Opinion
No. 57851-1-I.
May 21, 2007.
Appeal from a judgment of the Superior Court for King County, No. 03-2-37552-7, Steven G. Scott, J., entered November 14, 2004.
Affirmed by unpublished opinion per Schindler, A.C.J., concurred in by Ellington and Dwyer, JJ.
Class action representatives Leann Lafley and David Schodron (collectively Lafley) sued Seattle Drug and Narcotic Center, Inc. (Seadrunar), SeaDruNar Recycling, L.L.C. (the Recycling Center), Nan Busby, the executive director of Seadrunar, and Richard Busby, the director of the Recycling Center on behalf of former drug and alcohol clients who worked as volunteers at the Recycling Center as part of the program's work therapy. Lafley alleged violations of the Minimum Wage Act, chapter 49.46 RCW (MWA), Washington's Law Against Discrimination, chapter 49.60 RCW (WLAD), and the Consumer Protection Act, chapter 19.86 RCW (CPA). Because the participants in Seadrunar's drug and alcohol program volunteer to work at the Recycling Center with no promise or expectation of compensation and as a part of their treatment, we conclude the trial court did not err in dismissing Lafley's lawsuit on summary judgment and affirm.
FACTS
Seadrunar is a nonprofit residential drug and alcohol treatment program. Nan Busby has been the executive director since Seadrunar was established in 1968. The participants admitted to the drug and alcohol treatment program typically pay for treatment through public assistance including Temporary Aid to Needy Families, Supplemental Security Income, and Alcoholism and Drug Addiction Treatment and Support Act, Division of Alcohol and Substance Abuse of Department of Social and Health Services. But Seadrunar will not deny treatment to participants due to lack of funds.
In 1979, Seadrunar established the Recycling Center. The Recycling Center is staffed with paid employees and provides work therapy and job training opportunities for the participants in Seadrunar's drug and alcohol program. The revenue generated by the Recycling Center beyond the cost of operation is used to support Seadrunar and provides funding for participants who are not eligible for public assistance.
The Seadrunar drug and alcohol treatment program uses an addict-to-addict therapeutic model. The length of the treatment is six months to a year and a half. Treatment is in two phases followed by an aftercare plan. The first phase is a 90-day blackout period limiting contact and requiring intensive therapy and counseling. During the second phase, the clients continue with counseling and also participate in structured work therapy. Work therapy is a required component of the treatment program. During work therapy, the clients are closely monitored and behavioral standards are enforced. After successful completion of phases one and two, Seadrunar requires its clients to participate in a mandatory six-month minimum aftercare plan that includes ongoing therapy and counseling.
For work therapy, clients can work at the Seadrunar treatment facility or can apply to work at the Recycling Center. At the treatment facility, clients cook, do laundry, clean, and perform building maintenance. At the Recycling Center work on the recycling line and may operate equipment. The clients who work at the Recycling Center work approximately forty hours a week.
There is no information in the record about how many hours clients work when they elect to work at Seadrunar.
Before admission to the drug and alcohol treatment program, Seadrunar provides the applicant a packet of information about the program. The applicant must review the rules, policies, procedures and expectations with a staff member. Before beginning treatment, the participant must sign a contract acknowledging that the participant reviewed and understood the rules, policies, procedures, and expectations of the program. The contract includes a fee schedule and a description of the services provided, including: "[a] structured work position within the Therapeutic Community," and "[v]oluntary participation in work therapy . . . through the Recycling Center."
Lafley signed the "Seattle Drug and Narcotic Center, Inc. Client Contract. All Residents." In the contract Lafley states that she is "requesting" treatment at Seadrunar and agreed to follow all of the program's rules, policies, procedures and expectations.
To participate in work therapy at the Recycling Center, the client must submit an application to be a volunteer recycler. If accepted, the participants must agree to actively participate, continue treatment efforts during work therapy, stay motivated and productive, and follow safety rules. The advantages of work therapy at the Recycling Center are described as developing good work habits and job skills, fulfilling community service requirements, and obtaining reference letters. The application also explicitly states, "I . . . am volunteering my services to the Seadrunar Recycling Center in exchange for job training and experience. I fully understand that I will receive no monetary gain for this volunteer service. I have read and understand the attached copies of `the minimum standards for volunteer recyclers' and the "?Recycling Rules.'"
Lafley, on behalf of Seadrunar drug and alcohol treatment participants who worked at the Recycling Center, sued Seadrunar, the Recycling Center, and Nan and Richard Busby asserting MWA, WLAD, and CPA violations. The trial court conditionally certified a class but limited the class to Seadrunar clients who worked at the Recycling Center between October 3, 2000 and October 3, 2003.
Lafley and Seadrunar filed cross motions for summary judgment. The trial court granted Seadrunar's motion for summary judgment and dismissed Lafley's class action lawsuit.
Standard of Review
We review the trial court's summary judgment decision de novo. Ellis v. City of Seattle, 142 Wn.2d 450, 458, 13 P.3d 1065 (2000). Summary judgment is appropriate if the pleadings, affidavits, depositions, answers to interrogatories, and admissions "show there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." CR 56(c). Interpretation of a statute is a question of law that we also review de novo. Berrocal v. Fernandez, 155 Wn.2d 585, 590, 121 P.3d 82 (2005).
ANALYSIS
MWA Claim
Lafley contends that Recycling Center participants are entitled to wages and overtime for work at the Recycling Center and the court erred in dismissing the MWA claim.
The MWA requires employers to pay employees a minimum hourly wage and 150 percent of the hourly rate for any hours an employee works over 40 hours a week. Clawson v. Grays Harbor College Dist. No. 2, 148 Wn.2d 528, 537, 61 P.3d 1130 (2003). The MWA defines "employee" in RCW 49.46.010(5) as "any individual employed by an employer." "Employ" means "to permit to work." RCW 49.46.010(3). "Wage" means "compensation due to an employee by reason of employment." RCW 49.46.010(2).
The MWA is based on the Federal Fair Labor Standards Act of 1938 (FLSA). Innis v. Tandy Corp., 141 Wn.2d 517, 523-34, 7 P.3d 807 (2000). In construing the MWA, courts consider the interpretation of comparable provisions of the FLSA as persuasive authority. Innis, 141 Wn.2d at 524. See also, Hisle v. Todd Pac. Shipyards, 113 Wn. App. 401, 422, 54 P.3d 687 (2002). Similar to the MWA, the FLSA defines an employee as "any individual employed by an employer." 29 U.S.C. §§ 203(e)(1).
Under the FLSA, the plaintiff has the burden of proof to establish an employee-employer relationship exists. See Benshoff v. City of Virginia Beach, 9 F. Supp.2d 610, 618 (E.D. Va. 1998).
Lafley relies on a FLSA case, Tony and Susan Alamo Foundation v. Sec'y of Labor, 471 U.S. 290, 105 S. Ct. 1953, 85 L. Ed. 2d 278 (1985), to argue that Seadrunar violated the MWA. Alamo is distinguishable. In Alamo, the Secretary of Labor sued a nonprofit religious foundation for violating the FLSA. Alamo, 471 U.S. at 293. The foundation funded itself through the operation of 38 separate business enterprises. Alamo, 471 U.S. at 301. The foundation staffed the businesses largely with "associates" who were former substance abuse addicts or convicted criminals before their conversion and rehabilitation through the foundation. Alamo, 471 U.S. at 301. The associates were entirely dependent on the foundation for long periods of time and received food, clothing, shelter, and other benefits, but did not receive a salary or wages for their work. Alamo, 471 U.S. at 301. The Supreme Court affirmed the district court's decision that the associates were entitled to compensation under the FLSA because the foundation was a business enterprise and the associates were employees under the FLSA. Alamo, 471 U.S. at 300-01.
To determine whether the associates were "employees" under the FLSA, the Court applied the "economic reality" test adopted in Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 81 S. Ct. 933, 6 L. Ed. 2d 100 (1961). In Goldberg, the court held that the determination of whether an individual is an employee under the FLSA is one of "economic reality" and the circumstances of the activity, rather than "technical concepts." Goldberg, 366 U.S. at 32-33; See also, Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S. Ct. 1473, 91 L. Ed. 1772 (1947).
In Goldberg, the Court concluded the members of a knitting cooperative were employees based on several factors: (1) the members were given the opportunity to work and were paid, (2) the cooperative dictated their work in the same manner as the sole proprietorship would, (3) the cooperative fixed the rates at which the members worked and the price of the products, and (4) the cooperative discharged members who performed substandard work. Goldberg, 366 U.S. at 32-33.
In applying the "economic reality" test, the Court in Alamo held that the associates were employees because they were entirely dependent on the foundation for long periods of time and there was an implied agreement to receive in-kind benefits in exchange for their services. Alamo, 471 U.S. at 301. But citing to Walling v. Portland Terminal Co., 330 U.S. 148, 152, 67 S. Ct. 639, 91 L. Ed. 809 (1947), the Court also held that while the statutory definition of "employee" is broadly construed, it does not include those who without an express or implied agreement or "?promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons.'" Alamo, 471 U.S. at 295.
Here, while there is no dispute that the Recycling Center is a business enterprise, Lafley cannot show she and the other Recycling Center clients were employees under the MWA. Seadrunar's clients had no express or implied agreement with the Recycling Center that they would be compensated for participating in work therapy at the Recycling Center. In addition, the record establishes Lafley's participation in work therapy at the Recycling Center was an integral part of rehabilitation and was for her own purposes. Lafley paid for and participated in Seadrunar's program for the express purpose of drug and alcohol treatment. Lafley signed a contract requesting treatment and understood work therapy was an integral part of the treatment program. Lafley also signed an application to participate in work therapy at the Recycling Center as a volunteer, acknowledging that she would receive "no monetary gain for this volunteer service." In the application, Lafley states that her reason for volunteering to work at the Recycling Center was to "get back use to working." And, in her deposition Lafley testified that the benefit she received from the program was the "structure" it provided and "the habit of working and being able to work through an entire day."
Because the record establishes no promise or expectation of compensation for the time she spent at the Recycling Center and because Lafley volunteered for her own purposes, we conclude the trial court did not err in concluding Lafley was not an "employee" and dismissing her claim under the MWA.
At oral argument, Lafley relied on Archie v. Grand Central Partnership, Inc., 997 F. Supp. 504 (S.D.N.Y. 1998) to argue she was an employee as defined by the FLSA. Lafley cited Archie for the first time in her reply brief and only in passing. The court need not address cases cited for the first time in a reply brief or issues given only passing treatment. Cowiche Canyon Conversancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992); Holland v. City of Tacoma, 90 Wn. App. 533, 538, 954 P.2d 290 (1998). Nonetheless, Archie is distinguishable. In Archie, the court held that under the "economic reality" test, former homeless persons who were participating in a nonprofit job training program were employees under the FLSA. 997 F. Supp. at 507-08. Even though the participants in Archie were paid a wage and signed contracts indicating they expected to receive compensation, Grand Central coerced the participants into signing forms stating they were volunteers rather than employees after learning the participants were bringing a lawsuit under the FLSA. Archie, 997 F. Supp. at 509, 510, 521, 534.
Judicial Estoppel
Lafley also argues that because Seadrunar asserted as an affirmative defense in another lawsuit, Bond v. Seadrunar, Cause 01-2-16484-8 SEA, that the Recycling Center volunteers were employees under Washington's Industrial Insurance Act, Seadrunar is estopped from arguing that the program volunteers are not employees. Judicial estoppel applies when "a litigant's prior inconsistent position benefited the litigant or was accepted by the court." Johnson v. Si-Cor, Inc., 107 Wn. App. 902, 909, 28 P.3d 832 (2001). Because Seadrunar took the position that there were material issues of fact in Bond concerning the status of the plaintiff, and the court rejected Seadrunar's position that the plaintiff was an employee of the Recycling Center, judicial estoppel does not apply.
WLAD
Lafley also contends the trial court erred in dismissing her claim of employment discrimination under Washington's Law Against Discrimination, chapter 49.60 RCW. Lafley contends that she was "disabled" because of her chemical dependence and was treated differently than paid employees at the Recycling Center. The crux of Lafley's WLAD claim is whether similarly situated employees who did not have a disability were treated differently. Because Lafley cannot show she was an employee, she cannot establish employment discrimination under WLAD.
RCW 49.60.030(1) provides that an employee has the right: . . . to be free from discrimination because of race, creed, color, national origin, sex, sexual orientation, or the presence of any sensory, mental or physical disability or the use of a trained dog guide or service animal by a disabled person is recognized as and declared to be a civil right. This right shall include, but not be limited to:
The right to obtain and hold employment without discrimination."
CPA
Next, Lafley claims the trial court erred in dismissing her CPA claim. Lafley argues that Seadrunar's failure to disclose to program applicants that they will be encouraged, pressured, or forced to perform work without compensation is an unfair or deceptive act. Lafley also argues Seadrunar coerced participants to volunteer because many risk serious consequences if they do not complete the program.
To prevail on a CPA claim, plaintiffs must show, "(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; and (5) causation." Hangman Ridge Training Stables v. Safeco Title Ins. Co., 105 Wn.2d 778, 780, 719 P.2d 531 (1986). Failure to meet any one of these elements under the CPA is fatal to the claim. Sorrel v. Eagle Healthcare, 110 Wn. App. 290, 298, 38 P.3d 1024 (2002). Whether an alleged act is unfair or deceptive is a question of law. Leingang v. Pierce County Medical Bureau, 131 Wn.2d 133, 150, 930 P.2d 288 (1997).
Because all the participants in the program were clearly told that work therapy was part of the treatment, Lafley cannot establish an unfair or deceptive act. Citing her declaration, Lafley also seems to argue that because there are serious consequences to not completing the program, participating in work therapy is not voluntary. In support of her argument, Lafley notes that she had pending federal and Montana drug charges against her when she entered the program. But the record does not indicate the connection between the pending charges and successful completion of the Seadrunar program. On this record, because Lafley cannot establish an unfair or deceptive act or practice, her CPA claim fails.
Because the claims against the Busbys are derivative of the MWA, WLAD, and CPA claims, the trial court also did not err in dismissing the lawsuit against them.
We affirm.