Knoppers v. Rumford Community Hospital

531 A.2d 1276, 28 Wage & Hour Cas. (BNA) 1417, 1987 Me. LEXIS 837
Supreme Judicial Court of Maine·Decided October 9, 1987·Published·Cited by 6 cases

Opinion

SCOLNIK, Justice.

The defendants, Rumford Community Hospital (“the hospital”), and Ashley O’Brien appeal from a judgment of Superi- or Court (Oxford County) awarding the plaintiff, Jan Knoppers, a practicing physician, wrongfully withheld wages, liquidated damages, costs and attorney’s fees pursuant to 26 M.R.S.A. § 626 (Pamph.1986),1 [1277] and from a supplemental judgment specifying the amount of those costs and attorney’s fees. The defendants contend that the Superior Court erred in finding that Knoppers was an employee of the Rumford Community Hospital and that the compensation withheld constituted wages within the meaning of section 626. We agree that Knoppers is not an “employee” covered by section 626.

I.

Knoppers rendered professional and administrative services for the hospital from January, 1981 through June 11, 1985. Defendant O’Brien was the Executive Director of the hospital. Knoppers had entered into a contract with the hospital for services under which he received a sum of $64,680 for a twelve-month period, plus an additional $1,000 a year to serve as the Director of the hospital’s Emergency Department. These sums were paid to Knop-pers in equal monthly installments on accounts payable vendor checks rather than payroll checks. He established his own working hours; he did not receive overtime pay and the hospital did not tell him how to practice medicine. The hospital paid for Knoppers’ Blue Cross/Blue Shield coverage and his life and accidental death and dismemberment insurance under its employees’ plan. He was eligible for employee rates in the hospital cafeteria as well. Knoppers paid his own income tax and social security contributions, however, and contributed to his own Keogh retirement plan.

On February 14, 1985, O’Brien informed Knoppers that a new Director of the Emergency Department had been appointed, effective February 16, 1985. As required by Knoppers’ contract with the hospital, O’Brien sent him a letter on February 26, giving him ninety days’ notice of the hospital’s intent to terminate, and stating an intent to renegotiate the contract. On May 24,1985, the day before Knoppers’ contractual obligations were to end, he and O’Brien orally agreed that he would work through the middle of June, 1985. On June 11, 1985, he was discharged.

This litigation arose as a result of allegations by Knoppers that compensation to which he was entitled was wrongfully withheld by the hospital. In accordance with the contract between the parties, the hospital paid Knoppers’ malpractice insurance premiums. On March 29,1985, the hospital paid a premium of $7,258 to the St. Paul Insurance Company for Knoppers’ malpractice coverage for the period of January 1, 1985 to December 31, 1985.

At the time of Knoppers’ discharge, the hospital deducted a total of $3,669 from two of his last paychecks. This amount represented the anticipated return premium for the period following Knoppers’ termination to the policy termination date of December 31, 1985. The hospital attributes this deduction to its mistaken belief that the insurance company was technically required to pay the return premium to Knoppers.

The hospital was later informed by St. Paul that it would reimburse the unused portion of the premium in the sum of $3,669 directly to the hospital. St. Paul subsequently allowed the hospital to use the $3,669 as a credit to offset other amounts owed by the hospital to St. Paul. Although the hospital received this credit from St. Paul, it did not return to Knoppers the $3,669 it had deducted from his paychecks. Knoppers then filed a complaint pursuant to 26 M.R.S.A. § 6262 and § 626-A3 (Pamph.1986) claiming that the $3,669 had been wrongfully deducted from his paychecks and withheld.

The Superior Court found that Knoppers was an “employee” of the hospital within [1278] the meaning of section 626, and that the hospital had wrongfully withheld from him the sum of $3,669. Accordingly, the court awarded Knoppers $3,669 plus 8% interest, $7,338 as liquidated damages, costs and reasonable attorney’s fees. In a supplemental judgment the Superior Court specified that the plaintiff was entitled to $4,410 in attorney’s fees and $771.67 in costs.

II.

We approach the issue in this case by relying on the sound principle of statutory construction that absent a legislative definition, the term “employee” “must be given a meaning consistent with the overall statutory context, and be construed in the light of the subject matter, the purpose of the statute, the occasion and necessity for the law, and the consequences of a particular interpretation.” Town of Arundel v. Swain, 374 A.2d 317, 321 (Me.1977) (quotations and citations omitted). See Lakes Environmental Ass’n v. Town of Naples, 486 A.2d 91, 95 (Me.1984). As Judge Learned Hand explained in Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir.1934), aff'd, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935), “the meaning of a [statute] may be more than that of the separate words, as a melody is more than the notes, and no degree of particularity can ever obviate recourse to the setting in which all appear, and which all collectively create.”

The “setting” or context that sheds light on the meaning and intent of the term “employee” in section 626 is the legislative history and derivation of that section.

Section 626 derives from P.L.1911, ch. 39, “An Act to provide for the Weekly Payment of Wages.” After some minor amendments, that act was codified in R.S. ch. 49, § 34 (1916) and again in R.S. ch. 30, § 50 (1954), which provided:

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Knoppers v. Rumford Community Hospital, 531 A.2d 1276, 28 Wage & Hour Cas. (BNA) 1417, 1987 Me. LEXIS 837 (Me. 1987).

531 A.2d 1276 (Knoppers v. Rumford Community Hospital) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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