Nationwide Auto Transport
On March 7, 2003, Robert J. Kimmerle filed a claim with the Department of Labor and Industry contending that Nationwide Auto Transport Inc. had failed to pay him $4,779.39 wages due to him from a damage fund maintained by the employer during his employment. On April 23, 2003, the Wage and Hour Unit determined that Nationwide owed Kimmerle $5,000.00, and a statutory penalty. Nationwide appealed this determination on May 12, 2003. On August 5, 2003, the case was transferred to the Department's Hearings Bureau for hearing.
The hearing was conducted by telephone
on November 4, 2003. Kimmerle was present and testified. Peter T. Stanley,
attorney at law, represented Nationwide Auto Transport Inc. Scott Kimmerle,
Teri Spiker, Louis Kuchera, and Susan Kuchera also testified in the case.
Documents from the investigative file compiled by the Wage and Hour Unit
numbered 1, 6-8, 9- 11, 12-13, 31, 41, 43, 45, 46, 50, 51, 51a, 52-56,
57-73, 75-76, and 81-82 were admitted into evidence without objection,
except that respondent's failure to object to 9-11, the determination issued
The issue in this case is whether Nationwide Auto Transport, Inc., a Nevada corporation, owes wages for work performed, as alleged in the complaint filed by Robert J. Kimmerle, and owes a penalty, as provided by law. A full statement of issues is contained in the order governing hearing proceedings issued on October 28, 2003.
Based upon the testimony and exhibits in the case, the Hearing Officer makes the following:
III. FINDINGS OF FACT
1. Nationwide Auto Transport, Inc. (Nationwide) is a business established by Louis and Susan Kuchera to transport cars to their related automobile reconditioning and sales business. Louis Kuchera is the president of Nationwide and Susan Kuchera is the treasurer and secretary.
2. Kimmerle was an employee of Nationwide Auto Transport Inc. He worked as a truck driver to transport cars. He started his employment on or about August 17, 2000.
3. Prior to beginning employment, Kimmerle met with Louis Kuchera to discuss the terms of employment. After reaching agreement, the terms of Kimmerle's employment were put in writing. Louis Kuchera had the agreement typed up and Kimmerle signed it. It contained the following provisions:
4. The written agreement contained no provision for the disposition of the damage fund on termination of employment. However, Louis Kuchera told Kimmerle that the funds in the damage fund would be distributed to him on termination of employment.
5. Kimmerle quit working for Nationwide on February 28, 2003. During his approximately 2½ years of employment, he transported 1,567 cars without damage. Prior to January 2003, Nationwide deducted $10,891.61 from his damage fund account for damage to vehicles.
6. After he resigned, Kimmerle requested the balance remaining in the damage fund, which he calculated as $4,779.39. Nationwide declined to pay it. It charged the fund with additional charges of $293.60 to a 1998 Chevrolet Malibu and $4,660.19 to Kimmerle's truck resulting from a collision with a deer, leaving a negative balance in the account of -$174.40.
7. Nationwide deducted $42.00 from Kimmerle's paycheck of February 18, 2003 for his share of the February insurance premium.
IV. DISCUSSION AND ANALYSIS(1)
Montana law requires that employers pay employees wages when due in accordance with the employment agreement, and in any event not more than 15 days following the separation from employment. Mont. Code Ann. §§ 39-3-204 and 39-3-205. Except to set a minimum wage, the law does not set the amount of wages to be paid. That determination is left to the agreement between the parties. "Wages" include any money due from an employer to an employee, including bonuses and commissions. Mont. Code Ann. § 39-3-201(6); Delaware v. K-Decorators, Inc., 1999 MT 13, 293 Mont. 97, 104-105, 973 P.2d 818.
Kimmerle contends that Nationwide owes him $4,779.39, which was the balance of the damage fund provided for in his employment agreement at the end of his employment. Nationwide contends it never agreed to pay Kimmerle the amount in the damage fund, that even if it did, he never became entitled to it because it did not reach the $5,000.00 level, and that the damages attributable to Kimmerle at the end of his employment offset any remaining balance.
Based on the employment agreement, the damage fund established by Nationwide was compensation to be paid to Kimmerle. Despite the testimony of the Kucheras to the contrary, the written agreement prepared by Louis Kuchera and signed by Kimmerle states that Kimmerle "will receive $5.00 for each car loaded with no damage and $5.00 for each car unloaded with no damage for a maximum of $10.00 per vehicle" (emphasis added). The use of the phrase "will receive" means that it is to be paid to Kimmerle, and is therefore wages. Although Kuchera testified that the fund was intended to establish an incentive for employees to minimize damage to vehicles and was never intended to be compensation to the driver, this characterization is not consistent with the plain language of the employment agreement.
The fact that the amount in the fund never reached $5,000.00 is not relevant to the question of whether Kimmerle was entitled to the balance of the fund on termination of employment. The employment agreement provided that once the amount in the fund reached $5,000.00, the driver could draw $10.00 per car as pay. Although the language is not a model of clarity, it appears to contemplate a bonus of $10.00 per car on a current basis rather than making further deposits to the damage fund. It does not provide that the driver will never be entitled to the amount in the fund.
Further, if the terms of the agreement could be construed to divest Kimmerle of wages he had earned because he never reached the $5,000.00 level, such a condition would be a condition subsequent to Kimmerle's entitlement to previously earned wages. The Montana Supreme Court has held such a condition subsequent to illegally divest employees of earned vacation leave, and the requirement to reach a balance of $5,000.00 has the same effect in this case. In re the Wage Claim of Sharon Langager v. Crazy Creek Products, Inc., 1998 MT 44, 287 Mont. 445, 455-56, 954 P.2d 1169. Nationwide cannot divest Kimmerle of his earned wage by placing such a condition on it.
The agreement is ambiguous as to the disposition of amounts in the damage fund on termination of employment. The intent of the parties must therefore be determined from their testimony. Kimmerle credibly testified that Louis Kuchera told him that the balance in the fund would be his at the termination of employment. Although this testimony was disputed, Kimmerle's version was consistent and reasonable. Further, for reasons discussed below, Nationwide's practice of deducting damages from the earnings of its drivers is illegal. Despite this fact, Kimmerle did not seek to recover amounts deducted from his earning which he believed to be consistent with his employment agreement. For these reasons, I credit Kimmerle's testimony that Louis Kuchera told him the balance in the fund would be his, rather than Kuchera's testimony to the contrary. Therefore, Kimmerle was entitled to the balance of the fund on termination of employment.
Further, Nationwide cannot deduct the damages to the 1998 Chevrolet and to the truck from the damage fund. Kimmerle contended that the employment agreement contemplated only deductions for damage to the vehicles being transported, as opposed to other damage. It is unnecessary to reach the question of the meaning of this aspect of the employment agreement, however, because Nationwide's practice of deducting damages from Kimmerle's earnings violates Montana's wage payment laws.
Mont. Code Ann. § 39-3-204(1) provides:
This statute prohibits an employer from
withholding an employee's wages and applying them toward damages caused
by employee negligence, notwithstanding the fact that the employee contractually
agreed to the deduction. 36 Mont. A.G. Op. 17 (1975); see also Christiansen
v. Taylor Brothers, Inc. (1987), 225 Mont. 318, 732 P.2d 841. An agreement
which violates Mont. Code Ann. § 39-3-204(1) is void. Mont. Code Ann. § 39-3-208.
Having agreed to pay Kimmerle $10.00 for each car he transported without
damage, Nationwide could not deduct any damage amounts from those wages.
Therefore, Nationwide owed Kimmerle the balance that remained in the fund
without reduction for any damage.(2)
By: /s/ ANNE L. MACINTYRE
Anne L. MacIntyre, Chief
If there is no appeal filed and no payment is made pursuant to this Order,
the Commissioner of the Department of Labor and Industry will apply to
the District Court for a judgment to enforce this Order pursuant to Mont.
Code Ann. § 39-3-212, MCA. Such an application is not a review of
the validity of this Order.
1. Statements of fact in this opinion are hereby incorporated by reference to supplement the findings of fact. Coffman v. Niece (1940), 110 Mont. 541, 105 P.2d 661.
2. Based upon the law and the employment agreement, Kimmerle would have been entitled to $15,670.00, $10.00 for each car he transported without damage. He made it clear in prehearing proceedings and at hearing that he sought to recover only the portion remaining in the damage fund at the end of his employment. Therefore, this decision awards only the wages claimed, plus statutory penalties.
3. Louis Kuchera also testified that a representative of the Montana Department of Revenue conducted an audit of Nationwide and told the employer that the damage fund arrangement was legal. The Department of Revenue has no involvement with enforcement of wage payment laws, and its representatives have no expertise in this area.
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