Fairmont Tool, Inc. v. Adam J. Davis, Individually and on Behalf of Others Similarly Situated

West Virginia Supreme Court·Decided November 22, 2021·No. 20-0684·Published

Opinion

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

September 2021 Term FILED _______________ November 22, 2021 released at 3:00 p.m.

EDYTHE NASH GAISER, CLERK No. 20-0684 SUPREME COURT OF APPEALS _______________ OF WEST VIRGINIA

FAIRMONT TOOL, INC.,

Petitioner

v.

ADAM J. DAVIS, Individually and on Behalf of Those Similarly Situated, Respondent

Appeal from the Circuit Court of Marion County The Honorable David R. Janes, Judge Civil Action No. 17-C-163

AFFIRMED

Submitted: October 6, 2021 Filed: November 22, 2021

J. Robert Russell, Esq. James B. Stoneking, Esq. David L. T. Butler, Esq. Jonathan R. Marshall, Esq. Shuman McCuskey Slicer PLLC Bailey & Glasser LLP Morgantown, West Virginia Charleston, West Virginia Counsel for the Petitioner Matthew B. Hansberry, Esq.

Hansberry Law Office, PLLC Bridgeport, West Virginia Counsel for the Respondent

JUSTICE HUTCHISON delivered the Opinion of the Court.

CHIEF JUSTICE JENKINS and JUSTICE ARMSTEAD dissent and reserve the right to file separate opinions.

SYLLABUS BY THE COURT

1. “A circuit court’s entry of summary judgment is reviewed de novo.”

Syl. pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).

2. “Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review.” Syl. pt. 1, Appalachian Power Co. v. State Tax Dep’t of W. Va., 195 W. Va. 573, 466 S.E.2d 424 (1995).

3. Under the Wage Payment and Collection Act, West Virginia Code §§ 21-5-1(o) (2021) and 21-5-3 (2021), an “assignment of wages” is the transfer of the right to collect future wages from the wage earner to the employer. An assignment of wages is, in effect, any amount that an employer withholds from an employee’s wages that does not meet the Act’s definition of “deductions” in West Virginia Code § 23-5-1(g) (2021).

4. “Based on the legislative history of the Wage Payment and Collection Act, W.Va. Code, 21-5-1 et seq[.] [1979], compliance with all requirements of the Act is mandatory when assigning an employee’s wages.” Syl. pt. 4, Jones v. Tri-County Growers, Inc., 179 W. Va. 218, 366 S.E.2d 726 (1988).

5. “A circuit court is afforded wide discretion in determining whether or not a party should be relieved of a stipulation, and such decision should not be set aside absent an abuse of discretion.” Syl. pt. 6, W. Va. Dep’t of Transportation v. Veach, 239 W. Va. 1, 799 S.E.2d 78 (2017).

i

6. “An employee who succeeds in enforcing a claim under W. Va. Code Chapter 21, article 5 should ordinarily recover costs, including reasonable attorney fees unless special circumstances render such an award unjust.” Syl. pt. 3, Farley v. Zapata Coal Corp., 167 W. Va. 630, 281 S.E.2d 238 (1981).

7. “Where attorney’s fees are sought against a third party, the test of what should be considered a reasonable fee is determined not solely by the fee arrangement between the attorney and his client. The reasonableness of attorney’s fees is generally based on broader factors such as: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.” Syl. pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W. Va. 190, 342 S.E.2d 156 (1986).

ii

HUTCHISON, Justice:

In this appeal from the Circuit Court of Marion County, we consider a series of orders entered under the West Virginia Wage Payment and Collection Act, W. Va. Code § 23-5-1 to -18 (“the WPCA”). The Legislature designed the WPCA to require an employer to regularly pay employees their full wages and restrict an employer’s ability to withhold a portion of employees’ paychecks. In this appeal, we examine one such heavily regulated withholding: the authorized wage assignment. For an employee to properly assign wages to an employer, the WPCA specifies that there must be a writing that meets a list of conditions, and in the absence of any one of these conditions the assignment is invalid and unenforceable. For instance, the writing must identify the total amount due to and collectible by the employer through withholdings. The writing must contain statements that the assignment will not be in effect for more than one year and that three-fourths of the employee’s wages are exempt from the assignment. And, the writing must show the assignment was accepted and signed by the employer. See W.Va. Code § 21-5-3(e) (2021). Prior to June 17, 2021, the WPCA also required written assignments to be notarized. See W.Va. Code § 21-5-3(e) (2008, 2015, and 2018).

In the instant case, an employer made withholdings from the wages of its employees that met the WPCA’s definition of an assignment, but never procured from its employees a writing that complied with the conditions set in the WPCA. After an employee filed a class-action suit to recoup those withholdings, the employer entered into a written agreement stipulating to the method the circuit court would use to calculate certain

damages if the circuit court declared the withholdings violated the WPCA. Thereafter, the circuit court entered an order finding the employer liable for violating the WPCA. In light of the stipulations on damages, the circuit court later entered orders that awarded the employees the wages improperly taken from their paychecks, liquidated damages, attorney’s fees, and costs. The employer now appeals the circuit court’s orders.

As we discuss below, we find no error and affirm the circuit court’s rulings.

I. Factual and Procedural Background

Defendant Fairmont Tool, Inc., provides services to the oil and gas industry, often at the well pads of clients. Because of the hazardous nature of the work, the company requires employees to wear special equipment such as fire-retardant uniforms and safety boots. Fairmont Tool employs between 75 and 120 workers, depending on market demand. Plaintiff Adam J. Davis began working for Fairmont Tool in 2014 but, on January 3, 2017, Fairmont Tool terminated him from his employment.

On May 31, 2017, the plaintiff filed this lawsuit against Fairmont Tool. The plaintiff contended that Fairmont Tool unlawfully reduced his wages and the wages of other similarly situated employees, and he asked that the circuit court certify a class action. Specifically, he alleged that Fairmont Tool, in the five years prior to the filing of the

complaint, had improperly taken assignments in the form of paycheck deductions 1 for uniforms, boots, tools and other protective equipment in violation of the West Virginia Wage Payment and Collection Act (“the WPCA”). 2

Fairmont Tool quickly admitted to making reductions to employees’

paychecks. In an interrogatory, the plaintiff asked whether Fairmont Tool had subjected employees’ pay to deductions for uniforms, boots, or other protective equipment in the five years prior to the filing of the complaint. On August 21, 2017, Fairmont Tool answered that it

has and does make certain deductions from some of its employees’ paychecks where the employees have voluntarily agreed to participate in a uniform service provided by a third-

party vendor or have voluntarily charged boots or tools on Defendant’s account, and with Defendant’s consent, from a third-party vendor.

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Fairmont Tool, Inc. v. Adam J. Davis, Individually and on Behalf of Others Similarly Situated, (W. Va. 2021).

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