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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2000 Term
JOHN TAYLOR, et al.,
Plaintiffs Below, Appellees
MUTUAL MINING, INC.,
ISLAND CREEK COAL COMPANY,
ISLAND CREEK CORPORATION, CONSOL, INC.,
and LAUREL RUN MINING COMPANY,
Defendants Below, Appellants
Appeal from the Circuit Court of Logan County
Honorable Roger L. Perry, Judge
Case No. 95-C-409-P
Submitted: November 28, 2000
Filed: December 11, 2000
Rodney L. Bean, Esquire
F. Donnelly, Esquire
Robert M. Steptoe, Jr., Esquire
Steptoe & Johnson
Charleston, West Virginia
Attorneys for Island Creek, CONSOL
& Laurel Run
The Opinion of the Court was delivered PER CURIAM.
JUSTICE STARCHER dissents and reserves the right to file a dissenting Opinion.
JUSTICE MCGRAW dissents and reserves the right to file a dissenting Opinion.
SYLLABUS BY THE COURT
Back pay damages paid
pursuant to the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
§§ 2101--2109 (1988), do not constitute wages as defined by the West
Virginia Wage Payment and Collection Act, W.Va. Code §§ 21-5-1 to
21-5-18, so that the time limitations governing the payment of wages in W.Va.
Code § 21-5-4(b), (c) and (d) (1975) do not apply to payments made pursuant
to the Worker Adjustment and Retraining Notification Act. Syllabus, Conrad
v. Charles Town Races, Inc., 206 W.Va. 45, 521 S.E.2d 537 (1998).
Through this appeal, Appellant
Island Creek Coal Company (Island Coal) seeks a reversal of the January
3, 2000, decision of the Circuit Court of Logan County finding it liable under
the West Virginia Wage Payment and Protection Act (Act), West Virginia
Code §§ 21-5-1 to -18 (1996), for two arbitration awards and one Mine
Safety and Health Administration (MSHA) award issued against Mutual
Mining, Inc. (Mutual Mining) in favor of Appellees John Taylor et
al.See footnote 1 1 After
examining this issue, we determine that the lower court was in error and accordingly,
I. Factual and Procedural Background
Mutual Mining, a contract miner
for Island Creek Coal, laid off eighteen of its miners on June 7, 1995. At the
time of the layoff these miners were owed unpaid wages and benefits. In an attempt
to collect these wages and benefits, the miners filed a mechanic's lien on Island
Creek's property on June 29, 1995. They subsequently initiated an action in
Logan County Circuit Court against both Mutual MiningSee
footnote 2 2 and Island Creek Coal. The action was filed under the ActSee
footnote 3 3 and also pursuant to the statutory provisions pertaining
to the enforcement of mechanic's liens.See
footnote 4 4
Appellees alleged that Island
Creek was the prime contractor and was therefore responsible for
the payment of their wages and benefits under West Virginia Code § 21-5-7.See
footnote 5 5 In addition to seeking wages, the miners also sought
recovery of amounts awarded to them in two separate arbitration proceedings
and in an MSHA proceeding, all three of which were brought solely against Mutual
Mining. In a ruling dated November 14, 1997, the circuit court granted Appellees
summary judgment based on its determination that Island Creek was the prime
contractor. The court awarded Appellees judgment . . . as to liability for actual damages consisting
of wages and applicable fringe benefits together with prejudgment interest,
costs, and reasonable attorneys' fees. In its November 14, 1997, order,
the lower court specifically left undetermined the actual amount of damages
that Appellees were to be paid. Before any further order was entered specifying
the amount of damages owed, this Court issued its decision in Conrad v.
Charles Town Races, Inc., 206 W.Va. 45, 521 S.E.2d 537 (1998). Appellant
argues here, as it did below, that Conrad fully resolves the issues presented
in this case.
In Conrad, this Court
was asked to determine whether a lower court correctly ruled that payments required
under the federal WARNSee footnote 6 6
Act (for failure to give workers a full sixty-day notice and wages prior
to a plant closing) were not wages under the Act. Disregarding the
rubric used in describing the WARN payments (back pay), we considered and adopted
the reasoning of other courts on this issue--that such payments are viewed as
damages awarded for violation of a legislative act and not compensation
for past services. Affirming the lower court's ruling, we held that the WARN
payments were not compensation for services rendered but [we]re damages designed to compensate employees for an employer's failure to provide the
required sixty days' notice prior to [plant] closure. 206 W.Va. at 50,
521 S.E.2d at 542.
The circuit court, upon being
apprised of the Conrad ruling, informed counsel that I do not find
it to have altered this decision. By order dated January 3, 2000, the
lower court awarded to Appellees the amount of $519,681.94, plus interest. Appellants
do not challenge the portion of this amount which represents wages or fringe
benefits owed to Appellees.See footnote
7 7 Instead, they challenge the inclusion of $279,291.12 based
on the fact that this amount represents moneys that were either awarded through
arbitration proceedings or as a result of an MSHA proceeding. Appellants contend
that Conrad prohibits collection of these amounts under the Act since
such amounts are more in the nature of a damage award, rather than
payment for labor or services. See W.Va. Code § 21-5-1(c) (defining
wages under the Act).
Given the differing facts
underlying each of the three awards challenged by Appellants, we briefly set
forth the particulars concerning the arbitration and MSHA awards at issue.
A. Parkinson AwardSee footnote 8 8
The Parkinson arbitration matter
involved grievances filed to compel payment of graduated vacation pay (thirteen
days worth) allegedly due Appellees under Article XIV of the National Bituminous
Coal Wage Agreement of 1988 (wage agreement). The issue in this arbitration
was whether Appellees, who had previously worked for Elm MiningSee
footnote 9 9 before being hired by Mutual Mining, were entitled
to the graduated vacation pay benefit under the terms of the wage agreement. The
proceeding involved application of the contractual concept of continuous employment.
Based on his decision that Appellees did not have to be employed by the same company
to come within this concept of continuous employment, the arbitrator determined
that Appellees were entitled to the graduated vacation pay despite the change
in employers from Elk Mining to Mutual Mining. The amount of this award, entered
against Mutual Mining, was $143,938.See
footnote 10 10
B. Tanzman Award
The Tanzman arbitration matter
involved a grievance filed by John Taylor in connection with his allegedly wrongful
lay-off on December 22, 1992. At issue was whether Mutual Mining had violated
the wage agreement by retaining another employee with less seniority. The arbitrator
ruled in Mr. Taylor's favor,See footnote
11 11 based on the violation of the wage agreement, and awarded
him reinstatement plus back pay in the amount of $27,775.39.
C. MSHA Award
The MSHA award involved the
discharge of five miners who were on the safety committee and had reported a
number of serious safety violations. A federal ALJ determined that the five
individuals had been illegally discharged by Mutual Mining and directed that
they be reimbursed for their lost wages and benefits.See
footnote 12 12 The total amount of this award was $105,577.73.
Appellants argue that each of
the arbitration awards and the MSHA award fail to meet the statutory definition
of wages and are therefore not recoverable under the Act. As defined
by the Act,
term wages means compensation for labor or services rendered by an
employee, whether the amount is determined on a time, task, piece, commission
or other basis of calculation. As used in sections four, five, eight-a, ten and
twelve of this article, the term "wages" shall also include then accrued
fringe benefits capable of calculation and payable directly to an employee: Provided,
That nothing herein contained shall require fringe benefits to be calculated contrary
to any agreement between an employer and his employees which does not contradict
the provisions of this article.
W.Va. Code § 21-5-1(c). Analogizing to this Court's determination in
Conrad that the back pay remedy pursuant to the WARN Act is not compensation
for labor or services rendered, as 'wages' are defined in the WCPA [Act], but
a form of damages owed only in the event of an adjudication and finding of liability,
Appellants argue that the arbitration and MSHA awards similarly qualify as damages
rather than wages. 206 W.Va. at 48, 521 S.E.2d at 540.
Like the circuit court, Appellees
treat Conrad as inapposite authority,See
footnote 13 13 and rely instead on a decision issued by the United
States District Court of Appeals in Stump v. Cyprus Kanawha Corp., 919
F.Supp. 221 (S.D. W.Va. 1995). Appellees cite Stump for the proposition
that arbitration awards can be enforced through the Act. Appellees' reliance on
Stump was clearly misguidedSee footnote
14 14 for several reasons. In deciding that preemption under the
Labor Management Relations Act was not required in Stump, the district
court relied on Albradco, Inc. v. Bevona, 982 F.2d 82 (2nd Cir. 1982).
The New York statute being interpreted in Albradco, as Appellants note,
is written in much broader terms than our Act. Rather than limiting recovery under
the applicable statute to wages, as our Act does, the New York statute
encompasses all debts, wages or salaries due and owing. Id.
at 84 (quoting N.Y.B.C.L. § 630(a)) (emphasis supplied). Most critical,
however, is the fact that both Albradco and Stump were concerned
with the issue of preemption, under either ERISA or the Labor Management Relations
Act. Thus, the issue of whether an arbitration award can be enforced through a wage payment
and collections act was not directly under consideration. Rather than looking
to the Stump decision, the lower court should have viewed Conrad
as the controlling authority since that decision, unlike Stump, directly
addressed what constitutes wages under the Act.
Notwithstanding its remedial
purposes,See footnote 15 15
Appellants observe that the Act, is clearly geared toward the collection
of wages. See Farley v. Zapata Coal Corp., 167 W.Va.
630,639, 281 S.E.2d 238, 244 (1981) (stating that [b]oth the Wage Payment
and Collection Act and our mechanics' lien statutes are designed to protect
the laborer and act as an aid in the collection of compensation wrongfully
withheld) (emphasis supplied). Emphasizing that the Act is not a collection
mechanism for other types of debts for which alternate collection means are
available, Appellants reason that, by permitting the Act to be used to collect
debts other than those properly falling within its parameters, the Court would
be fashioning a remedy that was not sanctioned by the Legislature and thereby
wrongly subjecting entities to the punitive penalties associated with the Act's
violation, such as liquidated damages and attorney's fees.See
footnote 16 16 See W.Va. Code §§ 21-5-4(e);
Both the MSHA award and the
Tanzman award easily fall within the reaches of our Conrad decision.
In each of those matters, the remedy fashioned was an award of back pay. Such
amounts, just as in Conrad, were awarded not for labor or services
rendered, but instead as a form of damages for violation of the collective
bargaining agreement. We were clear in Conrad that amounts awarded as
a form of damages do not qualify as wages under the Act. See
206 W.Va. at 50, 521 S.E.2d at 542.
Less clear, however, is the
Parkinson award, which concerned the award of graduated vacation pay. Appellees
properly characterize graduated vacation pay as fringe benefits. See
W.Va. Code § 21-5-1(l). Given the inclusion of fringe benefits within
the definition of wages, Appellees summarily conclude that the award
of graduated vacation pay is necessarily an amount they can recover under the
Act. See W.Va. Code §§ 21-5-1(c), (l). Despite the
inclusion of fringe benefits within the definition of wages, Appellants point
out that the graduated vacation pay at issue in the arbitration award was not earned by Appellees in connection with their work for Mutual
Mining. See W.Va. Code § 21-5-1(c). Instead, it was a form
of pay to which the terms of the wage agreement entitled them based on their
previous years of employment with Elk Mining. Appellants argue that because
the Parkinson award only resulted through an adjudication and finding
of liability, it is a form of damage that falls outside the
reach of the Act. See Conrad, 206 W.Va. at 48, 521 S.E.2d at 540.
If this award of graduated
vacation pay had first accruedSee footnote
17 17 during the period when Appellees were employed by Mutual
Mining, rather than when they were employed by Elk Mining, we would be more
willing to consider that vacation pay as having been earned rather
than being awarded as a form of damages as a direct result of legal proceedings
under the rationale of Conrad. See 205 W.Va. at 48, 521 S.E.2d
at 540. Under the facts presented, we find the graduated vacation pay awarded
by the arbitrator in the Parkinson matter to be more akin to an award of damages
than to an award of wages, as that term is defined by the Act. See
W.Va. Code § 21-5-1(c); Conrad, 205 W.Va. at 50, 521 S.E.2d
Based on the foregoing, we reverse
the decision of the Circuit Court of Logan County.
Footnote: 1 1Appellees
are coal miners that were formerly employed by Mutual Mining.
Footnote: 2 2The
lower court entered a default judgment against Mutual Mining, who never appeared
in the case.
Footnote: 3 3Appellees
cite the following provisions of the Act in their complaint: W.Va. Code §§ 21-5-4(e),
21-5-7, and 21-5-12.
Footnote: 4 4The
statutory provisions cited by Appellees for enforcement of their mechanic's liens
are: W.Va. Code §§ 38-2-5, 38-2-6, 38-2-31, and 38-2-33 (1997).
Footnote: 5 5That
provision requires that:
any person, firm or corporation shall contract with another for the performance
of any work which the prime contracting person has undertaken to perform for
another, the prime contractor shall become civilly liable to employees engaged
in the performance of work under such contract for the payment of wages and
fringe benefits, exclusive of liquidated damages as provided in section four
(e) of this article, to the extent that the employer of such employee fails
to pay such wages and fringe benefits. . . .
W.Va. Code § 21-5-7.
Footnote: 6 6Worker
Adjustment and Retraining Notification Act. See 29 U.S.C. §§
Footnote: 7 7Appellants
represented during oral argument (and Appellees did not dispute this representation)
that all wages, interest, and liquidated damages owed under the lower court's
ruling have been paid. With regard to the lower court's award of attorney's fees,
Appellants stated that they had paid such fees up to the date of the filing of
Footnote: 8 8The
two arbitration proceedings are referred to respectively as the Parkinson award
and the Tanzman award, based on the surname of the arbitrator.
Footnote: 9 9Appellees
began working for Mutual Mining in 1989. Island Creek Coal first entered into
a contract with Mutual Mining on December 18, 1988. The grievance concerning graduated
vacation pay was filed on July 20, 1993, and the arbitrator's decision was issued
on October 28, 1994.
Footnote: 10 10Despite
Appellees' claim that Island Creek was a party to that proceeding, the grievance
ruling indicates that the grievance was only filed against Mutual Mining. While
the arbitration ruling indicates that two Island Creek employees appeared at the
arbitration hearing on behalf of Mutual Mining, Island Creek explained during
oral argument that these two employees were present because they were called as
Footnote: 11 11Both
the federal district court and the court of appeals upheld this ruling.
Footnote: 12 12The
Fourth Circuit Court of Appeals affirmed this decision.
Footnote: 13 13We
are unpersuaded by Appellees' attempt to distinguish Conrad, and our more
recent decision in Rowe v. Grapevine, 206 W.Va. 703, 527 S.E.2d 814 (1999),
applying Conrad, on the grounds that those two decisions involved liquidated
damages in contrast to this decision where liquidated damages were not awarded
in conjunction with the arbitration and MSHA awards. This distinction has no bearing
on the applicability of this Court's ruling in Conrad.
Footnote: 14 14It
is one thing for the court in Stump to say that the Albradco decision
from the Second Circuit indicates that one can enforce an arbitration decision
based upon a state's wage payment and collection act and receive liquidated damages
pursuant to the state act regardless of a collective bargaining agreement,
and the Appellees to say that Stump stands for the proposition that arbitration
awards can be properly enforced/collected through the Wage Payment and Collection
Act. 919 F.Supp. at 225.
Footnote: 15 15See
Syl. Pt. 3, Jones v. Tri-County Growers, Inc., 179 W.Va. 218, 366 S.E.2d
726 (1988) (stating that [t]he West Virginia Wage Payment and Collection
Act is remedial legislation designed to protect working people in a system in
the collection of compensation wrongly withheld).
Footnote: 16 16The
Act does not hold a prime contractor responsible for liquidated damages. W.Va.
Code § 21-5-7.
Footnote: 17 17See
W.Va. Code § 21-5-1(c) (including within statutory definition of wages
then accrued fringe benefits capable of calculation).