Thomas v. H & R Block Eastern Enterprises, Inc.
630 F.3d 659
| 7th Cir. | 2011Background
- Thomas, a seasonal Tax Professional II at H&R Block (2004–2007), earned hourly wages plusEOS eligibility based on a calculation with multiple components.
- EOS was paid only if the aggregate EOS-eligible amounts exceeded Thomas’s hourly wages, with explicit timing to pay after the season (May) and “as soon thereafter as is reasonable.”
- Payroll for EOS involved processing and reconciliation timelines that extended beyond ten days after earnings, with payments issued in May for the prior tax season.
- Indiana’s Wage Payment Statute requires wages to be paid within ten days after they are earned; EOS was paid later, creating potential liquidated damages if deemed wages.
- Indiana law uses multiple factors to determine if a bonus/compensation is a wage, including contingency, relation to time worked, regularity, and whether it is in addition to wages; the district court and the Seventh Circuit applied these factors to conclude EOS was not a wage.
- Thomas sought class certification and certification was denied; the court ultimately affirmed summary judgment for H&R Block.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is EOS compensation a wage under Indiana law? | Thomas: EOS is a wage because it is a commission-based component. | H&R Block: EOS is not a wage due to contingencies, lack of time-work linkage, and annual payment. | EOS is not a wage under Indiana law. |
| Do the ten-day payment requirements apply if EOS is not a wage? | If EOS counts as wages, it should have been paid within ten days. | EOS is not wages, so the ten-day rule does not apply. | Ten-day rule does not apply because EOS is not a wage. |
| Whether to certify the question to the Indiana Supreme Court | Thomas asks for certification on whether EOS is a wage. | Court should not certify given case-specific facts and existing Indiana guidance. | The court declined to certify. |
Key Cases Cited
- Highhouse v. Midwest Orthopedic Inst., P.C., 807 N.E.2d 737 (Ind. 2004) (test for when a bonus is a wage (time worked vs contingency) and timing feasibility)
- Naugle v. Beech Grove City Schs., 864 N.E.2d 1058 (Ind. 2007) (contingency-based and time-related factors in wage determination)
- Hansen v. 874 N.E.2d 1072, 874 N.E.2d 1072 (Ind. Ct. App. 2009) (contingency and timing considerations in calculating wages)
- Gress v. Fabcon, Inc., 826 N.E.2d 1 (Ind. Ct. App. 2005) (monthly pay with commissions not necessarily wages due to timing/amount linkage)
- Nichols (Prime Mortgage USA, Inc. v. Nichols), 885 N.E.2d 628 (Ind. Ct. App. 2008) (commissions as wages when sole compensation and immediately calculable; otherwise not)
- J Squared, Inc. v. Herndon, 822 N.E.2d 633 (Ind. Ct. App. 2005) (recognizes commissions may be wages in some contexts)
- Harney v. Speedway SuperAmerica, 526 F.3d 1099 (7th Cir. 2008) (contingencies tied to performance can affect wage characterization)
- Kopka, Landau & Pinkus v. Hansen, 874 N.E.2d 1065 (Ind. Ct. App. 2007) (emphasizes substance over label in wage determination)