Paolini v. Albertson's Inc.

149 P.3d 822, 143 Idaho 547, 15 Wage & Hour Cas.2d (BNA) 1556, 2006 Ida. LEXIS 143
CourtIdaho Supreme Court
DecidedNovember 22, 2006
Docket32495
StatusPublished
Cited by30 cases

This text of 149 P.3d 822 (Paolini v. Albertson's Inc.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Paolini v. Albertson's Inc., 149 P.3d 822, 143 Idaho 547, 15 Wage & Hour Cas.2d (BNA) 1556, 2006 Ida. LEXIS 143 (Idaho 2006).

Opinions

EISMANN, Justice.

We have accepted questions of law certified by the Ninth Circuit Court of Appeals asking us whether stock options constitute wages under Chapter 6 of Title 45, Idaho Code, and whether terminating an employee for trying to exercise his right to receive wages violates Idaho’s public policy exception to at-will employment. We answer the first question in the negative, which renders the second question moot.

I. FACTS AND PROCEDURAL HISTORY

Brace Paolini was an employee of Albert-son’s, Inc. (Albertson’s) for seventeen years. During that time he received several thousand stock options issued pursuant to the Albertson’s Amended and Restated 1995 Stock-Based Incentive Plan (Plan). According to the Plan, a change in control of the company accelerated vesting of the stock options. In the summer of 2001, Paolini believed that a change in control had occurred, and he attempted to exercise his stock options based on accelerated vesting. The Administrator of Albertson’s, Inc.’s Stock-Based Incentive Plan (Plan Administrator) denied his request. For reasons that are disputed, Paolini later left his employment with Albertson’s. He subsequently filed an action in the Federal District Court for the District of Idaho seeking to recover damages against Albertson’s and the Plan Administrator. One of the claims he asserted was that Albertson’s discharged him for acting to exercise his stock options. He argued that this was a retaliatory discharge in violation of Idaho’s wage laws, public policy, and the covenant of good faith and fair dealing.

Both parties moved for summary judgment. The federal district court granted summary judgment to Albertson’s and the Plan Administrator and denied Paolini’s motions for summary judgment. He then appealed to the Ninth Circuit, which certified [549]*549questions of law in writing to us in order to resolve issues of law raised by Paolini on appeal. We accepted certification of those questions.

II. CERTIFIED QUESTIONS OF LAW

1. Can stock options be wages under Idaho Code §§ 45-601(7) and 45-613? If so, is it a factual issue as to whether the stock options were issued as wages, to be resolved by a factfinder?

2. If an employer fires an employee for trying to exercise his right to the receipt of wages, has the employer violated the public policy exception to at-will employment?

III. ANALYSIS

A. Can Stock Options Be Wages under Idaho Code §§ 45-601(7) and 45-613?

Claims for wages are governed by Chapter 6 of Title 45, Idaho Code. Section 45-601(7) defines wages as “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece or commission basis.” The statute does not define wages as including all forms of compensation. Latham v. Haney Seed Co., 119 Idaho 412, 807 P.2d 630 (1991) (approving Whitlock v. Haney Seed Co., 114 Idaho 628, 759 P.2d 919 (Ct.App.1988), which held that the term wages as it is defined in I.C. § 45-601(7) does not include a life insurance policy issued as part of the employment contract because it was not compensation that was earned in increments as services were performed). The issue we address now is whether compensation in the form of stock options constitutes wages under Chapter 6 of Title 45.

“The interpretation of a statute is a question of law over which we exercise free review.” McLean v. Mavenk Country Stores, Inc., 142 Idaho 810, 813, 135 P.3d 756, 759 (2006). “This Court must construe a statute to give effect to the intent of the legislature.” Carrier v. Lake Pend Oreille School Dist. # 84, 142 Idaho 804, 807, 134 P.3d 655, 658 (2006). “It must begin with the literal words of the statute; those words must be given their plain, usual, and ordinary meaning; and the statute must be construed as a whole.” McLean v. Mavenk Country Stores, Inc., 142 Idaho 810, 813, 135 P.3d 756, 759 (2006) (citations omitted). “Statutes that are in pari materia must be construed together to effect legislative intent. Statutes are in pari materia if they relate to the same subject.” City of Sandpoint v. Sandpoint Indep. Highway Dist., 139 Idaho 65, 69, 72 P.3d 905, 909 (2003) (citations omitted).

Idaho Code § 45-608(1) gives clarity to the legislature’s intent regarding the meaning of the word wages in Chapter 6 of Title 45. It states:

Employers shall pay all wages due to their employees at least once during each calendar month, on regular paydays designated in advance by the employer, in lawful money of the United States or with checks on banks where suitable arrangements are made for the cashing of such checks without charge to the employee. Nothing contained herein shall prohibit an employer from depositing wages due or to become due or an advance of wages to be earned in an account in a bank, savings and loan association or credit union of the employee’s choice, provided that the employee has voluntarily authorized such deposit. If the employee revokes such authorization for deposit, it shall be deemed terminated and the provisions herein relating to the payment of wages shall apply.

This statute requires employers to “pay all wages due to their employees at least once during each calendar month, on regular paydays designated in advance by the employer.” By its terms, it is not limited to wages earned during a calendar month or to wages that are normally paid every calendar month. It applies to wages due during the month. Wages earned over a longer period of time, such as an annual bonus based upon net profits, will come due during a specific calendar month and are covered by the statute.

This statute also requires that employers “shall pay all wages due to their employees ... in lawful money of the United States or with checks on banks where suitable arrangements are made for the cashing of such checks without charge to the employee” or by deposit into the employee’s account with his or her consent. (Emphasis added.) “The word shall, when used in a statute, is mandatory.” Goff v. H.J.H. Co., 95 Idaho [550]*550837, 839, 521 P.2d 661, 663 (1974). Thus, the employer does not have discretion to pay wages in a manner other than as directed by the statute. The manner of payment directed by the statute applies to “all wages due.” If all wages due must be paid in cash, with a check, or by deposit into the employee’s account, then the word wages

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Cite This Page — Counsel Stack

Bluebook (online)
149 P.3d 822, 143 Idaho 547, 15 Wage & Hour Cas.2d (BNA) 1556, 2006 Ida. LEXIS 143, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paolini-v-albertsons-inc-idaho-2006.