action based on a consent decree is a final judgment on the merits for
purposes of res judicata. See NAACP v. Metropolitan Council, 125 F.3d 1171, 1174 (8th
Cir. 1997); Riddle v. Cerro Wire and Cable Group, Inc., 902 F.2d 918, 921 (11th Cir. 1990);
Ho ex rel. Ho v. San Francisco Unified Sch. Dist., 965 F.Supp. 1316, 1321 (N.D. Cal. 1997);
Bechtel Petroleum, Inc. v. Webster, 636 F.Supp. 486, 497 (N.D. Cal. 1984) (stating that
consent decree is as final, conclusive, and binding for purposes of res judicata as one
rendered after adversarial proceedings). Accordingly, the first requirement necessary to
invoke res judicata principles--a final adjudication on the merits--is easily met. See Shoup,
872 F.2d at 1179
, Blake, 201 W.Va. at 472, 498 S.E.2d at 44, syl. pt. 4.
Plaintiffs contend that a lack of privitySee footnote 25
between themselves and Grapevine
necessarily bars the preclusive effect of the settlement agreement with regard to their claims
for 1988-89. Relying on Walton v. United Consumers Club, Inc., 786 F.2d 303 (7th Cir.
1986), Plaintiffs argue that the consent order did not constitute a release as to their 1988-89
claims against Grapevine. Walton, however, is not apposite authority as that case deals with
application of a specific provision of the Fair Labor Standards Act (FLSA)--29 U.S.C.
§ 216(c)--which pertains to payment of unpaid minimum wages or unpaid overtime
compensation. At issue in Walton, was the interpretation of statutory language specifying
that 'the agreement of any employee to accept such payment'
followed by receipt of
payment operates as a waiver to additional recovery. 786 F.2d at 305 (quoting 29 U.S.C.
§ 216(c) and emphasis supplied). Citing principles of statutory construction which require
that legislative inclusion of a term connotes an attendant meaning for such term, the Court
in Walton determined that the cashing of the settlement check in payment of the minimum
wage obligation was not enough to meet the legislative intent underlying 29 U.S.C. § 216(c).
786 F.2d at 305-07. Since this case involves neither the FLSA nor the specific
interpretational issue concerning what acts are required to demonstrate an employee's
agreement to accept payment in settlement of deficient minimum wages, Walton is not
In furtherance of their contention that privity is nonexistent, Plaintiffs argue that the lack of direct involvement in the settlement negotiations combined with their non- signatory status to the agreement proves fatal with regard to viewing the settlement agreement as dispositive of their claims. As Defendants explain, however, the doctrine of representative claim preclusion eviscerates Plaintiffs' contentions on this issue. In EEOC v. U.S. Steel Corp., 921 F.2d 489 (3rd Cir. 1990) , individuals who had previously brought suit against their employer on age discrimination grounds but were unsuccessful, were precluded from pursuing subsequent litigation of those same claims through an EEOC action. Attempting to avoid the preclusive effect of the individual's unsuccessful suits, the EEOC argued that no privity existed as different parties were involved in each proceeding. Analyzing whether the EEOC and the private plaintiffs were in privity, the Court stated:
Privity, as noted by this court many years ago in an opinion authored by Judge Goodrich, is merely a word used to say that the relationship between one who is a party on the record and another is close enough to include that other within the res judicata. One relationship long held to fall within the concept of privity is that between a nonparty and party who acts as the nonparty's representative. See Martin v. Wilks, 490 U.S. 755, 109 S.Ct. 2180, 2191 n.2, 104 L.Ed.2d 835 (1989); Restatement (Second) of Judgments § 41(1980).
921 F.2d at 493 (citation omitted and emphasis supplied). The Court further observed in U.S. Steel that [o]ver the years, claim preclusion has been applied to a variety of representatives such as trustee actions, class actions, and labor union actions. Id. at 493-94.
This principle of representative claim preclusion indisputably applies to actions brought by a government agency or officer on behalf of non-party individuals. U.S. Steel, 921 F.2d at 494. Well established precedent . . . holds that the judgment in an action in which a government agency or officer represents private individuals is binding on those individuals. Id. (citing Heckman v. United States, 224 U.S. 413, 445-56 (1912) (recognizing if the United States . . . is entitled to bring a suit . . . [to set aside illegal land
conveyances], it must follow that the decree will bind not only the United States, but the
Indians whom it represents in the litigation); see also Alaska Sport Fishing Ass'n v. Exxon
Corp., 34 F.3d 769, 774 (9th Cir. 1994) (holding that consent decree in action by United
States and State of Alaska against Exxon which resolved governments' claims for damage
to use and enjoyment of environment had res judicata effect and precluded non-party sport
fisherman from pursuing same type of claim in separate action against Exxon); Colby v. J.C.
Penney Co., 811 F.2d 1119, 1125 (7th Cir. 1987) (discussing doctrine of virtual
representation which permits privity element of res judicata to be satisfied when the party
to the first suit was an adequate representative of the . . . interests of party to second suit);See footnote 26
Jones v. Bell Helicopter Co., 614 F.2d 1389 (5th Cir. 1980) (holding that dismissal of
EEOC's action for failure to comply with Administrative Procedures Act barred subsequent
private action based on same claim under res judicata principles), abrogated on other grounds
as stated in United States v. Popovich, 820 F.2d 134 (5th Cir. 1987); McClain v. Wagner
Elec. Corp., 550 F.2d 1115, 1119 (8th Cir. 1977) (ruling that EEOC consent decree with
employer barred subsequent private action by employee against employer on same alleged
acts of discrimination); EEOC v. Harris Chernin, Inc., 767 F.Supp. 919, 923 (N.D. Ill. 1991)
(applying res judicata principles to bar EEOC from pursuing ADEA claim for employee
whose individual ADEA claim had previously been dismissed on statute of limitations
grounds and discussing trend to loosen 'the traditional and sometimes artificial limitations
on the application of res judicata' with regard to privity requirement) (citing Maguire v.
Selcke, 1990 WL 70451 at *4, (N.D. Ill. 1990) and quoting Diaz v. City of Chicago, 601
F.Supp. 1251, 1253 (N.D. Ill. 1984)), aff'd in part, rev'd in part, 10 F.3d 1286 (7th Cir.
1993);See footnote 27
but cf. EEOC v. Baptist Mem'l Hosp., 615 F.Supp. 111, 115 (W.D. Mo. 1984)
(holding that employee was not precluded from bringing separate employment discrimination
action against employer where employee was not a party to consent decree entered into
between EEOC and employer
, employee had rejected consent decree and had received no
relief under decree).
Acknowledging that [w]hile the principle of claim preclusion by virtue of
government representation is settled, in certain cases, as the Court in U.S. Steel recognized,
it can be difficult to determine whether a government officer or agency represents or
represented private individuals for res judicata purposes.See footnote 28
921 F.2d at 494. The Court had
no difficulty, however,
in determining in U.S. Steel
that it is clear that the EEOC sought to
serve as the representative of the former employees . . . . Id. at 494. Critical to the Court's
conclusion was the fact
that the EEOC was attempting to obtain pension benefits on behalf
of the individuals formerly employed by U.S. Steel. Id. Additional evidence that the Court
cited as indicative of the government's representational status was the employees'
willingness to accept relief awarded in the EEOC action. According to the Court, [t]his
demonstrates that they view the EEOC as a representative who sought to litigate on their
behalf. 921 F.2d at 495.
Plaintiffs' contention that their absence as named parties to the settlement
agreement prevents the agreement from operating as a bar to their state court claims was
expressly rejected by the Court in U.S. Steel:
The absence of any formal designation of the individual claimants as parties, however, does not change the nature of the EEOC's role as the individuals' representative and should not change the effect of the doctrine of claim preclusion. By claiming or accepting individual relief won by the EEOC, the individuals would necessarily concede that the EEOC was their representative and that they were embraced by the EEOC's judgment.
921 F.2d at 496. Applying the doctrine of representative claim preclusion, the Court in
EEOC determined that
when an administrative agency, in the course of pursuing an
enforcement action, obtains monetary relief that is accepted by private individuals through
a consent decree or final judgment, the agency's action has res judicata effect and precludes
litigation by the aggrieved parties on the same cause of action against the same defendant
See id. at 496-97.
For the same reasons the EEOC was determined to have been acting on behalf of the former U.S. Steel workers,See footnote 29 29 we conclude that the Department of Labor was similarly acting in a representational capacity when it sought to enforce the three-fourths guarantee provision of the work contracts between Grapevine and Plaintiffs and did in fact obtain monetary relief for Plaintiffs as a result of its efforts. Through their acceptance of the monetary relief obtained through the settlement agreement, Plaintiffs have conceded that the Department of Labor was indeed their representative with regard to obtaining relief on their behalves.See footnote 30 30 See U.S. Steel, 921 F.2d at 496. The fact that the settlement agreement released
Grapevine rather than the individual Plaintiffs is not determinative. As the Court explained
in Alaska Sport Fishing, since the government, in its representative capacity, released Exxon
from 'any and all civil claims' that the government brought or could have brought against
Exxon . . ., under the doctrine of res judicata, [the private] plaintiffs are barred from asserting
such claims in a second suit. 34 F.3d at 774. The settlement agreement which releases
Grapevine from any and all claims that it might bring under the Act arising out of the events
that are the subject of this proceeding [three-fourths guarantee provision payments for 1988-
89], similarly bars Plaintiffs from bringing suit against Grapevine for these same claims.
Having dispensed with the first two elements necessary to afford res judicata
principles to the consent decree--finality of judgment and privity--we are left with only one
element to consider.See footnote 31
The final requirement necessary to give res judicata effect to the
settlement agreement is that the cause of action identified for resolution in the subsequent
proceeding either must be identical to the cause of action determined in the prior action or
must be such that it could have been resolved, had it been presented, in the prior action.
Blake, 201 W.Va. at 472, 498 S.E.2d at 44, syl. pt. 4. The claim which was the subject of
the consent order was Plaintiffs' alleged entitlement to remuneration for the 1988-89 seasons
based on the three-fourths guarantee provision. Plaintiffs have sought relief for this same
claim in state court. In an attempt to distinguish the state court claims from those previously
pursued in the federal administrative action, Plaintiffs argue that they could not have received
liquidated damages (i.e. interest) in the federal proceeding.See footnote 32
Without addressing whether it is the claim or the relief sought that is critical
to a finding on identicality of the issues,See footnote 33
we conclude that Plaintiffs' distinction concerning
the remedial relief sought is without merit given our determination that Plaintiffs are not
entitled to liquidated damages under the Act. See infra part III. C.
determine that the claims at issue in both the federal administrative proceeding and the
subsequent state court proceeding with regard to the 1988-89 claim on the three-fourths
guarantee provision are identical for purposes of claim preclusion analysis. Having found
no bar to application of the doctrine of res judicata to the consent order under principles of
representative claim preclusion, we affirm the lower court's decision to dismiss Plaintiffs'
three-fourths guarantee claims pertinent to the 1988-89 picking seasons.
Similar in nature to payments imposed pursuant to WARN, the three-fourths
guarantee payments at issue in this case arise pursuant to federal law when an employer has
not made work available for the requisite period under a work contract. See 20 C.F.R.
§ 655.102(b) (6). Just as the WARN payments were determined not to be compensation for
labor or services rendered or then accrued fringe benefits, the three-fourths guarantee
payments are not wages under the Act's definitions. W. Va. Code § 21-5-1(c). Rather than
being wages, the payments made pursuant to the three-fourths guarantee are 'damages
owed employees for suffering an unexpected employment loss where they had a rightful
expectation of continued employment with that employer.' Conrad, 1998 WL 3949638 at
*4, __ W.Va. at __, __ S.E.2d at __ (quoting Georgia-Pacific Corp. v. Unemployment
Compensation Bd. of Review, 630 A.2d 948, 956-57 (Pa. Commw. Ct. 1993)).
The three-fourths guarantee payments that Plaintiffs sought from Defendants
were not for services rendered, nor were they then accrued fringe benefits. W.Va. Code
§ 21-5-1(c). Instead, the three-fourths guarantee payments arose as a result of Defendants'
failure to provide Plaintiffs the opportunity to work for the entire length of the contract
period. Consequently, we conclude that payments made to migrant workers pursuant to
provisions required by federal law which mandate that an employer/grower must guarantee
work for three-fourths of the contractual period or make payments in lieu of providing such
work opportunity do not constitute wages as defined by the Act.
See also Nieto-Santos v.
Fletcher Farms, 743 F.2d 638, 642 (9th Cir. 1984) (holding that three-quarter guarantee
payments were not wagesSee footnote 36
under Arizona wage payment laws permitting treble damages
for non-payment under rationale that wages are restricted to compensation due an employee
in return for work performed).
Accordingly, we find
that the circuit court did not commit
error as to its ruling that the provisions of the Act do not apply to the three-fourths guarantee
At issue in Rowe I was whether the definition of employer under the Act could include the individual growers on whose behalf Grapevine hired Jamaican migrant workers. In syllabus point one of Rowe I we held:
The West Virginia Wage Payment and Collection Act, W.Va.Code 21-5-1 , et seq. is applicable to any firm that suffers or permits a person to work; therefore, when foreign agricultural workers are recruited by a corporation whose only activity is the hiring, transporting, feeding, housing and payment of workers who perform all their services for individual growers, the individual growers are joint employers of the workers for the purposes of the West Virginia Wage Payment and Collection Act.
193 W.Va. at 274, 456 S.E.2d at 1. Our ruling was clearly aimed at expanding the employer subject to the provisions of the Act to include the defendant growers on whose behalf Grapevine entered into contracts with migrant workers. Rowe I did not address, however, whether the individuals who were named as defendants and who corporately hired migrant workers through Grapevine could be held personally liable under the theories advanced by Plaintiffs.
A careful reading of Rowe I demonstrates that implicit in our ruling was the
qualification that only the individual apple growers who used Grapevine as their contractual
agent to secure migrant workers, were joint employers with Grapevine in regards to the
migrant workers.See footnote 37
See id. at 277, 456 S.E.2d at 4.
In concluding that the growers who used
Grapevine to hire the migrant workers could come within the ambit of the definition of
employer under the Act, we failed to specify that only the growers, individual or corporate,
who were members of Grapevine could be viewed as joint employers with Grapevine. We
thus find it necessary to clarify our previous holding in syllabus point one of Rowe I
explain that in using the term individual growers we were referring, not to those persons
named individually as defendants, but to those persons or corporations who were
shareholders in Grapevine and for whom Grapevine acted in a representational capacity
during the relevant time periods.
The lower court had before it evidence, as its findings demonstrate, that the
Leavitts did not personally hire migrant workers. During all relevant time periods, their
corporation, Del Orchard, was the contracting agent with Grapevine. Well-established
principles of corporate and contract law support the lower court's decision that the Leavitts
are not personally liable for damages arising from Plaintiffs' causes of action. See Mills v.
USA Mobile Communications, Inc., 190 W.Va. 209, 438 S.E.2d 1 (1993); Laya v. Erin
Homes, Inc., 177 W.Va. 343, 352 S.E.2d 93 (1986). Accordingly, we find no error with
regard to the lower court's conclusion that the Leavitts should be dismissed from this action.
Based on the foregoing, we affirm the decision of the Circuit Court of Berkeley
County as to its dismissal of Plaintiffs' claims for the 1988-89 harvesting seasons; its finding
that the Act does not apply to the three-fourths guarantee payments; and its dismissal of the
Leavitts. We reverse the lower court's ruling as to the dismissal of the 1983-87 claims on
the grounds of res judicata and Plaintiffs' wage assignment claims.
Affirmed, in part;
Reversed, in part.
guarantee to offer the worker employment for at least three-
fourths of the workdays of the total periods during which the
work contract and all extensions thereof are in effect, beginning
with the first workday after the arrival of the worker at the place
of employment and ending on the expiration date specified in
the work contract, or in its extensions, if any.
20 C.F.R.§ 655.102 (b)(6)(i) (1998).
The employment guarantees the worker the opportunity for the hourly equivalent of at least three-fourths (3/4) of the work days (as defined in Article I) of the total period during which the work contract and all extensions thereof are in effect, beginning with the first workday after the worker's arrival at the place of employment and ending on the termination date specified in this contract or its extension, if any.
infra note 19.
W.Va. at 472, 498 S.E.2d at 44, syl. pt. 4.
the $110.93 amount that George Myers was paid for 1989, he was actually owed $442.20. Similarly, they state that Errol Young was paid $75.60 when he was owed $442.20. Any dispute as to these amounts should have been resolved either at the administrative proceeding or on appeal therefrom. As Judge Taylor observed, Plaintiffs never took any appeal from the entry of the consent decree resolution of the 1988-89 claims. See 5 U.S.C. § 702 (1995) (providing that [a] person . . . adversely affected or aggrieved by agency action . . . is entitled to judicial review thereof); see also PepsiCo. Inc. v. FTC, 472 F.2d 179, 185-86 (2nd Cir. 1972), cert. denied, 414 U.S. 876 (1973) (rejecting position that review of administrative rulings is limited to entities that were parties to administrative proceeding and citing Pittsburgh & W.Va. Ry. Co. v. United States, 281 U.S. 479, 486 (1930)). Defendants further note that Plaintiffs offered nothing more than their own calculations as support for their claim regarding erroneous calculations. Defendants observe that the amounts paid Plaintiffs were based on the Department of Labor's own calculations and that these calculations were made a part of the record and appended to the consent order. In several instances, according to Defendants, Grapevine actually recognized understatements of the amounts owed Plaintiffs and these calculation errors were then corrected by the Department of Labor.
U.S. Steel, 921 F.2d at 494-96 (discussing interplay of public versus private interests associated with EEOC's enforcement role); Riddle, 902 F.2d at 922-23 (contrasting interests of EEOC to interests of aggrieved individual in discrimination case); see also 18 Charles A. Wright et al., Federal Practice and Procedure § 4458 at 513 (1981).
Department of Labor cases at the time they accepted the settlement checks. Given their expertise in this area of the law, Defendants suggest that Plaintiffs' counsel could have raised their objections to the Department of Labor regarding any concerns Plaintiffs had with either the amount of the settlement or the issue of waiver and release. According to Defendants, the record in the administrative matter contain no such objections.
attendant concerns of whether the litigants were provided a 'full and fair opportunity to litigate the matters in dispute.' Id. at 227, 455 S.E.2d at 786 (quoting Mellon-Stuart Co. v. Hall, 178 W.Va. 291, 359 S.E.2d 124 (1987)); see also Miller, 194 W.Va. at 10, 459 S.E.2d at 121 (discussing fact that legal standards and procedures used must be similar for purposes of issue preclusion).
purposes of res judicata is whether two claims arose out of same core of operative facts as opposed to whether identical relief was sought in both actions).
nondiscretionary compensation due an employee in return for
labor or services rendered by an employee for which the
employee has a reasonable expectation to be paid whether
determined by a time, task, piece, commission or other method
of calculation. Wages include sick pay, vacation pay, severance
pay, commissions, bonuses and other amounts promised when
the employer has a policy or a practice of making such
Ariz. Rev. Stat. Ann. § 23-350 (West 1995).