Champagne v. Thurston County

Feb 14, 2008

OUTCOME: WA Supreme Court affirmed dismissal of claims

In Champagne v. Thurston County, 136 Wn.2d 69, 178 P.3d 936 (2008), the Washington Supreme Court addressed whether a delay in the payment of employee wages can give rise to employer liability under the ... Washington Rebate Act (WRA), the Washington Minimum Wage Act (MWA), and the Washington Wage Payment Act (WPA). The plaintiffs in the Champagne case were four Thurston County correctional officers who claimed that the timing of the County's wage payments was unlawful under Washington state law. Consistent with the terms of the plaintiffs' collective bargaining agreement, the County paid the plaintiffs their base pay at the end of the current monthly pay period, and then paid any "non-regular" wages owed to the plaintiffs (such as overtime pay) at the end of the next monthly pay period (e.g., any overtime worked in March was paid at the end of April). The plaintiffs alleged that this practice violated the requirements of the Washington time-of-payment regulation, and therefore entitled them to recover double damages, prejudgment interest, attorney fees and costs under the WRA, the MWA and the WPA. The Washington Supreme Court rejected each of these claims and affirmed the dismissal of plaintiffs' complaint. With respect to plaintiffs' claims under the WRA (which allows an employee to recover double damages against an employer that willfully withholds wages), the Supreme Court held that an employee may only assert a "delayed payment of wages" claim under the WRA if the delay is alleged to have been "willful and with the intent to deprive" the employee of wages. Champagne, 136 Wn.2d at 81. Since the County paid the Champagne plaintiffs all of their wages on a fixed schedule in accordance with the terms of their collective bargaining agreement, and since the plaintiffs failed to "allege that bad faith or animus motivated the creation or administration" of the County's pay system, the Supreme Court held that any delay in the payment of plaintiffs' wages was the result of a "bona fide dispute over whether the wages were due by a certain time" rather than a willful withholding of wages. Id. at 82. This portion of the Supreme Court's opinion is important because it brings needed clarity to the elements and proof required to assert double damages claims under the WRA, and because it confirms that such claims may be dismissed as a matter of law on summary judgment in appropriate cases. The Supreme Court's treatment of plaintiffs' MWA and WPA claims is equally important. In affirming the dismissal of plaintiffs' MWA claims, the Supreme Court completely shut the door on the use of the MWA in delayed wage payment cases -- in the words of the Supreme Court, "delayed payment of wages does not give rise to employer liability under the MWA." Id. at 89; see also id. at 88 (“the MWA does not provide a cause of action where the employer has actually paid all wages due an employee”). In similar fashion, the Supreme Court categorically rejected plaintiffs' WPA claims because "the WPA does not apply outside the termination context." Id. at 89. Since the plaintiffs were all current employees of the County, they could not use the WPA (which addresses final pay requirements for terminated employees) as a basis for asserting claims against the County.