Cooper v. Alsco, Inc.
186 Wash. 2d 357
| Wash. | 2016Background
- Alsco Inc. supplies and services linens, uniforms, washroom/hygiene products, and sells janitorial goods to businesses; goods are not resold by customers.
- Some Alsco delivery employees are paid primarily by commission (commission >50% of pay) and receive no extra overtime pay for hours over 40.
- A class of commissioned employees sued under Washington’s Minimum Wage Act (MWA), seeking overtime; parties filed cross-motions for summary judgment.
- Trial court held Alsco was not a "retail or service establishment" (RSE) and awarded summary judgment to employees on entitlement to overtime; later calculated regular rate by dividing weekly pay by 40 hours.
- Washington Supreme Court accepted direct review and reversed: held Alsco is an RSE under RCW 49.46.010(6), so the commission-based overtime exemption applies; remanded for judgment for Alsco.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Alsco is a "retail or service establishment" under RCW 49.46.010(6) | ALSCO’s sales are to businesses under long-term contracts and lack a retail concept, so not "retail" | Alsco’s transactions are taxed as retail, are "end of the line" (not for resale), and thus qualify as retail/service in the industry | Alsco is an RSE: statutory retail-sales-tax treatment and end-of-line nature control; sales to businesses can be retail |
| Whether the trial court correctly computed the regular rate by dividing weekly compensation by 40 | Employees: regular rate should be computed using all hours actually worked | Alsco: exemption applies so overtime not owed; calculation unnecessary if RSE applies | Court did not reach detailed calculation because RSE finding disposes of overtime entitlement; reversed trial court and remanded for judgment for Alsco |
Key Cases Cited
- Stahl v. Delicor of Puget Sound, Inc., 148 Wn.2d 876, 64 P.3d 10 (Wash. 2003) (analyzes whether sales are "recognized as retail" and factors including retail-sales-tax treatment and end-of-line sales)
- Alvarado v. Corporate Cleaning Servs., Inc., 782 F.3d 365 (7th Cir. 2015) (business-to-business services can qualify as retail where the purchaser is the ultimate user)
- Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190 (U.S. 1966) (discusses limits on retail classification under historical FLSA rules; distinguishes quantity/discount exceptions)
- Martino v. Michigan Window Cleaning Co., 327 U.S. 173 (U.S. 1946) (historic FLSA discussion of retail/service classification)
- Schultz v. Crotty Bros. Tex., 310 F. Supp. 761 (E.D. Tex. 1970) (discusses post-1949 broadened retail-sales definition allowing business-to-business sales to qualify)
- Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 93 P.3d 108 (Wash. 2004) (collective-bargaining agreements do not permit employers to evade MWA requirements)