772 S.E.2d 36
W. Va.2015Background
- Citynet created a non‑qualified "Employee Incentive Plan" (2008) that awarded annual "Performance Units"; Toney was notified he was 100% vested and had a stated vested balance (Aug. 4, 2010 letter).
- Toney voluntarily resigned on October 12, 2011 and requested to redeem his entire vested balance; Citynet refused, citing Plan §5.7(b) (May 1–Aug 31 redemption window; 20% annual limit).
- Toney sued in Kanawha County seeking payment of the vested balance and WPCA remedies. The circuit court granted partial summary judgment for Toney, held the Plan was enforceable as a unilateral contract, applied the West Virginia Wage Payment and Collection Act (WPCA), awarded $87,000.48 plus treble damages and fees, and set interest to begin 90 days after the redemption request.
- Citynet moved under Rules 59(e)/60(b), arguing (among other things) that Toney already had received $17,400.10 from the account; the circuit court denied relief.
- The West Virginia Supreme Court affirmed the holdings that the Plan is an enforceable unilateral contract and that the WPCA applies, but (1) reversed the start date for prejudgment interest (interest must accrue from the next regular payday after resignation, not after 90 days), and (2) reduced the award to offset the $17,400.10 Toney previously received (final vested award: $69,600.38; treble damages: $208,801.14).
Issues
| Issue | Toney's Argument | Citynet's Argument | Held |
|---|---|---|---|
| Whether the Plan is a contract enforceable by Toney | Plan is a unilateral contract: Citynet offered vested units that Toney accepted by continued service | Plan is discretionary bonus; Board has sole interpretive authority and could limit payments | Plan is an enforceable unilateral contract; court may interpret it as written (affirmed) |
| Whether voluntary resignation entitled Toney to full redemption vs. §5.7(b) limits | §5.7(a) permits redemption of vested units upon termination "without cause," and Plan examples and §5.6(b) show voluntary resignation permits full redemption | §5.7(b) limits voluntary redemptions to 20% during May–Aug and voids outside that window | §5.7(a) applies to voluntary resignations; Toney entitled to redeem full vested balance (affirmed) |
| Whether WPCA applies to vested Performance Units and timing of payment | Vested units are "fringe benefits" and thus "wages" under WPCA; employer must pay timely and is liable for treble damages and fees if it fails | Plan's 90‑day payout schedule governs timing and removes WPCA coverage | Vested units are wages under WPCA; Citynet violated WPCA and treble damages/fees apply; but Plan's 90‑day payout cannot supersede WPCA timing rule (affirmed in part) |
| Proper accrual date for statutory interest and correct award amount | Interest should run from WPCA‑mandated payday; award must be offset by amounts already paid to avoid windfall | Interest should begin after Plan's 90‑day payout period; no offset because motion was untimely | Interest accrues from the next regular payday after resignation (not 90 days); award reduced by $17,400.10 (partial reversal) |
Key Cases Cited
- Cook v. Heck's Inc., 176 W.Va. 368 (1986) (employee handbook/bonus promises can create enforceable unilateral contracts)
- Meadows v. Wal‑Mart Stores, Inc., 207 W.Va. 203 (1999) ("then accrued" fringe benefits are vested benefits; entitlement determined by terms of employment)
- Britner v. Medical Security Card, Inc., 200 W.Va. 352 (1997) (employer may not avoid WPCA timing rules by private agreement or estoppel)
- Adkins v. American Mine Research, Inc., 234 W.Va. 328 (2014) (whether a fringe benefit is a "wage" payable under WPCA is governed by the terms of the employment agreement or consistently applied policy)
- Painter v. Peavy, 192 W.Va. 189 (1994) (standard: appellate review of summary judgment is de novo)