Hill v. Garda CL Nw., Inc.

This opinion Was filed for record
IN eLIRKt omcE
aL on
^snreaFWMSNMeraM
2018
CHIEF JUS SUSAN L. CARLSON
4^ SUPREME COURT CLERK
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
LAWRENCE HILL, ADAM WISE, and ROBERT No. 94593-4
MILLER, on their own behalves and on behalf of all
persons similarly situated,
EN BANC
Respondents/Cross-Petitioners,
V.
GARDA CL NORTHWEST,INC., f/k/a AT
Filed AUG 2 3 2018
SYSTEMS,INC. a Washington Corporation,
Petitioner/Cross-Respondent.
GORDON McCLOUD, J.—Garda CL Northwest Inc. operates an armored
transportation service and requires its drivers and messengers to remain constantly
vigilant while working. Specifically, Garda requires those employees to maintain
vigilance when they take lunch breaks while on the job. The Court of Appeals ruled
that this constant vigilance policy deprived the employees of a meaningful meal
period, as guaranteed under WAC 296-126-092. That court also ruled that this
policy violated the Washington Minimum Wage Act(MWA),chapter 49.46 RCW.
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Under Washington law, an employer who violates the MWA owes its
employees double exemplary damages unless certain exceptions apply. RCW
49.52.050, .070. One exception is for wage claims over which the employer and
employees have a "'bona fide'" or '"fairly debatable'" dispute, meaning a dispute
that is both objectively and subjectively reasonable. E.g., Wash. State Nurses Ass'n
V. Sacred Heart Med. Ctr., 175 Wn.2d 822, 834, 287 P.3d 516 (2012) (internal
quotation marks omitted)(quoting Morgan v. Kingen, 166 Wn.2d 526,534,210 P.3d
995 (2009); Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 161, 961 P.2d 371(1998)). The first question in this case is whether Garda carried its burden^ of
showing a fairly debatable dispute over whether the employees waived their state
law right to meal periods in their collective bargaining agreements(CBAs). Answer
& Cross-Pet. for Review at 18. The second question is whether the plaintiffs can
recover both prejudgment interest under RCW 19.52.010 and double exemplary
damages under RCW 49.52.070 for the same wage violation. Id. at 18-20.
We hold that Garda has failed to prove a bona fide dispute based on waiver.
We also hold that aggrieved workers may recover both double exemplary damages
under RCW 49.52.070 and prejudgment interest under RCW 19.52.010 for the same
' Wash. State Nurses Ass'n, 175 Wn.2d at 834 ("The burden falls on the employer
to show the bona fide dispute exeeption applies."(eiting Schilling, 136 Wn.2d at 165)).
No. 94593-4
wage violation. We therefore reverse and remand to the Court of Appeals for further
proceedings consistent with this opinion.
Facts and Procedural Background
Garda operates an armored transportation service delivering currency and
other valuables throughout Washington State. Typically, two Garda employees, a
driver and a messenger, guard these valuables during transport. To ensure the safety
of those employees and their cargo, Garda requires its drivers and messengers to
remain vigilant at all times—even when they take rest breaks and meal periods.^
Opening Br. of Appellant Garda at 7("acknowledg[ing] that because of the nature
of the work—^transporting Liability [(valuables)] in an armored truck and carrying
firearms—its crew must exercise some level of alertness at all times outside a Garda
facility").
Plaintiffs Lawrence Hill, Adam Wise, and Robert Miller are former Garda
drivers and messengers. They argue that Garda's policy of prohibiting drivers and
messengers from taking vigilance-free rest breaks and meal periods violates WAG
^ Garda disputed whether all drivers and messengers really followed that policy.
Clerk's Papers (CP) at 3172-3302 (containing logs of certain employees' social media
access). The trial court resolved that dispute by ruling that some employees may have
engaged in personal activities during their breaks, but the "[ejmployees were never relieved
ofthe obligations to guard the truck and/or the liability and to maintain constant vigilance."
CP at 3812.
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296-126-092 (guaranteeing workers rest breaks and meal periods) and RCW
49.46.020 ofthe MWA (entitling employees to compensation for all hours worked).
Clerk's Papers (CP) at 2753-61, 3304-08. They filed a lawsuit on behalf of
themselves and a class of similarly situated Washington drivers and messengers for
compensation for these missed rest breaks and meal periods. CP at 3-8. They
requested compensatory damages under RCW 49.46.040, exemplary double
damages under RCW 49.52.070, and prejudgment interest under RCW 19.52.010.
The trial court certified the plaintiff class (hereafter "Plaintiffs"). CP at 932-
34. It then ruled that WAC 296-126-092 granted Plaintiffs the right to vigilance-
free rest breaks and meal periods, CP at 3352-53, and that this was made especially
clear by the 2011 decision in Pellino v. Brink's Inc., 164 Wn. App. 668, 267 P.3d
383 (2011). CP at 3810-11. Pellino held that a similar constant vigilance policy
used by one of Garda's competitors. Brink's Inc., violated WAC 296-126-092.
Pellino, 164 Wn. App. at 694-96. It therefore granted summary judgment to the
Plaintiffs on the issue of liability. CP at 3352-54. A bench trial followed on the
issue of damages and double damages.
The Plaintiffs sought double damages pursuant to RCW 49.52.050 and .070.
Those statutes say that employers who intentionally underpay employees must pay
exemplary double damages. Garda opposed double damages. Garda argued that
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there was a bona fide dispute over the workers' entitlement to vigilance-free rest
breaks and meal periods for four reasons^ and that such a dispute constitutes a
defense to double damages under RCW 49.52.050 and .070. Garda also argued that
even if there were no bona fide dispute, the workers knowingly submitted to the
violation—another statutory defense to double damages. CP at 3447-48.
The trial court rejected Garda's arguments and granted the Plaintiffs
prejudgment interest and double damages for their missed rest breaks and meal
periods, starting two weeks from the date that Pellino was issued. CP at 3810,3821.
The trial court held that Garda did not have the requisite intent to deprive the workers
of their rest breaks and meal periods earlier because prior to Pellino it was fairly
debatable whether WAC 296-126-092 required vigilance-free rest breaks and meal
periods. CP at 3811.
Garda appealed several issues concerning liability.'^ It also appealed the
award ofdouble damages but only as to the meal period violations(not the rest break
^ Garda argued it had a bona fide dispute based on(1)federal preemption under the
Federal Aviation Administration Authorization Aet of 1994 (FAAAA), 49 U.S.C. §
14501(c)(1);(2) federal preemption under the Labor Management Relations Act of 1947
(LMRA), 29 U.S.C. § 185(a);(3) individual waiver based on the acknowledgments that
each employee signed, agreeing to be bound by the terms of their respective CBA; and(4)
collective waiver based on the Plaintiffs' respective CBAs. CP at 3437, 3444, discussed
infra at 9-10.
Garda appealed liability under WAC 296-126-092, raising questions regarding(1)
the meaning of WAC 296-126-092 and whether it required vigilanee-free rest breaks and
No. 94593-4
violations). Lastly, Garda appealed the Plaintiffs' recovery of both prejudgment
interest and double damages for the same violations.
The Court of Appeals affirmed the trial court's rulings on liability. Hill v.
Garda CL Nw., Inc., 198 Wn. App. 326, 343-59, 394 P.3d 390 (2017). But it
reversed the trial court's award of double damages for meal period violations and
reversed portions of the prejudgment interest award regarding rest break violations
because the Plaintiffs also recovered double damages for those violations. Id. at
363-66. The Court of Appeals explained that Garda had established its statutory,
bona fide dispute defense because the law was not that clear about whether meal
periods could be waived in a CBA. Id. at 363. The Court ofAppeals did not address
whether Garda had established the bona fide dispute defense on the other issues
Garda claimed were debatable: Federal Aviation Administration Authorization Act
of 1994(FAAAA)preemption. Labor Management Relations Act of 1947(LMRA)
preemption and individual waiver. Id. at 363-64. Nor did it address Garda's
statutory defense that the workers willfully submitted to the violation. Id. at 364.
Garda petitioned this court for review and the Plaintiffs cross-petitioned. We
denied Garda's petition but granted Plaintiffs' cross-petition on the issues of double
meal periods,(2)the waivability ofmeal period rights by CB As,and(3)federal preemption
under the FAAAA,the LMRA,and section 7 ofthe National Labor Relations Act of 1935,
29U.S.C. § 157.
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damages and prejudgment interest. Hill v. Garda CL Nw., Inc., 189 Wn.2d 1016,
403 P.3d 839 (2017).
Analysis
I. Garda Failed To Carry Its Burden of Showing the Statutory Bona Fide
Dispute Defense to Double Damages Based on Waiver
A. Under RCW 49.52.052 and .070, an Employer Is Liable for Double
Damages for Wage Violations Unless It Carries the Burden ofShowing
That a Statutory Defense Applied
The trial court's decision that Garda violated WAC 296-126-092 and is liable
to the Plaintiffs for wage violations under the MWA is not before this court. The
question for us relates solely to Garda's liability for double exemplary damages
under RCW 49.52.050 and .070.
Under those statutes, an employer who "pay[s] any employee a lower wage
than the wage such employer is obligated to pay such employee"shall be liable .. .
to judgment for twice the amount of the wages unlawfully . . . withheld by way of
exemplary damages, together with costs of suit and a reasonable sum for attorney's
fees" if the employer withheld the wages (1) "[wjilfully and [(2)] with intent to
deprive the employee of any part of his or her wages" and (3)the employee did not
"knowingly submit[] to such violations." RCW 49.52.050(2),.070.
The standard for proving willfulness is low—our cases hold that an
employer's failure to pay will be deemed willful unless it was a result of
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'"carelessness or err[or]."' Wash. State Nurses Ass'n, 175 Wn.2d at 834(quoting
Morgan, 166 Wn.2d at 534 (quoting Schilling, 136 Wn.2d at 160)); see also RCW
49.52.080 (presuming willfulness). But an employer defeats a showing of willful
deprivation of wages if it shows there was a "bona fide" dispute about whether all
or part of the wages were really due. Schilling, 136 Wn.2d at 161; see also Chelan
County Deputy Sheriffs' Ass'n v. County ofChelan, 109 Wn.2d 282, 301 n.l 1, 745
P.2d 1 (1987)(listing eases); Morgan, 166 Wn.2d at 534 (citing Pope v. Univ. of
Wash., 121 Wn.2d 479, 490, 852 P.2d 1055 (1993)).
Under our prior decisions,the burden is on the employer to show the existence
of sueh a bona fide dispute. Wash. State Nurses Ass'n, 175 Wn.2d at 834 (citing
Schilling, 136 Wn.2d at 165).
And under our prior decisions, a bona fide dispute has both an objective and
a subjective component. The employer must have a "'genuine belief" in the dispute
at the time of the wage violation. See Chelan County, 109 Wn.2d at 301 (quoting
Ebling V. Cove's Cove, Inc., 34 Wn. App. 495, 500,663 P.2d 132(1983)). That is
the subjective component. In addition,that dispute must be objectively reasonable—
that is, the issue must be "fairly debatable." Schilling, 136 Wn.2d at \(>\\see Wash.
State Nurses Ass'n, 175 Wn.2d at 836(examining reasonableness ofthe dispute over
No. 94593-4
wages to determine whether the issue was fairly debatable for purposes of RCW
49.52.050(2)). That is the objective component.
Thus, despite the statute's focus on the employer's intent, our decisions state
that whether an employer acts "[wjilfully and with intent to deprive" within the
meaning of RCW 49.52.050(2) is really a two-part test with an objective and
subjective component. The subjective, genuine belief component is a question of
fact that we generally review under the substantial evidence standard. Schilling, 136
Wn.2d at 167 (Alexander, J., dissenting) (citing Pope, 121 Wn.2d at 490 (citing
Lillig V. Beaton-Dickinson, 105 Wn.2d 653, 660, 717 P.2d 1371 (1986))); State v.
O'Connell, 83 Wn.2d 797, 839, 523 P.2d 872(1974); Chelan County, 109 Wn.2d at
300-01. The objective, "fairly debatable" inquiry is a legal question about the
reasonableness or frivolousness of an argument that we review de novo. See In re
Pers. Restraint of Caldellis, 187 Wn.2d 127, 385 P.3d 135 (2016)(reviewing de
novo lower court's dismissal of a personal restraint petition as frivolous under RAP
16.11(b)).
No. 94593-4
B. Garda Failed To Carry Its Burden of Showing the Statutory Bona Fide
Dispute Defense to Double Damages Based on Collective Waiver
1. The Trial Court Rejected All Four Bona Fide Disputes Proposed by
Garda
At trial, Garda argued that there was a bona fide dispute about whether the
Plaintiffs were entitled to vigilance-ffee meal periods because it questioned
(1) whether Plaintiffs' meal and rest break claims were preempted by
the Federal Aviation Administration Authorization Act("[FAAAA]");
(2) whether Plaintiffs' meal break claims were preempted by Section
301 of the Labor Management Relations Act ("LMRA"), ... (3)
whether Plaintiffs waived their meal break claims by individually
signing acknowledgment forms stating that the employee individually
agreed to the terms of the applicable Labor Agreements[, and (4)]
whether the Labor Agreements are the type of"CBAs"[Department of
Labor & Industries administrative policy] ES.C.6 § 15 is intend[ed] to
address [(given that this court questioned the characterization of the
plaintiffs' labor agreements as CBAs mHill v. Garda CLNw.,Inc., 179
Wn.2d 47, 50 n.l, 308 P.3d 635 (2013)].
CP at 3437, 3444. The trial court rejected Garda's claims of a bona fide dispute on
all four grounds. CP at 3817-19. With regard to question 1, it found that Garda did
not '"genuinely believe[]'" in the FAAAA preemption argument at the time of the
wage violation. CP at 3811,3819. This ruling on question 1 is a factual conclusion.
With regard to questions 2 and 3, it rejected Garda's LMRA preemption and
individual waiver arguments as objectively unreasonable. CP at 3817-19. The trial
court ruled that Garda's LMRA preemption argument was "meritless" because the
law was clear that the LMRA does not apply to claims based solely on state statutory
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No. 94593-4
and regulatory requirements. CP at 3818-19. As for Garda's argument that the
Plaintiffs had individually waived their meal periods when they signed
acknowledgements agreeing to be bound by the terms of their respective CBAs,the
trial court ruled that that argument was unreasonable because the CBAs on which
Garda's individual waiver arguments were predicated did not purport to waive the
"'on-duty' meal breaks" that the Plaintiffs were seeking to enforce. CP at 3818.
These rulings on questions 2 and 3 are legal conclusions. Finally, the trial court did
not provide a reason for rejecting Garda's fourth claim that the labor agreements
signed by the workers were not the type of CBAs that are subject to provision 15 of
the Department of Labor and Industries' Emplojonent Standard ES.C.6 (2005),
which bars waiver ofmeal period rights in CBAs. Because it made no factual finding
on that point, we treat its decision on question 4 as a legal one, not a factual one.
2. The Court of Appeals Reversed Based on the Bona Fide Dispute
Summarized at (4), Above: Whether a CBA Can Waive the State
Law Right to Meal Breaks
The Court ofAppeals reversed,finding that Garda did have a bona fide dispute
about whether the Plaintiffs waived their state law meal break right in their CBAs—
the dispute described as number 4, above. Specifically, that court held that it was
fairly debatable whether the Plaintiffs had waived their meal period rights because
"the state ofthe law was not clear" about whether meal period rights could be waived
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No. 94593-4
in a CBA, noting specifically that "Garda's interpretation of the Policy
[(Employment Standard ES.C.6 (2005))] on this point was not unreasonable." Hill,
198 Wn. App. at 363. We reverse.
3. We Reverse; Even If Washington Law Were Unclear about the
Waivability of"On Duty"MealPeriod Rights through CBAs, Garda
Never Argued that the Plaintiffs Waived the "On Duty"MealPeriod
Right That the Plaintiffs Are Seeking To Enforce
There was no bona fide dispute about whether the Plaintiffs waived their right
to a paid, on duty meal period. Indeed, even Garda acknowledges that the Plaintiffs
retained the right to a paid, on duty meal period. Instead, Garda argued that the
Plaintiffs waived their right to offduty meal periods and that they received their on
duty meal periods. E.g., Garda's Reply to Answer & Cross Pet. for Review at 1-2
("Garda argued below, as it has consistently throughout this litigation, that the
Drivers intentionally and knowingly waived off-duty meal periods either in the
agreements negotiated by the Drivers Associations or by individually signing the
acknowledgments of the same. .. . Garda also argued that there was no wage
violation because the Drivers were paid for such on-duty meal breaks."(emphasis
added)).
Based on that argument, Garda concludes that because the Plaintiffs were paid
for a full day, including the time during which they ate while working, they were
given and paid for "on duty" meal periods as required by WAG 296-126-092. E.g.,
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No. 94593-4
Suppl. Br. ofPet'r/Cross Resp't Garda,f/k/a AT Systems Inc. at 3("Garda maintains
that each relevant CBA clause confirmed showed [sic] that the Drivers agreed—and
chose—^to work [through] meal periods and receive pay. In other words,they agreed
to waive the unpaid off-duty meal period requirement contemplated by WAG 296-
126-092.").
But that's not what an "on duty" meal period, as contemplated by WAG 296-
126-092, is. An "on duty" meal period is one during which the employee is relieved
of all work duties—^the employee need only remain "on the premises or at a
prescribed work site in the interest of the employer." WAG 296-126-092(1).^
It is undisputed that Garda failed to provide the Plaintiffs with that type of
work-free,"on duty" meal period. And it is precisely that type of work-free, "on
duty" meal period on which the Plaintiffs base their claims in this case: the Plaintiffs
explicitly claimed that they were deprived of such "on duty" meal periods.
Because there was no argument that the Plaintiffs waived "on duty" (as
opposed to "off duty") meal periods in their GBAs, Garda's assertion of a bona fide
^ Regardless of whether it might have been debatable before the Pellino deeision
whether the meal periods the Plaintiffs reeeived qualified as an "on duty" meal period, that
debate is not relevant here beeause the trial court awarded double damages starting after
the Pellino deeision.
13
No. 94593-4
dispute based on collective waiver was objectively unreasonable. We therefore
reverse the Court of Appeals on the bona fide dispute question (4).^
Thus, even without focusing on the specific language ofthe Plaintiffs' CBAs,
we hold that Garda failed to establish a bona fide dispute based on collective waiver
because Garda never actually argued there was waiver ofthe particular type ofrights
the Plaintiffs sought to enforce here, that is, "on duty" meal periods.
4. The Plaintiffs' CBAs Support Their Undisputed Assertion That They
Did Not Waive Their "On Duty"Meal Periods in Those Agreements
The specific language of the Plaintiffs' CBAs, however, provides further
support for our conclusion that there was no bona fide dispute based on waiver. As
detailed below, each of the Plaintiffs' 18 CBAs contained one ofthree general meal
period clauses, all reaffirming that the Plaintiffs had not waived "on duty" meal
periods.
The first type of meal period clause stated that driving routes would be
scheduled without a designated, prescheduled lunch break and explained that the
employees would instead be provided a paid, on duty lunch break. Eight CBAs
contained one ofthree variations ofthat clause:
^ Given our limited resolution of this case, we do not address whether the Court of
Appeals also erred in concluding that the law was unclear as to the waivability of meal
period rights in CBAs.
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No. 94593-4
1. Street and ATM (automated teller machines) routes will be
scheduled without a designated lunch break; thus employees will not
be docked for same. In the event a truck crew on a Street or ATM
route wishes to schedule a nonpaid lunch break, they must notify
their supervisor. (CP at 390 (2004-09 Mt. Vemon Labor
Agreement),454(2004-08 Seattle Labor Agreement),536(2005-08
Tacoma Labor Agreement).)
2. Street routes as well as ATM routes will be scheduled without a
designated lunch break thus employees will not be docked for same.
In the event a truck crew on a street or ATM route wishes to
schedule a nonpaid lunch break, they must notify their supervisor.
(CP at 497(2007 Spokane Work Rules).)
3. Street routes will be scheduled without a designated lunch break;
thus employees will not be docked for same. In the event a truck
crew on a street route wishes to schedule a nonpaid lunch break,they
must notify their supervisor. (CP at 578 (2009 Wenatchee Labor
Agreement), 622(2006-09 YaHma Labor Agreement), 433 (2006-
09 Pasco Labor Agreement),^ 1513 (2006-09 Wenatchee labor
agreement).)
The second type of meal period clause guaranteed the employees a paid on
duty meal period and stated that if the employees wanted an unpaid off duty meal
period instead, then the employees must make arrangements with their supervisor.
Seven ofthe Plaintiffs' CBAs contained that clause:
The Employees hereto agree to an on-duty meal period. Employees
may have an off duty meal period if they make arrangements with their
supervisor in advance of the need or provided the supervisor with a
^ The court's photocopy of the 2006-09 Pasco labor agreement is striated and
therefore difficult to read, but the parties seem to agree that it contains language consistent
with the 2009 Wenatchee and 2006-09 Yakima labor agreements. Opening Br. of
Appellant Garda, App. at a; Pls.'/Cross-Pet'rs' Suppl. Br. at 11 n.6.
15
No. 94593-4
written request to renounce the on-duty meal period in exchange for an
off-duty meal period.
CP at 413 (2009-12 Mt. Vemon Labor Agreement), 478 (2008-11 Seattle Labor
Agreement), 516 (2008-11 Spokane Labor Agreement), 558 (2009-12 Tacoma
Labor Agreement); 1140 (2013-16 Mt. Vemon Labor Agreement), 4239 (2013-16
Seattle Labor Agreement), 1669-70 (2011-14 Spokane Labor Agreement).
The third type of meal period clause purported to waive all meal period rights
but then indicated that the employees still had a right to a paid, on duty meal period.
Three of their CBAs contained that clause:
The Employees hereto waive any meal period(s) to which they would
be otherwise entitled. Employees will be paid at their regular hourly
rate to work through any such meal period(s). Notwithstanding this
waiver, employees may eat meals within their vehicles while on route
so long as they can do so in a safe manner. Employees may take an
unpaid off-duty meal period if they make arrangements with their
supervisor at least one day in advance of the need or provide their
supervisor with a written request to renounce the on-duty meal period
in exchange for an off-duty meal period.
CP at 1163 (2010-13 Pasco labor agreement), 601 (2010 Wenatehee Labor
Agreement), 646 (2010-13 Yakima Labor Agreement).
Thus, none ofthe Plaintiffs' 18 CBAs actually waived their right to an on duty
meal period, which is the right the Plaintiffs seek to enforce in this lawsuit.
Garda has therefore failed to carry its burden of showing a bona fide dispute
on waiver.
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No. 94593-4
5. The LMRA Does Not Bar This Courtfrom Reading the Parties'
CBAs, Nor Does It Preempt the Plaintiffs'State Law Claim
Garda argues that it is impermissible for this court to interpret the language of
those agreements, despite the fact that Garda is the party that raised their language
as a basis for its bona fide dispute defense. Garda claims that this court is barred
from referring to that language because section 301 of the LMRA, 29 U.S.C. §
185(a), preempts the field of labor relations and bars state courts from resorting to
the language of a CBA even when analyzing the enforeeability ofa state law created
right. Opening Br. of Appellant Garda at 21-22.
Garda is incorrect. Because Garda raised the language and characterizes it as
supporting its argument, this court has a duty to read that language and decide
whether Garda is correct about that characterization. As the Ninth Circuit
summarized of the holdings of the relevant United States Supreme Court decisions
on this point,
[I]n order for complete preemption to apply, "the need to interpret the
CBA must inhere in the nature of the plaintiffs claim. If the claim is
plainly based on state law, § 301 pre-emption is not mandated simply
because the defendant refers to the CBA in mounting a defense."
[Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 691 (9th Cir.
2001); also Gregory v. SCIE, LLC, 317 F.3d 1050, 1052 (9th Cir.
2003); Humble v. Boeing Co., 305 F.3d 1004, 1008 (9th Cir. 2002).]
Valles V. Ivy Hill Corp.,410 F.3d 1071,1076(9th Cir. 2005)(emphasis added). The
Plaintiffs' claims in this case are "plainly based on state law." The fact that Garda
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No. 94593-4
"refers to the CBA in mounting a defense" does not turn it into an LMRA claim.
Neither does reading the CBAs themselves.
Garda also argues that if we choose to spend too much time addressing the
language of the CBAs that it raised, then the Plaintiffs' claim must be considered
fully preempted. This reflects a misunderstanding of the reach of LMRA
preemption. As the Court of Appeals said in its discussion of that issue, and in
reliance on controlling United States Supreme Court law,"[SJection 301 preemption
does not apply to every dispute between an employer and a union employee. '[I]t
would be inconsistent with congressional intent under [section 301]to pre-empt state
rules that proscribe conduct, or establish rights and obligations, independent of a
labor contract."' Hill, 198 Wn. App. at 349 (emphasis added)(second and third
alterations in original) {o^oting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 212,
105 S. Ct. 1904, 85 L. Ed. 2d 206 (1985)).
This holding remains good law, and the WAC on which the Plaintiffs rely is
a state rule that prescribes rights "independent of a labor contract."
Garda argues one final aspect of LMRA preemption. It contends that "the
Plaintiffs' claims stem from negotiable rights, which they have waived in their
CBAs." M at 351. And Garda is correct that in the line of cases in which the United
States Supreme Court "has sought to preserve state authority in areas involving
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No. 94593-4
minimum labor standards," Valles, 410 F.3d at 1076, that court has said that
"[section] 301 [of the LMRA] cannot be read broadly to pre-empt nonnegotiable
rights conferred on individual employees as a matter of state law." Livadas v.
Bradshaw, 512 U.S. 107, 123, 114 S. Ct. 2068, 129 L. Ed. 2d 93 (1994)(emphasis
added). Garda relies on this premise to argue the converse, i.e., that the meal period
protection at issue here was a negotiable right and, hence,the LMRA preempted the
Plaintiffs' claims and the Plaintiffs lack the ability to make any argument that the
CBA actually preserved their negotiable right.
But a CBA cannot waive the employees' right to the protection of even a
negotiable state law right unless it does so in "clear and unmistakable language." As
the Ninth Circuit recently explained, in a passage relying solely on controlling
United States Supreme Court law:
Finally, we have held that "§ 301 does not permit parties to
waive, in a [CBA], nonnegotiable state rights" conferred on individual
employees. Balcorta [v. Twentieth Century-Fox Film Corp., 208 F.3d
1102, 1111 (9th Cir. 2000)]. As the Supreme Court has repeatedly
emphasized, "Congress is understood to have legislated against a
backdrop of generally applicable [state] labor standards." Livadas, 512
U.S. at 123 n. 17, 114 S.Ct. 2068. Section 301 must not be construed
to give employers and unions the power to displace state regulatory
laws. See Cramer, 255 F.3d at 697; Humble, 305 F.3d at 1009;
Associated Builders & Contractors, Inc. [v. Local 302 Int'l Bhd. of
Elec. Workers^ 109 F.3d [1353, \3S1-5^, amended and superseded on
reh'g, 1997 WL 236296(9th Cir. 1997)]. Where, however, under state
law waiver of state rights may be permissible,"the CBA must include
'clear and unmistakable' language waiving the covered employee's
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No. 94593-4
state right 'for a court even to consider whether it could be given
effect.'" See Cramer, 255 F.3d at 692 (quoting Livadas, 512 U.S. at
125, 114S.Ct. 2068).
Valles, 410 F.3d at 1076 (footnote omitted). We agree.
Thus, even if Washington's state law meal period protection is considered
collectively negotiable—a question we do not reach—^the language in the Plaintiffs'
CBAs on which Garda relies certainly did not waive that protection in clear and
unmistakable language. As discussed above, the agreements did not waive the
protection of true on duty meal periods at all. Instead, as Garda acknowledges, the
CBAs retained the protection of true on duty meal periods. Thus, it was
unreasonable for Garda to claim a bona fide dispute based on waiver.^
® Contrary to the dissent's concems, our holding in this case does not disturb our
rulings in Champagne v. Thurston County, 163 Wn.2d 69, 82, 178 P.3d 936 (2008), and
Washington State Nurses Ass'n. Those cases state that "[g]enerally, an employer who
follows the provisions of a CBA 'with respect to overtime wages and compensatory time'
does not willfully deprive employees of wages or salary.'" Wash. State Nurses Ass'n, 175
Wn.2d at 834 (quoting Champagne, 163 Wn.2d at 82). As detailed above, the CBAs in
this case guaranteed the Plaintiffs an on-duty meal period, which the Court of Appeals held
they did not receive. Thus, we do not address the Plaintiffs' fallback argument that even
if the CBAs had waived their meal period rights under WAC 296-126-092, Garda could
not rely on such waiver as a defense to double damages because the Department of Labor
and Industries' Administrative Policy ES.C.6 (2005) bars waiver of meal period rights in
CBAs.
20
No. 94593-4
C. Garda's "Knowing[] Submi[ssion]" Defense and Its Other Bona Fide
Dispute Defenses Should Be Addressed on Remand
Given our limited grant of review, we remand to the Court of Appeals to
address Garda's remaining statutory defenses to double damages,ineluding whether
there was a bona fide dispute based on FAAAA preemption and whether the
Plaintiffs knowingly submitted to Garda's meal period violation. RAP 13.7(b); Hill,
198 Wn. App. at 364.
11. Workers May Recover Both Double Exemplary Damages under RCW
49.52.070 and Prejudgment Interest under RCW 19.52.010 for the Same
Wage Violation
The trial judge awarded the Plaintiffs back wages from 2006 to 2015 for the
vigilance-ffee meal periods and rest breaks of which they were deprived. CP at
3808, 3814-17. It also awarded double exemplary damages from 2011^ to 2015. CP
at 3821. Finally, it awarded prejudgment interest, but only on the back wages, not
on the double exemplary damages. CP at 3822. Garda does not dispute the
Plaintiffs' ability to recover prejudgment interest for the type of wage claims raised
here. See Stevens v. Brink's Home Sec.,Inc., 162 Wn.2d 42,50,169 P.3d 473(2007)
(classifying judgments for back wages as liquidated and therefore eligible for
The year ofthe Pellino decision.
21
No. 94593-4
prejudgment interest(citing Hansen v. Rothaus, 107 Wn.2d 468,472, 730 P.2d 662(1986))). Instead, Garda argues that the Plaintiffs cannot recover both prejudgment
interest and double exemplary damages for the same wage violation; Garda argues
that would constitute impermissible double recovery. The Court of Appeals agreed
and reversed the portions of the trial court's prejudgment interest award granting
double exemplary damages for the same wage violation. Hill, 198 Wn. App. at 364-
66.
Whether an award of double exemplary damages under RCW 49.52.070 and
an award of prejudgment interest result in an impermissible double recovery is a
question of statutory interpretation that we review de novo. Spivey v. City of
Bellevue, 187 Wn.2d 716, 726,389 P.3d 504(2017)(citing Cockle v. Dep't ofLabor
& Indus., 142 Wn.2d 801, 807, 16 P.3d 583 (2001)).
To answer this question, we must consider whether the harms compensated
by RCW 49.52.070, the double damages statute, and RCW 19.52.010, the
prejudgment interest statute, overlap.
They do not. RCW 49.52.070 awards employees "twice the amount of the
wages unlawfully rebated or withheld by way of exemplary damages" when the
employer withholds such wages willfully and with intent to deprive. (Emphasis
added.) "Exemplary damages" are synonymous with punitive damages. BLACK'S
22
No. 94593-4
Law Dictionary 692 (10th ed. 2014) (equating "exemplary damages" with
"punitive damages"). Exemplary damages under RCW 49.52.070 are therefore
designed to "punish and deter" an employer's blameworthy conduct, not to
compensate the worker for harm caused by such conduct. Morgan, 141 Wn. App.
at 161-62 (citing Black's Law Dictionary 418-19(8th ed. 2004)).
By contrast, prejudgment interest under RCW 19.52.010 is designed to repay
the plaintiff for the '"use value'" of the money that the plaintiff never received.
Hansen, 107 Wn.2d at 473 (quoting Mall Tool Co. v. Far W Equip. Co., 45 Wn.2d
158, 177, 273 P.2d 652 (1954)). "Prejudgment interest awards are based on the
principle that a defendant 'who retains money which he ought to pay to another
should be charged interest upon it.'" Id. (quoting Prier v. Refrigeration Eng'g Co.,
74 Wn.2d 25, 34, 442 P.2d 621 (1968)). The availability of prejudgment interest
does not depend on the willful intent ofthe employer; instead, it depends on whether
the claim is liquidated. Id. at 472. A claim is "liquidated" for purposes oftriggering
prejudgment interest "'where the evidence furnishes data which, if believed, makes
it possible to compute the amount with exactness, without reliance on opinion or
discretion.'" Id. (quoting Prier, 74 Wn.2d at 32). If a claim is liquidated, then
Washington courts will treat the claim as if it were a loan made to the defendant and
compensate the plaintiff for the loss of use of that money.
23
No. 94593-4
Because the compensatory function of prejudgment interest and the punitive
function of exemplary damages are different, there is no bar on awarding both for
the same underlying wage violation.
Garda's reliance on federal cases applying the federal double liquidated
damages provision of the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §
216(b), is unavailing. Although both the federal and state provisions entitle workers
to double damages when their employer unlawfully withholds wages and both are
silent as to the availability of prejudgment interest, the similarities between the two
provisions end there.
The federal provision was enacted in 1938'°—a year before Washington
adopted our double damages provision." The federal provision entitles the plaintiff
to double damages "as liquidated damages" when the employer violates certain
federal wage and hour laws. 29 U.S.C. § 216(b)(emphasis added).'^ By contrast.
52 Stat. 1069(1938).
"Laws OF 1939, ch. 195, § 3.
"Section 216(b)provides in pertinent part:
Any employer who violates the provisions of section 206 [(titled
"Minimum wage")] or section 207 [(titled "Maximum hours")] of this title
shall be liable to the employee or employees affected in the amount of their
unpaid minimum wages, or their unpaid overtime compensation, as the ease
may be, and in an additional equal amount as liquidated damages. . .. The
court in such action shall, in addition to anyjudgment awarded to the plaintiff
24
No. 94593-4
RCW 49.52.070, which was enacted a year later, contains different language. It
restricts the recovery of double damages to instances where the employer unlawfully
collects or receives a rebate of wages or unlawfully withholds wages "[wjilfully and
with intent to deprive the employee of any part of his or her wages." RCW
49.52.070, .050(2). In those limited instances, RCW 49.52.070 authorizes double
damages to be awarded "by way of exemplary damages
This distinction between double damages as ''exemplary damages" under
RCW 49.52.070 and double damages as "liquidated damages" under 29 U.S.C. §
216(b) is significant.
or plaintiffs, allow a reasonable attomey's fee to be paid by the defendant,
and costs of the action.
29 U.S.C. § 216(b)(emphasis added). That language has remained the same since its
enactment in 1938. Compare 29 U.S.C. § 216(b), with 52 Stat. 1069.
•3 RCW 49.52.070 provides:
Any employer and any officer, vice principal or agent of any employer who
shall violate any ofthe provisions ofRCW 49.52,050(1)[(rebate of wages)]
and (2)[(willful and intentional deprivation)] shall be liable in a civil action
by the aggrieved employee or his or her assignee to judgment for twice the
amount of the wages unlawfully rebated or withheld by way of exemplary
damages,together with costs ofsuit and a reasonable sum for attomey's fees:
PROVIDED, HOWEVER, That the benefits of this section shall not be
available to any employee who has knowingly submitted to such violations.
(Emphasis added.) Like its federal counterpart,RCW 49.52.070 has remained substantially
the same since its enactment in 1939. Compare RCW 49.52.070, with LAWS OF 1939, eh.
195, §3.
25
No. 94593-4
Unlike Washington's prejudgment interest law which uses "liquidated
damages" to refer to readily calculable damages, the FLSA uses "liquidated
damages" as an approximation for actual damages where the damages are "too
obscure and difficult of proof to calculate. Overnight Motor Transp. Co. v. Missel,
316 U.S. 572, 583-84,62 S. Ct. 1216,86 L. Ed. 1682(1942); see also Brooklyn Sav.
Bankv. O'Neil, 324 U.S.697,709,65 S. Ct. 895,89 L. Ed. 1296(1945). Liquidated
damages under the FLSA are therefore "compensation, not a penalty or punishment
by the Government." Overnight Motor,316 U.S. at 583. For that reason,the United
States Supreme Court has held that prejudgment interest is not available in addition
to double damages under the FLSA since the double damages provision already
compensates the employee for the delay in wages. Brooklyn Sav. Bank, 324 U.S. at
715. To hold otherwise, the Court explained, would "produce the undesirable result
of allowing interest on interest." Id. (citing Cherokee Nation v. United States, 270
U.S. 476, 490, 46 S. Ct. 428, 70 L. Ed. 694(1926)).
No such "interest on interest" problem results under RCW 49.52.070 because
our state double damages statute is designed to "punish and deter" employers from
unlawfully demanding a rebate in wages or unlawfully withholding wages willfully
and with an intent to deprive. Id. Federal case law interpreting the FLSA is therefore
not persuasive.
26
No. 94593-4
The Court of Appeals' reliance on Ventoza v. Anderson, 14 Wn. App. 882,
545 P.2d 1219(1976)—a timber trespass case—is likewise misplaced. In Ventoza,
a plaintifflandowner was harmed when the defendant cut 16 acres oftrees belonging
to the plaintiff without his permission. Id. at 886. The trial court awarded the
plaintifftreble damages under RCW 64.12.030 plus prejudgment interest. Id. at 897.
The Ventoza court reversed the prejudgment interest award. It held "that when a
plaintiff elects to seek recovery under the treble damage section, only three times the
value ofthe trees wrongfully cut may be recovered, and interest may not be granted
upon either the compensatory or the punitive portion of the award." Id. (citing
Rayonier, Inc. v. Poison, 400 F.2d 909, 922(9th Cir. 1968)). In reaching this rule,
the Ventoza court relied primarily on the Ninth Circuit's Rayonier decision. The
Ninth Circuit, in turn, relied primarily on this court's decision in Blake v. Grant,65
Wn.2d 410,413,397 P.2d 843(1964), and on the general rule that punitive remedies
must be strictly construed and not extended by implication. Rayonier, 400 F.2d at
922. We find neither rule applicable in this nontimber wage context.
As the Ninth Circuit acknowledged, Blake "never held" that prejudgment
interest is unavailable on the compensatory portion of a damages award. Id. Blake
merely stated that "interest is generally disallowed on punitive damages." Blake,65
27
No. 94593-4
Wn.2d at 413 (emphasis added) (citing 15 Am. Jur. Damages § 299 (1938)).^'^
Indeed, several other jurisdictions expressly allow prejudgment interest on the
compensatory portion of a damages award but deny it on the punitive portion ofthe
award. See, e.g., Matamiska Elec. Ass'n v. Weissler, 723 P.2d 600, 610 (Alaska
1986)("[Pjrejudgment interest may be awarded on the compensatory portion but not
on the punitive portion of the award." (citing Andersen v. Edwards, 625 P.2d 282,
289-90 (Alaska 1981))); Salvi v. Suffolk County Sheriff's Dep't, 67 Mass. App. Ct.
596, 608-09, 855 N.E.2d 777 (2006)(upholding award of prejudgment interest on
back pay but not on punitive damages). Like these jurisdictions, the trial court in
this case awarded prejudgment interest on only the compensatory portion of their
damages award, not the punitive, double damages award. CP at 3821 (awarding
"prejudgment interest. .. on the back pay owed"). The trial court did not award
prejudgment interest on the exemplary double damages.
We hold that ROW 49.52.070 does not bar recovery of prejudgment interest
on the compensatory portion of the Plaintiffs' damages award.
That referenced portion of section 299 states that "[ijnterest is not recoverable in
statutory actions for double or treble damages." 15 Am.Jur. Damages § 299.
28
No. 94593-4
Conclusion
Garda failed to prove a bona fide dispute based on the purported waiver of
Plaintiffs' state law right to on duty meal breaks in their CBAs. In addition, the
Plaintiffs can recover both double exemplary damages under RCW 49.52.070 plus
prejudgment interest under RCW 19.52.010 for the same wage violation. We
therefore reverse and remand to the Court of Appeals for further proceedings
consistent with this opinion.
29
No. 94593-4
I j
WE CONCUR:
f(JX »•
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Qy j
n
30
Hill V. Garda CL Nw., Inc.
No. 94593-4
JOHNSON, J.(concurring in part/dissenting in part)—While the majority
correctly concludes that, in general, a plaintiff may recover both prejudgment
interest under ROW 19.52.010 and double damages under ROW 49.52.070, on the
facts ofthis case, Garda CL Northwest Inc. did not willfully withhold wages and
thus double damages are inappropriate.
Garda and its employees entered a collective bargaining agreement(CBA)
establishing working conditions justified by the nature ofthe employment: an
armored truck service where employees are armed and transporting valuable cargo.
Given the nature of their occupation, Garda employees must be alert and attentive
the entire time they are at work.
The language in the CBAs is clear: "Employees hereto waive any meal
period(s) to which they would otherwise be entitled"(Clerk's Papers(CP)at 601
(2010 Wenatchee Labor Agreement), 646(2010-13 Yakima Labor Agreement))
and truck routes "will be scheduled without a designated lunch break"(CP at 390
(2004-09 Mt. Vernon Labor Agreement), 433 (2006-09 Pasco Labor Agreement),
497(2007 Spokane Work Rules), 536(2005-08 Tacoma Labor Agreement), 578
(2009 Wenatchee Labor Agreement), 622(2006-09 Yakima Labor Agreement)).
Even though Garda was ultimately held liable for unpaid wages, it was not
Hill V. Garda CL Nw., Inc., No. 94593-4
(Johnson, J., concumng in part/dissenting in part)
unreasonable for Garda to perceive this language as a clear waiver of employees'
meal periods and not merely an agreement to on-duty meal periods. Because
liability for wages is not at issue, whether these words constituted actual waiver is
not at issue. Instead, the focus is on Garda's state of mind and whether its actions
were willful for purposes of double damages.
Even in the few CBAs stating,"Employees hereto agree to an on-duty meal
period," that language cannot be read out of context. CP at 202(2004-08 Seattle
labor agreement), 558(2009-12 Tacoma Labor Agreement). The employee
handbook explicitly states that drivers must remain "alert at all times" while
working. CP at 1791, 1792. Drivers also testified that constant alertness was part of
the job. Even some of the CBAs recognize that the requirement of constant
alertness dovetails with employees' breaks. CP at 601 (2010 Wenatchee Labor
Agreement). Considering the CBAs,the employee handbook, and driver testimony,
there should be no question that drivers understood the need for a constant state of
vigilance when they agreed to work for Garda. Thus, it was not unreasonable for
Garda to interpret this section ofthe CBA as an agreement to work through meal
periods.
In holding that Garda willfully withheld wages, the majority fails to
recognize our precedent in Champagne v. Thurston County, 163 Wn.2d 69, 82, 178
P.3d 936(2008) and Washington State Nurses Ass'n v. Sacred Heart Medical
Center, 175 Wn.2d 822, 834, 287 P.3d 516(2012). "Generally, an employer who
Hill V. Garda CL Nw., Inc., No. 94593-4
(Johnson, J., concurring in part/dissenting in part)
follows the provisions of a CBA 'with respect to overtime wages and
compensatory time' does not willfully deprive employees of wages or salary."
Wash. State Nurses Ass'n, 175 Wn.2d at 834(quoting Champagne, 163 Wn.2d at
82). Here, Garda operated according to the CBAs signed by its employees—given
the nature ofthe job, there were no scheduled meal breaks and employees needed
to remain vigilant at all times while working. When there is an agreement and the
employer pays wages based on that agreement, as Garda did here, such action
negates a finding of willfulness. Champagne, 163 Wn.2d at 82. Furthermore, the
plaintiffs have presented no evidence of deception or bad faith surrounding the
creation of the CBAs.
Until today, under certain circumstances, employers and employees could
waive statutorily required rest and lunch breaks as long as an employment
agreement existed that provides adequate compensation for forgoing what the
statute otherwise required. Iverson v. Snohomish County, 117 Wn. App. 618, 622,
72 P.3d 772(2003)(affirming summary judgment for the employer because the
employee "failed to produce any evidence that the reality of his employment
contradicts the collective bargaining agreement" stating that he would need to
perform tasks during meal breaks). The majority's decision undermines the right of
employees to bargain collectively with their employers. Under the majority's
decision, CBAs arguably are no longer binding agreements, and neither employers
nor employees will have any incentive to adhere to their terms.
Hill V. Garda CL Nw.. Inc., No. 94593-4
(Johnson, J., concurring in part/dissenting in part)
That Garda followed the terms of the CBA is sufficient to negate a finding
of willfulness; the Court of Appeals should be affirmed.