Boucher v. Shaw ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THELMA BOUCHER, ARDITH  Nos. 05-15454
BALLARD, JOSEPH W. KENNEDY III 05-15702
and LOCAL 226, AFL-CIO, D.C. No.
Plaintiffs-Appellants, CV-04-01738-PMP
v.
 ORDER
DAN SHAW, MICHAEL VILLAMOR, CERTIFYING A
JAMES VAN WOERKOM, DOES 1-50, QUESTION TO
Defendants-Appellees. THE SUPREME
COURT OF
 NEVADA
Filed April 6, 2007
Before: J. Clifford Wallace, Richard D. Cudahy,* and
M. Margaret McKeown, Circuit Judges.
COUNSEL
Richard G. McCracken and Kristin L. Martin, McCracken,
Stemerman, Bowen & Holsberry, 1630 South Commerce
Street, Suite A-1, Las Vegas, Nevada 89102, for the
plaintiffs-appellants.
Constance L. Akridge and Matthew T. Milone, Jones Vargas,
3773 Howard Hughes Parkway, 3rd Floor South, Las Vegas,
Nevada 89109, for the defendants-appellees.
*The Honorable Richard D. Cudahy, Senior United States Circuit Judge
for the Seventh Circuit, sitting by designation.
3937
3938 BOUCHER v. SHAW
ORDER
Pursuant to Rule 5 of the Nevada Rules of Appellate Proce-
dure, we respectfully certify to the Nevada Supreme Court the
question of law set forth in Section III of this order. This
question of law will be determinative of a question pending
before this court, and there is no clearly controlling precedent
in the decisions of the Nevada Supreme Court.
We hold the issue concerning union standing and the Fair
Labor Standards Act claim in abeyance pending the result of
certification.
I. Background
The Castaways Hotel, Casino and Bowling Center (the
“Castaways”) closed in January 2004.1 The plaintiffs in the
present case are three former employees of the Castaways and
the labor union that represented those employees. The indi-
vidual plaintiffs, Ardith Ballard, Thelma Boucher and Joseph
Kennedy III, seek to recover unpaid wages for themselves and
for a class of Castaways employees. Ballard alleges that she
has not been paid for the last pay period that she worked at
the Castaways. Boucher alleges that she was not paid for the
final pay period until two weeks after her employment was
terminated. All three individual plaintiffs allege that they have
not been paid their accrued vacation and holiday pay. Culi-
nary Workers Union, Local 226 (“Local 226”) seeks to
recover wages which were withheld as dues from the pay-
checks of Thelma Boucher and other employees. The plain-
tiffs assert claims under Chapter 608 of the Nevada Revised
Statutes and under the Fair Labor Standards Act (FLSA), 29
U.S.C. § 206(a). For the purposes of this certification order,
only the Nevada state law claims are at issue.
1
The defendants in their brief refer to the Castaways as VSS Enterprises
LLC dba The Castaways Hotel, Casino and Bowling Center (“VSS”).
BOUCHER v. SHAW 3939
The defendants in the present case are three Castaways’
managers. Dan Shaw was the Chairman and Chief Executive
Officer of the Castaways at the time the plaintiffs were dis-
charged. Michael Villamor was responsible for handling labor
and employment matters at the Castaways. And, James Van
Woerkom was the Castaways’ Chief Financial Officer. Shaw
and Villamor were also members of VSS Enterprises LLC
dba The Castaways. Shaw had a 70 percent ownership in the
Castaways, and Villamor had a 30 percent ownership interest.
The plaintiffs allege that each defendant had custody or con-
trol over the “plaintiffs, their employment, or their place of
employment at the time that the wages were due.”
The Castaways had filed for Chapter 11 bankruptcy protec-
tion on June 26, 2003. In January 2004, at the time the indi-
vidual plaintiffs were discharged, the Castaways was
operating as a debtor in possession. On February 10, 2004,
after the plaintiffs were discharged, the Chapter 11 petition
was converted to a Chapter 7 petition. The Castaways ceased
operating around the time the bankruptcy case was converted
to Chapter 7.
The plaintiffs filed this lawsuit in Nevada state court on
October 14, 2004. On December 21, 2004, Defendant Dan
Shaw removed the case to the United States District Court for
the District of Nevada and filed a motion to dismiss pursuant
to Federal Rule of Civil Procedure 12(b)(6). Villamor and
Van Woerkom separately filed motions to dismiss as well,
alleging the same grounds for dismissal as Shaw. The district
court granted each of the defendant’s motions in full. Boucher
v. Shaw, No. CV-S-04-1738-PMP (PAL) (D. Nev. Jan. 25,
2005); Boucher v. Shaw, No. CV-S-04-1738-PMP (PAL) (D.
Nev. Feb. 18, 2005); Boucher v. Shaw, No. CV-S-04-1738-
PMP (PAL) (D. Nev. Apr. 11, 2005). The district court con-
cluded: (1) that the defendants were not “ ‘employer[s]’ under
Chapter 608 of the Nevada Revised Statutes”; (2) “Local 226
lacks standing to bring a claim of violation of NRS 608”; and
(3) the “plaintiffs cannot maintain a cause of action under the
3940 BOUCHER v. SHAW
Fair Labor Standards Act” against the defendants. Boucher v.
Shaw, No. CV-S-04-1738-PMP (PAL), slip op. at 1-2 (D.
Nev. Jan. 25, 2005).
On appeal to this court, the plaintiffs challenged the district
court’s determination that the defendants were not “employ-
ers” under Chapter 608 of the Nevada Revised Statutes,
among other arguments.
II. Discussion
Chapter 608 of the Nevada Revised Statutes provides a
statutory scheme for wage protection. “An employer shall pay
to the employee wages for each hour the employee works.”
Nev. Rev. Stat. § 608.016. “Whenever an employer dis-
charges an employee, the wages and compensation earned and
unpaid at the time of such discharge shall become due and
payable immediately.” Nev. Rev. Stat. § 608.020. “If an
employer fails to pay: (a) Within 3 days after the wages or
compensation of a discharged employee becomes due . . . the
wages or compensation of the employee continues at the same
rate from the day he . . . was discharged until paid or for 30
days, whichever is less.” Nev. Rev. Stat. § 608.040(1).
The application of these statutes to the present case
depends on whether the defendants were “employers” under
Chapter 608. “ ‘Employer’ includes every person having con-
trol or custody of any employment, place of employment or
any employee.” Nev. Rev. Stat. § 608.011. The question in
this case is whether the defendants as individual managers are
“employers” under § 608.011. This is a question of first impres-
sion.2 Neither the Nevada Supreme Court nor the Ninth Cir-
2
Only the district court in the present case has encountered this specific
question. In Westbrook v. GES Exposition Servs., Inc., No. 2:05-CV-
00532-KJD-GWF, 2006 WL 3751052, at *1 (D. Nev. Dec. 18, 2006), the
district court determined that the individual defendants in that case did not
meet the definition of “employer” under Nevada Revised Statutes
BOUCHER v. SHAW 3941
cuit has published an opinion analyzing the definition of
employer under Nevada Revised Statutes § 608.011.
The plaintiffs contend that the broad language of the statute
makes clear that liability for unpaid wages extends beyond the
common law employer to individual managers, like the defen-
dants in the present case. They also urge the court to construe
Chapter 608 of the Nevada Revised Statutes liberally in
accordance with United States Supreme Court, Ninth Circuit
and Nevada Supreme Court precedents which have inter-
preted other wage statutes liberally.
The defendants argue that Section 608.011 should be lim-
ited to the entity that “created and maintained the employment
relationship.” See Leonard v. McMorris, 63 P.3d 323, 329
(Colo. 2003). The defendants further argue that the plaintiffs’
interpretation of the statute to include individual managers as
employers would be inconsistent with Nevada’s limited liabil-
ity protection pursuant to Nevada Revised Statutes §§ 86.371,
86.381.
A number of courts in other states have considered whether
individuals can be liable as “employers” under state wage
protection statutes. At least three states have held that their
respective states’ wage protection statutes permit individual
managers to be held liable as employers. Butler v. Hartford
Technical Inst., Inc., 704 A.2d 222, 227 (Conn. 1997); Chu
Chung v. New Silver Palace Rest., Inc., 272 F. Supp. 2d 314,
318-19 (S.D.N.Y. 2003); Ellerman v. Centerpoint Prepress,
Inc., 22 P.3d 795, 799 (Wash. 2001). However, the definition
of “employer” provided in Section 608.011 is unique to
Nevada.
§ 608.011 because they did not “control the purse strings.” Whether the
defendants in the present case actually had control or custody of the plain-
tiffs is not at issue, since the present appeal concerns a motion to dismiss
where an allegation of control or custody is sufficient, not a motion for
summary judgment as was the case in Westbrook.
3942 BOUCHER v. SHAW
Most of the case law on this question concerns whether an
individual as an officer or agent of the corporation (and not
necessarily as an employer) can be held liable under a state’s
wage protection statutory scheme. The state statutes at issue
in these cases explicitly allow for agent or officer liability.
Courts in a number of states have held that an individual act-
ing as an agent or officer of the corporation can be held liable
under the state’s respective wage protection statute. See Rich-
mond v. Hutchinson, 829 A.2d 1075, 1078 (N.H. 2003); Mul-
ford v. Computer Leasing, Inc., 759 A.2d 887, 891 (N.J.
Super. Ct. Law Div. 1999); Mohney v. McClure, 568 A.2d
682, 686 (Pa. Super. Ct. 1990), affirmed 604 A.2d 1021 (Pa.
1992); Dumas v. InfoSafe Corp., 463 S.E.2d 641, 645 (S.C.
Ct. App. 1995); Mullins v. Venable, 297 S.E.2d 866, 868 (W.
Va. 1982). But see Leonard v. McMorris, 63 P.3d 323, 333
(Colo. 2003) (holding that Colorado’s Wage Claim Act does
not make officers and agents of a corporation jointly and sev-
erally liable, along with the corporation, for the payment of
wages). Section 608.011 does not allow for officer or agent
liability, nor is this the basis for the plaintiffs’ claims in the
present case.
We conclude that the statute is ambiguous and that the case
law from other states is of limited use. Because this question
represents an issue of first impression and has significant
implications for Nevada’s wage protection law and because
we cannot be certain how the Nevada Supreme Court would
resolve this matter, we believe certification on this question
of law to be appropriate.
III. Question Certified to the Nevada Supreme Court
The question of law we certify is:
Can individual managers be held liable as employers
for unpaid wages under Chapter 608 of the Nevada
Revised Statutes?
BOUCHER v. SHAW 3943
IV. Conclusion
The plaintiffs’ appeal presents an issue of Nevada state law
which will be determinative of an issue essential to the resolu-
tion of the state claims raised in the present case. For this rea-
son, we request that the Nevada Supreme Court accept and
decide the question herein certified. We agree to abide by the
Nevada Supreme Court’s decision as specified by Rule 5 of
the Nevada Rules of Appellate Procedure, which states that
“[t]he written opinion of the Supreme Court stating the law
governing the questions certified . . . shall be res judicata as
to the parties.” Nev. R. App. P. 5(g).
The clerk of this court shall forward a copy of this order,
under official seal, to the Nevada Supreme Court, along with
copies of all briefs and excerpts of record that have been filed
with this court. The parties shall notify the clerk of this court
within 14 days of any decision by the Nevada Supreme Court
to accept or decline certification. If the Nevada Supreme
Court accepts certification, the parties shall then notify the
clerk of this court within 14 days of the issuance of that
Court’s opinion.
IT IS SO ORDERED.
____________________
Margaret McKeown
United States Circuit Judge
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