Amorita N. THOMAS, on behalf of Herself and all others similarly situated, Plaintiff-Appellant, v. H & R BLOCK EASTERN ENTERPRISES, INC., Defendant-Appellee.
No. 10-1482.
United States Court of Appeals, Seventh Circuit.
Argued Oct. 20, 2010. Decided Jan. 12, 2011.
630 F.3d 659
D. Motion for a New Trial
Finally, Midwest presents a cursory argument that the district court erred in refusing to grant its motion for a new trial. Midwest devotes less than a single page of text in its 43-page brief developing this argument.
Even if its cursory treatment of the issue has not resulted in a waiver, Midwest‘s failure to present its argument to the district court does result in a waiver of that argument. Brown v. Auto. Components Holdings, LLC, 622 F.3d 685, 691 (7th Cir.2010). On appeal, Midwest argues that the manifest weight of the evidence demonstrated that the jury should have found a contract with a 12% annual interest rate and not one with a 24% annual interest rate. In its motion for a new trial before the district court, however, Midwest argued only that the manifest weight of the evidence demonstrated that the parties never agreed to any contract. It cannot change course on appeal to raise an argument different than the one it presented to the district court.
III.
Much of Midwest‘s arguments are based on the flawed assumption that Team Hurricane and MMG are interchangeable. They are not, and Midwest made no effort to pierce the corporate veil. Instead, counsel for Midwest repeatedly suggested at oral argument that her clients were left holding the bag because the go-karts so severely malfunctioned. Of course, this is not a reason to pierce the corporate veil and hold MMG responsible for another company‘s breach of warranty. Nor is it even an accurate statement. Midwest could have sought recovery for the defective go-karts from Team Hurricane, Cameron Motorsports, or CRG. It did not. The judgment of the district court is AFFIRMED.
Ronald E. Weldy, Attorney (argued), Weldy & Associates, Indianapolis, IN, for Plaintiff-Appellant.
Julianne P. Story, Attorney (argued), Husch Blackwell LLP, Kansas City, MO, for Defendant-Appellee.
Before FLAUM, RIPPLE, and EVANS, Circuit Judges.
FLAUM, Circuit Judge.
I. Background
Since neither party argues that the district court considered evidence it should not have or neglected to consider evidence it should have, we recite the facts that the district court provided in its opinion granting summary judgment to H & R Block. See Wragg v. Vill. of Thornton, 604 F.3d 464, 466 (7th Cir.2010).
Thomas began working for H & R Block as a seasonal employee in 2004. She
Thomas was eligible for two forms of compensation as a Tax Professional II. First, pursuant to her Employment Agreement, she received an hourly wage and was eligible for overtime. She received her hourly wage in a timely manner on a bi-weekly basis during both 2006 and 2007. Second, she was eligible for EOS compensation. H & R Block‘s Compensation Information Sheet (“Sheet“) explained the terms and conditions of the EOS compensation. Thomas was eligible for EOS compensation only if the sum of various specified amounts exceeded the aggregate gross hourly wages paid to her during the tax season (an amount which excluded hourly wages for certain training exercises). The specified amounts included, among other things, a few dollars for each product Thomas sold during the tax season, client retention incentives when a customer whom Thomas served the prior tax year returned to H & R Block, and a fee for each tax return she prepared, where the fee was based on “fees charged to the client and collected by H & R Block during the Tax Season.” 2006 Compensation Information Sheet Part 1, ¶ 4 (emphasis added); 2007 Compensation Information Sheet Part 1, ¶ 4 (emphasis added). Tax Professionals were to be credited for tax returns paid through April 21, 2006, and April 18, 2007, and all hours worked and wages earned through April 21, 2006, and April 20, 2007. The Sheets provided that EOS compensation would be paid by May 12, 2006, and May 14, 2007, “or as soon thereafter as is reasonable under the circumstances.” 2006 Compensation Information Sheet Part 6, ¶ 3; 2007 Compensation Information Sheet Part 5, ¶ 4.
Thomas was eligible for EOS compensation in 2006 and 2007. Thomas could view daily snapshots of her accumulated compensation during the tax season, but the reports did not include all of the data necessary to calculate the amount of her EOS compensation.
Payroll processing for the final pay periods’ hourly wages occurred on April 22, 2006, and April 21, 2007, respectively. The payroll processes were completed on April 23, 2006, and April 22, 2007, and the payroll was mailed to ADP, which printed and mailed Thomas‘s payroll checks, on the same day. Employee checks were available for deposit on April 26, 2006, and April 25, 2007.
Information was entered into H & R Block‘s Financial Information Network (“FIN“) between April 24 and 26, 2006, and April 23 and 25, 2007. Next, on April 26, 2006, and April 25, 2007, bookkeepers and managers began entering EOS compensation information into the FIN. The deadlines for entering all of the compensation information into the payroll system were May 1, 2006, and May 1, 2007. The Employee Compensation Reports were created on the same days. Reconciliation periods began on May 1, 2006, and May 2, 2007, and payroll processing for EOS compensation began on May 4, 2006, and May 4, 2007. ADP mailed compensation checks on May 8, 2006, and May 9, 2007, with issue dates of May 10, 2006, and May 11, 2007. Thomas received her EOS compensation via direct deposit on May 10, 2006, and May 11, 2007.
For the 2006 tax season, H & R Block calculated EOS compensation for roughly 78,000 professionals in the United States and actually paid compensation to roughly
Indiana‘s Wage Payment Statute requires employers to pay “wages” within ten days after they are earned.
Thomas sued H & R Block for violating the Wage Payment Statute, alleging that it failed to pay EOS compensation within ten days after it was earned. H & R Block moved for summary judgment on the ground that EOS compensation is not a wage under Indiana‘s Wage Payment Statute, and thus that it is not subject to the Ten-Day Rule. Thomas moved for class certification before the motion for summary judgment, but the district court stayed the class certification issue so it could first decide the motion for summary judgment. The district court granted H & R Block‘s motion. Thomas appeals from that decision.
II. Analysis
A. “Wages” Under Indiana Law
We review de novo a district court‘s decision to grant summary judgment, “construing all facts and inferences in the light most favorable to the party opposing the motion. We will affirm if the summary judgment record shows that ‘there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.‘” Bio v. Fed. Express Corp., 424 F.3d 593, 596 (7th Cir.2005) (citing
When addressing a question of state law while sitting in diversity, “our task is to ascertain the substantive content of state law as it either has been determined by the highest court of the state or as it would be by that court if the present case were before it now.” Woidtke v. St. Clair Cnty., Ill., 335 F.3d 558, 562 (7th Cir.2003) (internal quotation marks and citation omitted). If the state‘s highest court has yet to rule on an issue, “decisions of the state appellate courts control, unless there are persuasive indications that the state supreme court would decide the issue differently.” Research Sys. Corp. v. IPSOS Publicite, 276 F.3d 914, 925 (7th Cir.2002).
Indiana‘s Wage Payment Statute,
As a preliminary matter, “[t]he name given to the method of compensation is not controlling. Rather, we will consider the substance of the compensation to determine whether it is a wage and, therefore, subject to the Wage Payment Statute.” Kopka, Landau & Pinkus v. Hansen, 874 N.E.2d 1065, 1072 (Ind.Ct.App. 2007).
The Indiana Supreme Court explained that a particular form of compensation is a wage under the Indiana Wage Payment Statute if “it is compensation for time worked and is not linked to a contingency such as the financial success of the company.” Highhouse, 807 N.E.2d at 740 (internal quotation marks and citations omitted); see also id. at 739 (accepting the lower court‘s test of wages, which provided that “a bonus is a wage if the bonus directly relates to the time that an employee works, is paid with regularity, and is not dictated by the employer‘s financial success“). Applying this standard, Indiana courts consider a variety of factors to guide their determination of whether compensation similar to EOS compensation constitutes a wage.
First, Indiana courts are more likely to find compensation a wage if it is “not linked to a contingency.” Naugle, 864 N.E.2d at 1067 (quoting Highhouse, 807 N.E.2d at 740); see also Harney v. Speedway SuperAmerica, 526 F.3d 1099, 1105 (7th Cir.2008) (same). For example, compensation based on the performance of a company is less likely be deemed a wage. See, e.g., Highhouse, 807 N.E.2d at 740. Similarly, compensation is less likely to be a wage if it is contingent on a company‘s collection efforts. See Hansen, 874 N.E.2d at 1074 (“It only takes one reason, however, and here, as in Highhouse, the disputed compensation was tied to collection rather than billing.“); see also Highhouse, 807 N.E.2d at 740 (“[B]ecause Highhouse‘s bonus was based on collections for his services, not billings, substantially more than ten days after the services were performed might well be needed before the bonus amounts can be calculated.“). The Indiana Supreme Court explained that payment contingent on factors outside of an employee‘s or employer‘s control “is not consistent with the time constraints imposed by the Wage Payment Statute.” Highhouse, 807 N.E.2d at 740; see also Harney, 526 F.3d at 1106. Relatedly, the Indiana Supreme Court explained that compensation is less likely to constitute a wage when it is difficult to calculate and pay within ten days after it was earned. See Highhouse, 807 N.E.2d at 740; see also Harney, 526 F.3d at 1106. Thus, although parties cannot contract out of the Ten-Day Rule, Indiana courts consider whether the compensation agreement calls for payment more than ten days after it was earned when determining whether compensation is difficult to calculate and pay within the ten-day period. See, e.g., Highhouse, 807 N.E.2d at 740 (“An employer may not escape the Act by obtaining the employee‘s agreement that wages are not payable within the statutorily prescribed times. But the provision for annual payments lends support to the view that both parties recognize that frequent calculation and payment was difficult if not impossible.“); Hansen, 874 N.E.2d at 1074
Second, related to the first factor, Indiana courts also consider whether the compensation “directly relates to the time that an employee works.” Highhouse, 807 N.E.2d at 739; see also Naugle, 864 N.E.2d at 1067 (“[A] bonus is a wage if it is compensation for time worked and is not linked to a contingency such as the financial success of the company.” (quoting Highhouse, 807 N.E.2d at 740)); McCausland v. Walter USA, Inc., 918 N.E.2d 420, 426 (Ind.Ct.App.2009); Hansen, 874 N.E.2d at 1072 (“[I]f compensation is not linked to the amount of work done by the employee or if the compensation is based on the financial success of the employer, it is not a ‘wage.’ “).
Third, Indiana courts consider whether wages are paid on “a regular periodic basis for regular work done by the employee.” Hansen, 874 N.E.2d at 1072 (quoting Gress v. Fabcon, Inc., 826 N.E.2d 1, 3 (Ind.Ct.App.2005)); see also Highhouse, 807 N.E.2d at 739. Thus, when a particular form of compensation is paid annually, it is less likely to be considered a wage. See, e.g., Manzon v. Stant Corp., 138 F.Supp.2d 1110, 1114 (S.D.Ind.2001).
Fourth, Indiana courts consider whether the compensation in question is paid in addition to wages. In Gress, for example, an employee was paid on both a salary and commission. 826 N.E.2d at 2. He was eligible to receive commission payments on a monthly basis; these payments represented advances on his commissions that he was required to return if his projects were less profitable than anticipated. Id. The court held that the commission payments were not “wages,” even though they were paid monthly, because the commission program was based on the profitability of each sales-person‘s individual projects, and thus “[t]he payment of commissions was not directly linked to the amount of work performed,” and because of “the length of time involved in determining the final commission,” which made it “impossible ... to know what Gress was owed within ten days.” Id. at 4.
In Prime Mortgage USA, Inc. v. Nichols, 885 N.E.2d 628 (Ind.Ct.App.2008), the Court of Appeals of Indiana expressly indicated that whether commissions are paid in addition to salary is relevant to determining whether commissions are “wages.” In Nichols, the court noted that Indiana courts generally treat commissions as wages. 885 N.E.2d at 664. It held that commissions were “wages” where, other than car allowance and continued monthly payments of an annuity, the employee‘s compensation was composed solely of commissions, was paid on a regular, monthly basis, and could be calculated immediately. Id. at 663-65. It issued its holding in spite of the fact that the commissions were contingent on the employer‘s financial success. Id. at 663-64. But it explained that the commission “was not an amount in addition to her normal compensation; [the commission] was her normal compensation.” Id. at 664 (emphasis added). In distinguishing Gress, the court in Nichols explained that “Nichols‘s compensation could be determined immediately,” and that “the employee in Gress received a base salary plus commission, while Nichols received only a commission.” Id. at 664. Gress and Nichols indicate that Indiana courts consider, at least to some extent, whether a particular type of compensation is an employee‘s sole form of compensation, or whether it is paid in addition to a more regularly-paid salary.
Thomas‘s arguments on appeal are unavailing. First, she argues that EOS compensation is a wage because it is composed entirely of commissions, and because
Consistent with her argument that her compensation was exclusively composed of commissions, Thomas advances the position that her salary was merely a draw on her commission. She, thus, argues that she did not receive a wage in addition to her EOS compensation. She relies on testimony from an H & R Block employee characterizing the hourly wage as a draw. Since EOS compensation is paid only to the extent that various specified amounts exceed hourly wages, it is possible for Thomas to argue that her salary was in part a draw on her commission. But she cannot suggest that her wages were completely drawn from her commissions: She
Finally, Thomas argues that collecting on sales should not be considered a contingency for the purpose of determining whether compensation is a wage, and that Indiana case law to the contrary is incorrect. She first points to case law indicating that commissions are wages. See, e.g., J Squared, Inc. v. Herndon, 822 N.E.2d 633 (Ind.Ct.App.2005). She next argues that Hansen misinterprets Highhouse when it cites to Highhouse as support for its holding that collection efforts can constitute a contingency for the purpose of determining whether a compensation is a wage. 874 N.E.2d at 1074. She further argues that collection efforts cannot constitute such a contingency because “commission” is in the statutory definition of wages,
B. Certification
Thomas asks us to certify to the Indiana Supreme Court the question of whether the EOS compensation is a wage under Indiana law. When determining whether to certify a question, “[t]he most important consideration guiding the exercise of this discretion ... is whether the reviewing court finds itself genuinely uncertain about a question of state law that is vital to a correct disposition of the case.” State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 671 (7th Cir.2001) (citations omitted). We have also explained that “certification is appropriate when the case concerns a matter of vital public concern, where the issue will likely recur in other cases, where resolution of the question to be certified is outcome determinative of the case, and where the state supreme court has yet to have an opportunity to illuminate a clear path on the issue.” Id. at 672 (citations omitted); see also
This case does not warrant certification. First, it involves the interpretation of a compensation program that appears unique to H & R Block. Resolution of this case would unlikely “have a far-reaching precedential effect for others.” Id. Sec-
III. Conclusion
For the foregoing reasons, we AFFIRM the district court.