Potvin v. Wright's Sound Gallery, Inc.Potvin v. Wright's Sound Gallery, Inc.
The defendant, Wright‘s Sound Gallery, Inc., appeals a judgment in favor of the plaintiff, Dennis Potvin, a former employee of the defendant, for unpaid wages, penalties, and attorney fees pursuant to
Wright‘s Sound Gallery is a corporation operating an electronics store, the stock in which is owned by Thomas and Brenda Bartle; the store both sells and services
Potvin gave Mr. and Mrs. Bartle written notice of his resignation on April 4, 1988, but remained employed by Wright‘s until April 13. On Potvin‘s final day of employment, he received a paycheck which comprised only his base salary. On April 18, 1988, Potvin made written demand upon Wright‘s through Mrs. Bartle for $952.30, the monetary value of a two-week paid vacation, and $192.04, ten percent of the service labor performed between April 1-13, 1988. Two checks, one in each of the requested amounts, were issued to Potvin by Mrs. Bartle on April 19, 1988. Prior to their being cashed, the defendant issued a stop payment order on both of the checks.
Potvin then initiated the instant lawsuit, seeking his unpaid commissions and vacation pay, plus the statutory penalties and attorney fees provided in
Following a bench trial, the trial court held for the plaintiff and rejected the reconventional demand. The trial court resolved all factual disputes in Potvin‘s favor. A judgment was signed awarding Potvin $192.04 in unpaid commissions, $952.30 in vacation entitlements, $11,206.80 in penalties, $4,500.00 in attorney fees, plus interest and costs.
The issues raised by this appeal are (1) whether the trial court erred in finding Potvin was entitled to unpaid commissions; (2) whether the trial court erred in finding Potvin was entitled to vacation benefits; (3) whether the trial court erred in finding Wright‘s was not in good faith in withholding these payments and thereby awarding penalties to Potvin; (4) whether, assuming they were appropriate, the trial court erred in calculating the penalties; (5) whether the trial court erred in awarding attorney fees; and (6) whether the trial court erred in dismissing Wright‘s unfair trade practices claim.
We note at the outset that several of the issues presented involve factual determinations. Our review is therefore guided by the mandate that an appellate court may not set aside a trial court‘s finding of fact in the absence of manifest error or unless it is clearly wrong. Hence, where there is a conflict in testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed on appeal. Rosell v. ESCO, 549 So.2d 840 (La.1989); Arceneaux v. Domingue, 365 So.2d 1330 (La.1978).
The original demand was brought pursuant to
§ 631. Discharge or resignation of employees; payment within three days after termination of employment
A. Upon the discharge or resignation of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, not later than three days following the date of discharge or resignation....
§ 632. Liability of employer for failure to pay; attorney fees
Any employer who fails or refuses to comply with the provisions of R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee‘s daily rate of pay, or else for full wages from the time the employee‘s demand for
payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages. Reasonable attorney fees shall be allowed the laborer or employee by the court which shall be taxed as costs to be paid by the employer, in the event a well-founded suit for any unpaid wages whatsoever be filed by the laborer or employee after three days shall have elapsed from time of making the first demand following discharge or resignation.
The preliminary question, therefore, is whether the commission and vacation benefits were due at the time of Potvin‘s resignation under the terms of his employment.
TEN PERCENT COMMISSION
Commissions are considered wages for purposes of
There is no dispute that the terms of Potvin‘s employment guaranteed him a ten percent commission on the service labor invoices and that from April 1-13, 1988 this commission totaled $192.04. Wright‘s argues, however, that because Potvin engaged in secondary employment without his employer‘s consent that Potvin violated his employment contract and, based upon Wright‘s interpretation of the contract, gave Wright‘s the authority to terminate Potvin without pay.
Potvin signed a document entitled “Employee Agreement” on May 2, 1985. Paragraph 7 of this document states that an employee may have no secondary employment unless cleared through the management. Paragraph 14 of the same document provides the sanctions for an employee‘s failure or refusal to abide by any of the employment regulations. Paragraph 14 provides: “I agree to abide by the above rules and I understand that observance of them is a condition of my continued employment. I understand that continued refusal to adapt to and to enforce company policy will be grounds for dismissal or suspension without pay.”
Wright‘s interprets the phrase “without pay” as modifying both “dismissal” and “suspension.” In other words, Wright‘s argues it was entitled to either suspend Potvin without pay or to dismiss him without pay. A second equally reasonable interpretation of this language is that Wright‘s could either dismiss Potvin or suspend him without pay—the language “without pay” modifying only “suspension” and not “dismissal.” It is well-settled that any ambiguity in a contract is to be construed against the party who prepared the contract. Kenner Industries, Inc. v. Sewell Plastics, Inc., 451 So.2d 557 (La.1984); Citizens Bank and Trust Company v. Robertson, 482 So.2d 867 (La.App. 2d Cir.1986), writ denied, 486 So.2d 754 (La.1986). The employment agreement in the instant case was prepared by Wright‘s and thus must be construed against them. We further note that Wright‘s interpretation of the employment contract to allow discharge without pay would render that contract unlawful under
VACATION BENEFITS
A document entitled “Employee Benefits” sets out Wright‘s vacation policy. An employee with between two and five years employment at Wright‘s, such as Potvin, was entitled to two weeks paid vacation per year. There is no dispute that Potvin had accrued two weeks vacation at the time of his resignation. Nevertheless, Wright‘s argues that based upon an unwritten company policy prohibiting remuneration for an unused vacation, Potvin forfeited his vacation benefits by not taking his vacation prior to resignation. In support of this position, Wright‘s presented testimony from Mr. and Mrs. Bartle and three current Wright‘s employees that the policy at Wright‘s was either to take a vacation during the applicable year or to lose such vacation benefits. Potvin testified that he knew nothing of this policy; he had taken his vacation every year during his employment at Wright‘s.
Vacation pay, like commissions, is considered to be wages for the purpose of
As we have noted, while this circuit has considered vacation pay to be wages under
PENALTIES
The question of Wright‘s good faith in failing to timely pay the wages due Potvin is again a factual question. Although Wright‘s has alleged numerous bases which might reasonably have supported a determination that Wright‘s was in good faith, we do not find the trial court was
Wright‘s raises a further argument concerning the penalty wages, asserting that the trial court erred in calculating them.
ATTORNEY FEES
Wright‘s acknowledges that attorney fees are recoverable in any well-founded suit for unpaid wages, regardless of whether or not there existed a good faith dispute. Carriere v. Pee Wee‘s Equipment Company, supra; Thomas v. Maxwell Hardware & Lumber Co., supra. In light of our conclusions that the commission, vacation benefits, and penalty wages were all due, the imposition of an attorney fee award was appropriate.
RECONVENTIONAL DEMAND
The trial court found that Wright‘s failed in its burden of proof on the reconventional demand. Potvin admitted at trial that he had been moonlighting during his employment at Wright‘s. However, Potvin denied soliciting business from Wright‘s. A court must balance a former employee‘s right to leave his employ to open a business competitive with that of his former employer against the employer‘s right to fair play. Core v. Martin, 543 So.2d 619 (La.App. 2d Cir.1989); Huey T. Littleton Claims Service, Inc. v. McGuffee, 497 So.2d 790 (La.App. 3rd Cir.1986). Where the former employee did not solicit customers or divert business from his former employer prior to the end of the employment relationship and there has been no showing that the former employee intended to injure his former employer‘s business, an unfair trade practices claim is properly denied. Core v. Martin, supra. On this record and considering the trial court‘s specific credibility evaluations, we cannot say that the trial court committed manifest error in determining that the actions of the plaintiff in moonlighting after hours constituted an unfair trade practice within the meaning of
This case is distinguishable from that relied upon by Wright‘s. In Dufau v. Creole Engineering, Inc., 465 So.2d 752 (La.App. 5th Cir.1985), writ denied, 468 So.2d 1207 (La.1985), the plaintiff, Dufau, was employed by Creole as a salesman of mechanical products. Dufau filed suit for unpaid wages following his resignation from Creole. Creole reconvened alleging Dufau had solicited and diverted business from Creole for his own company while still employed by Creole. The trial court granted
In the instant case, there was no evidence presented of a solicitation and diversion of Wright‘s customers by Potvin. We also note that unlike Dufau, Potvin did not open his own electronics repair business until he had left Wright‘s employment. The trial court concluded that the actions of Potvin in performing apparently limited acts of electronic repair for his own monetary benefit while still employed by Wright‘s did not constitute an unfair trade practice.
CONCLUSION
For the reasons assigned, the trial court judgment is affirmed at appellant‘s cost.
AFFIRMED.
APPLICATION FOR REHEARING
Before SEXTON, NORRIS, LINDSAY, FRED W. JONES, Jr. and HIGHTOWER, JJ.
Rehearing denied.
Notes
LSA-R.S. 23:634 reads as follows:
§ 634. Contract forfeiting wages on discharge unlawful
No person, acting either for himself or as agent or otherwise, shall require any of his employees to sign contracts by which the employees shall forfeit their wages if discharged before the contract is completed or if the employees resign their employment before the contract is completed; but in all such cases the employees shall be entitled to the wages actually earned up to the time of their discharge or resignation.