Raymond Brown, on behalf of Himself and All Others Similarly Situated v. Bucher and Christian Consulting, Inc., d/b/a BCforward
87 N.E.3d 22
| Ind. Ct. App. | 2017Background
- Brown worked for BC forward from December 2013 to March 1, 2016 under an employment agreement paying a $36,000 annual salary plus monthly “Incentive Compensation” and commissions, both paid ~45 days after month earned; first six months included a guaranteed $500 monthly incentive.
- Brown resigned March 1, 2016 and filed a putative class action March 28, 2016 under Indiana’s Wage Payment Statute (I.C. § 22-2-5-1 et seq.), alleging intermittent violations of the statute’s Ten-Day Rule for salary payments and individually claiming unpaid commissions after termination.
- BC forward moved for partial judgment on the pleadings, arguing (1) all salary wages had been paid so no recoverable unpaid wages under current statute, and (2) the Incentive Compensation/commissions are not “wages” under the statute.
- Trial court granted partial judgment: dismissed class Wage Payment claims because Brown had received all salary wages and the 2015 statutory amendment limited recovery to unpaid wages; and held commissions/incentives are not “wages.” Brown appealed.
- The Court of Appeals reviewed de novo, addressed retroactivity of the 2015 amendment, concluded the amendment is remedial and applicable retroactively, and affirmed dismissal of the Wage Payment claims and the finding that commissions/incentives are not wages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff can recover attorney fees, costs, and liquidated damages under Section 2 when salary payments, though sometimes late relative to Ten-Day Rule, were ultimately paid | Brown: statutory damages and fees available for Ten-Day violations even if wages ultimately paid | BC forward: current version limits recovery to unpaid wages; Brown has no unpaid wages | Court: Held for BC forward — because Brown has no unpaid wages, he cannot recover fees/liquidated damages under current §22-2-5-2 |
| Whether the 2015 amendment to §22-2-5-2 applies retroactively | Brown: argued retroactive application barred by vested rights/constitutional concerns | BC forward: amendment is remedial and should apply retroactively; it reduces penalty exposure | Court: Held amendment remedial and applicable retroactively; no vested right to punitive pre-judgment damages |
| Whether commissions and Incentive Compensation are “wages” under the Wage Payment Statute | Brown: commissions/incentives are wages subject to the statute (and some incentives were guaranteed early on) | BC forward: payments contingent on facts outside employee control, not tied to time worked, not regularly payable, and paid in addition to salary — thus not wages | Court: Held for BC forward — commissions and incentives are not wages under the statute based on Bragg factors |
| Whether guaranteed $500 monthly incentive for first six months converts those payments into “wages” | Brown: guaranteed payments equate to wages because entitlement required only showing up | BC forward: (implicit) argument that issue not preserved and payments form of incentive, not statutory wages | Court: Held Brown waived argument by not raising it below; Court did not decide merits |
Key Cases Cited
- Veolia Water Indianapolis, LLC v. Nat’l Trust Ins. Co., 3 N.E.3d 1 (Ind. 2014) (standard for Judgment on the Pleadings)
- KS&E Sports v. Runnels, 72 N.E.3d 893 (Ind. 2017) (pleadings review and de novo statutory interpretation)
- Valadez v. R.T. Enters., Inc., 647 N.E.2d 331 (Ind. Ct. App. 1995) (prior version allowed recovery for late-paid wages even if ultimately paid)
- Bourbon Mini-Mart, Inc. v. Gast Fuel & Servs., Inc., 783 N.E.2d 253 (Ind. 2003) (retroactivity rules for remedial statutes)
- GHPE Holdings, LLC v. Huxley, 69 N.E.3d 513 (Ind. Ct. App. 2017) (Wage Payment Statute characterized as penal)
- City of Lawrence Utils. Serv. Bd. v. Curry, 68 N.E.3d 581 (Ind. 2017) (purpose of Wage Payment Statute to prevent employers from withholding wages)
- Bragg v. Kittle’s Home Furnishings, Inc., 52 N.E.3d 908 (Ind. Ct. App. 2016) (factors to determine whether commissions qualify as "wages")
- Thomas v. H & R Block E. Enters., Inc., 630 F.3d 659 (7th Cir. 2011) (factors used in assessing commission-classification issues)
- Cheatham v. Pohle, 789 N.E.2d 467 (Ind. 2003) (no vested right to prejudgment punitive damages)