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339 P.3d 963
Wash.
2014
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Background

  • Shaun LaCoursiere was a CamWest project manager who received discretionary after-tax bonuses; his employment agreement directed 56% of each bonus to be paid directly into CamWest Managers LLC (LLC) as capital, with 44% to him.
  • LaCoursiere became an LLC member; units vested 20% per year. Upon termination for cause, unvested units were sold and member could receive only vested portion; CamWest (and others) had purchase rights under the LLC agreement.
  • CamWest terminated LaCoursiere before full vesting (he was 60% vested); he received payment for vested units but sued under Washington’s Wage Rebate Act (WRA), RCW chapter 49.52, claiming the bonus contributions were wages rebated back to his employer.
  • Trial court granted summary judgment for CamWest; Court of Appeals affirmed summary judgment but awarded attorney fees to CamWest under the employment agreement; this Court granted review.
  • The Supreme Court held the paid bonuses were "wages" but there was no unlawful rebate because the funds went to the separate LLC (not CamWest or its agent); it reversed the award of attorney fees to CamWest because WRA authorizes fees only for prevailing employees.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether bonuses already paid for work are "wages" under the WRA Bonuses paid for work are compensation due by reason of employment and thus are wages Bonuses are discretionary and not necessarily wages Held: Bonuses paid for work are wages under the WRA
Whether the LLC contributions constituted an unlawful "rebate" to the employer or its agent The bonus payments, though paid, were funneled back to employer via the LLC and thus rebated wages Contributions went to a separate LLC, not the employer or its agent, so no rebate occurred Held: No rebate — funds went to LLC, not CamWest or its agent
Whether forfeiture of unvested LLC units upon termination is a prohibited rebate Forfeiture equates to employer recouping wages through the LLC structure Forfeiture followed an agreed vesting schedule; units and proceeds belonged to the LLC, not employer; purchaser of unvested units could be members other than CamWest Held: Forfeiture of unvested interest did not establish a rebate; summary judgment for employer affirmed
Whether defendant is entitled to attorney fees under the employment agreement Employment agreement’s prevailing-party clause allows CamWest to recover fees WRA authorizes attorney fees only to prevailing employees; contractual fee clause cannot override statutory scheme Held: CamWest not entitled to fees; award reversed and trial court order denying fees reinstated

Key Cases Cited

  • Ellerman v. Centerpoint Prepress, Inc., 143 Wn.2d 514 (2001) (WRA’s remedial purpose to protect employee wages from employer diminishment)
  • Schilling v. Radio Holdings, Inc., 136 Wn.2d 152 (1998) (WRA construed liberally to protect wages)
  • State v. Carter, 18 Wn.2d 590 (1943) (definition of rebate and protective purpose of WRA)
  • Rekhter v. Dep’t of Soc. & Health Servs., 180 Wn.2d 102 (2014) (party claiming improper wage practice must show recipient was agent with control over wage payment)
  • Flower v. T.R.A. Industries, Inc., 127 Wn. App. 13 (2005) (bonuses due by reason of employment qualify as wages)
  • Brown v. MHN Gov’t Servs., Inc., 178 Wn.2d 258 (2013) (statutory fee-shifting for employees can render contractual reciprocal fee clauses unconscionable)
  • Powell v. Republic Creosoting Co., 172 Wash. 155 (1933) (longstanding practice of bonus payments can make future bonuses part of compensation)
Read the full case

Case Details

Case Name: LaCoursiere v. CamWest Development, Inc.
Court Name: Washington Supreme Court
Date Published: Oct 23, 2014
Citations: 339 P.3d 963; 181 Wash. 2d 734; No. 88298-3
Docket Number: No. 88298-3
Court Abbreviation: Wash.
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    LaCoursiere v. CamWest Development, Inc., 339 P.3d 963