Keefe v. Crowne Plaza Hotel Seattle et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Defendant's Partial Motion to Dismiss

W.D. Wash.February 23, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 1 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 The Honorable John C. Coughenour UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT SEATTLE DESIREE KEEFE, Plaintiff, v. CROWNE PLAZA HOTEL SEATTLE; INTERCONTINENTAL HOTELS GROUP; INTERSTATE HOTELS AND RESORTS; and AL ROSALES; BRUCE McCURDY; CHRISTY SMITH; COLIN SAGE HAMMOND, Defendants. Case No. 2:17−cv−00177−JCC DEFENDANTS’ PARTIAL MOTION TO DISMISS NOTING DATE: MARCH 17, 2017 I. INTRODUCTION Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendants (1) InterContinental Hotels Group Resources, Inc. (incorrectly named in this lawsuit as “InterContinental Hotels Group”); (2) Interstate Hotels, LLC (incorrectly named in this lawsuit as “Interstate Hotels and Resorts”); (3) Al Rosales; (4) Bruce McCurdy; and (5) Cristy Smith (incorrectly named in this lawsuit as “Christy Smith”) (collectively “the Served Defendants”), seek an Order dismissing the following counts of Plaintiff’s Complaint: Count I, which alleges assault; Count II, which alleges battery; Count III, which alleges negligent infliction of emotional distress; and Count IV, which alleges wrongful discharge. The Served Defendants also seek dismissal of Counts IV through VII) as to Individual Defendants Al Rosales, Bruce Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 1 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 2 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 McCurdy, Cristy Smith and Colin Sage Hammond (the “Individual Defendants”). As shown herein, Counts I-III are time-barred by the applicable statutes of limitations; Count IV fails to state a claim for which relief can be granted; and Counts IV-VII cannot be sustained against the Individual Defendants, as none of the claims allege (or even permit) individual liability against any of the Individual Defendants. II. STATEMENT OF RELEVANT FACTS On December 30, 2016, Plaintiff filed a Complaint in the Superior Court of King County, Washington, against the three corporate defendants: (1) Today’s Hotel Seattle Corporation d/b/a Crowne Plaza Hotel Seattle (incorrectly named in this lawsuit as “Crowne Plaza Hotel Seattle”); (2) InterContinental Hotels Group Resources, Inc. (incorrectly named in this lawsuit as “InterContinental Hotels Group”); (3) Interstate Hotels, LLC (incorrectly named in this lawsuit as “Interstate Hotels and Resorts”) (collectively, the “Corporate Defendants”); as well as the four Individual Defendants named above. Undersigned counsel represents all Defendants except Mr. Hammond. All Defendants other than Mr. Hammond and Today’s Hotel Seattle Corporation have been served. In her Complaint, Plaintiff alleges that Mr. Hammond, who worked with Plaintiff at the Crown Plaza Hotel in Seattle, sexually assaulted her on December 8, 2013 (and/or the early morning hours of December 9, 2013) at Plaintiff’s home. Compl., ¶¶3.7-3.17 (ECF No. 1-2, pp. 5-17). In her Complaint, Plaintiff alleges the specific events underlying her negligent infliction of emotional distress claim are the sexual assault and battery (which allegedly occurred on December 8 or 9, 2013), and Defendant Hammond’s contacting her in the week that followed until she obtained a Sexual Assault Protection order on December 19, 2013. Compl., ¶¶3.7-3.21, 5.4. Plaintiff contends that Defendant Hammond, and presumably, the Corporate Defendants under a Respondeat Superior theory, are liable to Plaintiff for assault (Count I), battery (Count II), and negligent infliction of emotional distress (Count III). Plaintiff also alleges that the Corporate Defendants (and potentially the Individual Defendants, though it is unclear from the Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 2 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 3 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 Complaint) are liable for constructive wrongful discharge (Count IV), negligent hiring and retention of the Individual Defendants (Count V), and wage and hour violations (Counts VI and VII). III. ARGUMENT AND AUTHORITIES A. Legal Standard Dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) is proper when there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To survive a motion to dismiss, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The Court must “accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1029-30 (9th Cir.2009) (citation and quotation omitted). B. Counts I through III of Plaintiff’s Complaint Are Time-Barred. Plaintiff’s first three causes of action, for (1) assault (Compl., ¶5.2); (2) battery (Compl., ¶5.3); and (3) negligent infliction of emotional distress (Compl., ¶5.4(1)1), should be dismissed because they are time-barred by the applicable statutes of limitation. The statute of limitations under Washington law for an assault claim is two years. RCW 4.16.100. A cause of action for battery also has a two-year statute of limitation. Id. The statute of limitations under Washington law for negligent infliction of emotional distress is three years. RCW 4.16.080(2); Manning v. Washington, 463 F.Supp.2d 1229, 1234 (W.D. Wash. 2006). In personal injury actions, “a cause of action accrues at the time the act or omission occurs.” In re Estates of Hibbard, 118 Wash.2d 737, 744, 826 P.2d 690 (1992) (citation omitted). Plaintiff contends in her Complaint that the alleged sexual assault and battery occurred in the late 1 Plaintiff’s Complaint includes two paragraphs numbered 5.4. Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 3 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 4 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 evening hours of December 8, 2013 (and/or the early morning hours of December 9, 2013). Compl., ¶¶3.7-3.17, 5.2-5.4(1). Plaintiff alleges the specific events underlying her negligent infliction of emotional distress claim are the sexual assault and battery (which allegedly occurred on December 8 or 9, 2013), and Defendant Hammond’s unwanted contact with her in the week that followed until she obtained a Sexual Assault Protection order on December 19, 2013. Compl., ¶¶3.7-3.21, 5.4(1). Plaintiff’s Complaint was not filed until December 30, 2016. As such, her claims for assault, battery, and negligent infliction of emotional distress are all time-barred, as the assault and battery claims accrued on December 8 or 9, 2013, and the negligent infliction of emotional distress claim accrued, at the latest, on December 19, 2013. Accordingly, all three claims were filed outside the applicable statutes of limitations and should be dismissed as a matter of law. C. Plaintiff’s Wrongful Discharge Claim (Count V) Should Be Dismissed for Failure to State a Cause of Action. In her Complaint, Plaintiff alleges that “CPS” (Crowne Plaza Seattle) and “IHG” (Intercontinental Hotels Group) engaged in constructive wrongful discharge of Plaintiff flowing from her resignation on March 14, 2014. Compl., ¶¶3.37, 5.4(2). “‘Washington cases generally describe constructive discharge as involving deliberate acts by the employer that create intolerable conditions, thus forcing the employee to quit or resign.’” Lee v. Rite-Aid Corp., 917 F. Supp.2d 1168, 1173 (E.D. Wash. 2013) (quoting Korslund v. DynCorp Tri–Cities Servs., Inc., 156 Wn.2d 168, 179, 125 P.3d 119 (2005), overruled on other grounds by Rose v. Anderson Hay and Grain Co., 184 Wn.2d 268 (2015)). The relevant question is whether a reasonable person, when confronted with the circumstances facing that particular employee, would have felt compelled to resign. See Washington v. Boeing Co., 105 Wn. App. 1, 15–16, 19 P.3d 1041 (2000) (“The inquiry is whether working conditions would have been so difficult or unpleasant that a reasonable person in the employee’s shoes would have felt compelled to resign.”). Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 4 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 5 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 “Courts applying Washington law must ‘presume [the employee’s] resignation is voluntary and, thus, cannot give rise to a claim for constructive discharge.’” Lee, 917 F. Supp.2d at 1173-74 (quoting Townsend v. Walla Walla Sch. Dist., 147 Wn. App. 620, 627, 196 P.3d 748 (2008)). The employee may rebut this presumption “by showing the resignation was prompted by duress or an employer’s oppressive actions.” Townsend, 147 Wn. App. at 627-28. Duress, like the intolerability of working conditions, is measured objectively rather than subjectively. Id. However, under Washington law, “where the employee continues to receive employment benefits and is still considered to be an active employee, or where his or her ability to return to work is protected in some other way, that employee has not been constructively discharged.” Korslund, 156 Wn.2d at 180. In other words, the employee’s leave “must be comparable to termination” to rise to the level of constructive discharge. Id. Here, Plaintiff acknowledges in her Complaint that Defendants requested repeatedly that Plaintiff return to work. Compl., ¶¶3.36, 3.37. Further, she acknowledges that she applied for short-term disability benefits on January 13, 2014, and was later awarded those benefits. Compl., ¶3.38. As such, because Plaintiff continued to be an active employee receiving short-term disability benefits until her resignation, and her ability to return to work was protected, she cannot, as a matter of law, establish that she was constructively discharged in violation of public policy. This claim should therefore be dismissed against all of the Defendants. D. Counts IV Through VII Should Be Dismissed Against the Individual Defendants As None of the Claims Allege or Permit Individual Liability. As set forth above, Plaintiff’s cause of action for Wrongful Discharge should be dismissed for failure to state a claim. That cause of action and the remaining causes of action are also subject to dismissal against the Individual Defendants, as none of the claims allege (or even permit) individual liability against any of these Individual Defendants. 1. Wrongful Discharge (Count IV) With regard to Plaintiff’s claim of Wrongful Discharge, Plaintiff includes no allegation Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 5 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 6 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 against the Individual Defendants, contending only that the “failure” was on the part of “CPS and IHG[].” Compl., ¶ 5.4. It is not clear from the Complaint whether Plaintiff seeks to bring this cause of action against only “CPS” and “IHG,” or against the Individual Defendants, as well. To the extent Plaintiff brings this cause of action against the Individual Defendants, it should be dismissed as a matter of law. In her Complaint, Plaintiff does not allege that any of the Individual Defendants were decision-makers in her “discharge,” (presuming, for purposes of this argument only, that Plaintiff was constructively discharged at all), and thus she does not state a claim for which relief may be granted. Further, while Washington courts permit a wrongful termination in violation of public policy claim to be brought against an individual’s “employer,” see, e.g., Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 232, 685 P.2d 1081 (1984), counsel could locate no Washington authority for the proposition that an employer’s individual managers or supervisors could be held liable under a wrongful termination in violation of public policy theory. See also Jenkins v. Palmer, 116 Wash. App. 671, 66 P.3d 1119 (2003) (because the wrongful discharge in violation of public public policy claim is limited to discharges, a plaintiff cannot sue under this theory an individual coworker who neither employed nor terminated the plaintiff). Thus, to the extent Plaintiff brings her wrongful discharge cause of action against the Individual Defendants, such a cause of action cannot be maintained, and Count IV should be dismissed as against the Individual Defendants as a matter of law. 2. Negligent Hiring and Retention (Count V) With regard to the claim for Negligent Hiring and Retention, Plaintiff’s cause of action alleges that “Defendants CPS, IHR and/or Interstate” were negligent in the hiring and retention of the Individual Defendants themselves. Compl., ¶5.5. It is unclear from the Complaint whether Plaintiff seeks to bring this cause of action against only the Corporate Defendants, or the Individual Defendants, as well. To the extent Plaintiff brings this cause of action against the Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 6 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 7 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 Individual Defendants, it should be dismissed. “[T]he relationship between employer and employee gives rise to a limited duty, owed by an employer to foreseeable victims, to prevent the tasks, premises, or instrumentalities entrusted to an employee from endangering others. This duty gives rise to causes of action for negligent hiring, retention and supervision.” Niece v. Elmview Group Home, 131 Wash.2d 39, 48, 929 P.2d 420 (1997) (emphasis supplied). Under a claim for negligent hiring and/or retention, an employer may be liable to a third person for negligence in hiring or retaining an employee who is incompetent or unfit. See, e.g., Peck v. Siau, 65 Wn. App. 285, 288, 827 P.2d 1108 (1992). In Plaintiff’s Complaint, there is no allegation that the Individual Defendants, in their individual capacities, were any of the other Individual Defendants’ employers. Further, Plaintiff cannot argue the Individual Defendants are somehow implicated in and liable for their own hiring and retention. Accordingly, Plaintiff’s Complaint fails to state a cause of action for Negligent Hiring/Retention against the Individual Defendant, and should be dismissed as against them for this reason alone. For purposes of this claim, Interstate Hotels, LLC was at all times each of the Individual Defendants’ employer, and to the extent any duty was owed to Plaintiff related to their hiring or retention, that duty was owed by Interstate Hotels, LLC’s alone. Counsel could locate no Washington authority for the proposition that an employer’s individual managers or supervisors could be held liable under a negligent hiring or retention theory. Accordingly, to the extent Plaintiff asserts her negligent hiring/retention claim against the Individual Defendants, it does not state a cause of action upon which relief may be granted, and must be dismissed as a matter of law. 3. Wage and Hour Violations (Counts VI and VII) The two remaining causes of action purport to state claims for willful failure to pay wages in compliance with RCW 49.46, et seq. and RCW 49.52, et seq. Compl., ¶¶ 5.6, 5.7. In Count VI, Plaintiff alleges “Defendants” failed to pay Plaintiff for all hours worked in Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 7 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 8 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 violation of RCW 49.46.090 and 49.46.130. Compl., ¶5.6. RCW 49.46.090 provides that “[a]ny employer who pays any employee less than the amounts to which such employee is entitled under or by virtue of this chapter, shall be liable to such employee affected for the full amount due to such employee under this chapter ….” RCW 49.46.130 sets forth the requirements for overtime pay under Washington law. In Count VII, Plaintiff alleges that “Defendants” alleged failure to pay Plaintiff wages is a violation of RCW 49.52.050 and 49.52.070. Compl., ¶5.7. Under RCW 49.52.050, “[a]ny employer or officer, vice principal or agent of any employer” may be liable for “willfully and with intent to deprive the employee of any part of his or her wages,” fails to “pay any employee a lower wage than the wage such employer is obligated to pay such employee by statute, ordinance, or contract” RCW 49.52.050(2). At all relevant times, Plaintiff was employed by Interstate Hotels, LLC, and not by any of the Individual Defendants. In fact, Plaintiff does not contend that any of the Individual Defendants was her employer, or allege that they were officers, vice principals, or agents of Interstate Hotels, LLC – nor could she. Compl., ¶1.3-1.10. Thus, there can be no employer liability under either RCW 49.46, et seq., or RCW 49.52, et seq., against the Individual Defendants. Additionally, with respect to individual liability under RCW 49.52, et seq. for an “officer, vice principal or agent of any employer” the Washington Supreme Court has held that, before such liability may attach to an individual under RCW 49.52.050, “there must be a showing that [the individual] had some control over the payment of wages before personal liability attaches to [the individual] for the employer’s nonpayment of wages to an employee.” Ellerman v. Centerpoint Prepress, Inc., 143 Wn.2d 514, 522-23, 22 P.3d 795 (2001).2 Supervisors and 2 On February 2, 2017, the Supreme Court of Washington decided Allen v. Dameron, No. 93052-2, 2017 Wash. LEXIS 95 (Feb. 2, 2017)(a copy of which is attached hereto as Exhibit A). That case addressed the issue of whether an officer, vice principal, or agent of an employer who had the ability to control payment was personally liable for non-payment of wages under RCW 49.52.050 when his or her employment was terminated or when he or she declared bankruptcy before the wages became due. Id. at **1-2. The decision in Allen does not apply to this case, Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 8 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 9 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 managers who do not exercise control over the payment of funds are not subject to this personal liability. Id. at 521. Plaintiff does not allege that any of the Individual Defendants had control over the payment of her wages. Thus, her Complaint does not state a claim for liability under RCW 49.52, et seq. against any of the Individual Defendants as an “officer, vice principal or agent” of Defendant Interstate Hotels, LLC. Accordingly, Counts VI and VII of Plaintiff’s Complaint must be dismissed as against the Individual Defendants, as Plaintiff does not state a claim for relief against any of them. IV. CONCLUSION WHEREFORE, the Served Defendants request that the Court grant this motion in all respects and dismiss with prejudice Plaintiff’s: (1) claims for assault, battery, and negligent infliction of emotional distress (Counts I-III) against all Defendants, as time-barred by the applicable statutes of limitation; (2) claim for wrongful discharge (Count IV) against all Defendants, for failure to state a claim; and (3) claims for wrongful discharge 3 , negligent hiring/retention, and wage and hour violations (Count IV-VII) against the Individual Defendants, as those claims do not allege or contemplate individual liability as against these Individual Defendants as a matter of law. The Served Defendants also respectfully request that the Court grant their reasonable costs and attorneys’ fees in making this Motion, and such other and further relief as the Court deems appropriate. as Plaintiff does not contend that any of the Individual Defendants were officers, vice principals, or agents who had the ability to control Plaintiff’s wages. See id. at **13-14 (discussing and distinguishing Ellerman). 3 If this Court does not grant dismissal of the Wrongful Discharge claim in its entirety, as set forth in Section III.C. herein, the Served Defendants respectfully request that the Court grant dismissal of that claim as to the Individual Defendants, as set forth in Section IIID.1. Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 9 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 10 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 Dated: February 23, 2017 s/Kellie A. Tabor Kellie A. Tabor, WSBA #46260 ktabor@littler.com M. Kathryne Bosbyshell, WSBA #47469 kbosbyshell@littler.com LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 Phone: 206.623.3300 Fax: 206.447.6965 Attorneys for Defendants Today’s Hotel Seattle Corporation d/b/a Crowne Plaza Hotel Seattle, InterContinental Hotels Group Resources, Inc., Interstate Hotels, LLC, Al Rosales, Bruce McCurdy, and Cristy Smith Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 10 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DEFENDANTS’ PARTIAL MOTION TO DISMISS - 11 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 CERTIFICATE OF SERVICE I am a resident of the State of Washington, over the age of eighteen years, and not a party to the within action. My business address is One Union Square, 600 University Street, Ste. 3200, Seattle, WA 98101. I hereby certify that on February 23, 2017: X I ELECTRONICALLY FILED the foregoing document(s) with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to the person(s) set forth below. I further certify that on February 23, 2017, I served true and correct copies of the foregoing document(s) by: X EMAIL to the email address(es) of the person(s) set forth below: Attorneys for Plaintiffs Bethany C. Mito, WSBA #42918 Risa D. Woo, WSBA #35411 Lee & Lee, PS 1001 Fourth Avenue, Suite 4368 Seattle, WA 98154 Tel: 206.458.6986 Fax: 206.458.6816 bethany.lee@leeandleelaw.com risa.woo@leeandleelaw.com d.sho.ly@leeandleelaw.com ariel.fields@leeandleelaw.com I declare under the penalty of perjury under the laws of the State of Washington that the above is true and correct. Executed on February 23, 2017, at Seattle, Washington. s/ Deborah A. Hatstat Deborah A. Hatstat dhatstat@littler.com LITTLER MENDELSON, P.C. Firmwide:145626051.3 079499.1038 Case 2:17-cv-00177-JCC Document 15 Filed 02/23/17 Page 11 of 11 EXHIBIT A Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 1 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 1 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 KELLIE A. TABOR, WSBA #46260 ktabor@littler.com M. Kathryne Bosbyshell, WSBA #47469 kbosbyshell@littler.com LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 Telephone: 206.623.3300 Fax: 206.447.6965 The Honorable Salvador Mendoza, Jr. UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WASHINGTON KIMBERLY PENTECOST, Plaintiff, v. CCR WENATCHEE III, L.L.C., Defendant. Case No. 2:17-cv-0002-SMJ FRE 502 CLAWBACK STIPULATION AND [PROPOSED] ORDER WHEREAS, the parties have agreed to stipulate to protect certain privileged and otherwise protected documents, data (including electronically stored information), and other information, including without limitation, metadata (collectively “Documents”), against claims of waiver and inadvertent production in the event they are produced during the course of this litigation whether pursuant to a Court Order, a parties’ discovery request, or informal production. WHEREAS, the parties may be required to produce large volumes of Documents. The parties wish to comply with discovery deadlines and complete discovery as expeditiously as possible, while preserving and without waiving any evidentiary protections or privileges applicable to the information contained in the Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 2 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 2 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 Documents produced, including as against third parties and other Federal and State proceedings, and in addition to their agreement, need the additional protections of a Court Order under FRE 502(d) and (e) to do so. WHEREAS, in order to comply with applicable discovery deadlines, a party may be required to produce certain categories of Documents that have been subject to minimal attorney review (the “Disclosures”). This Stipulation and Order is designed to foreclose any arguments that by making such Disclosures, the disclosure or production of Documents subject to a legally recognized claim of privilege, including without limitation the attorney-client privilege, work-product doctrine, or other applicable privilege: (a) was not inadvertent by the Producing Party; (b) that the Producing Party did not take reasonable steps to prevent the disclosure of privileged Documents; (c) that the Producing Party did not take reasonable or timely steps to rectify such Disclosure; and/or (d) that such Disclosure acts as a waiver of applicable privileges or protections associated with such Documents. WHEREAS, because the purpose of this Stipulation is to protect and preserve privileged Documents, the parties agree they are bound as follows from and after the date their counsel have signed it, even if such execution occurs prior to Court approval. Accordingly, the parties hereby STIPULATE, and the Court hereby ORDERS pursuant to Federal Rules of Evidence 502(d) and (e), as follows: 1. The disclosure or production of Documents by a Producing Party subject to a legally recognized claim of privilege, including without limitation the Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 3 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 3 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 attorney-client privilege and the work-product doctrine, to a Receiving Party, shall in no way constitute the voluntary disclosure of such Document. 2. The inadvertent disclosure or production of any Document in this action shall not result in the waiver of any privilege, evidentiary protection, or other protection associated with such Document as to the Receiving Party or any third parties, and shall not result in any waiver, including subject matter waiver, of any kind. 3. If, during the course of this litigation, a party determines that any Document produced by another party is or may reasonably be subject to a legally recognizable privilege or evidentiary protection (“Protected Document”): (a) The Receiving Party shall: (i) refrain from reading the Protected Document any more closely than is necessary to ascertain that it is privileged or otherwise protected from disclosure; (ii) immediately notify the Producing Party in writing that it has discovered Documents believed to be privileged or protected; (iii) specifically identify the Protected Documents by Bates number range or hash value; and (iv) within ten days of discovery by the Receiving Party, return, sequester, or destroy all copies of such Protected Documents, along with any notes, abstracts, or compilations of the content thereof. To the extent that a Protected Document has been loaded into a litigation review database under the control of the Receiving Party, the Receiving Party shall have all electronic copies of the Protected Document extracted from the database. Where such Protected Documents cannot be destroyed or separated, they shall not be reviewed, disclosed, or otherwise used by the Receiving Party. Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 4 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 4 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 Notwithstanding, the Receiving Party is under no obligation to search or review the Producing Party’s Documents to identify potentially privileged or work product Protected Documents. (b) If the Producing Party intends to assert a claim of privilege or other protection over Documents identified by the Receiving Party as Protected Documents, the Producing Party will, within ten days of receiving the Receiving Party’s written notification described above, inform the Receiving Party of such intention in writing and shall provide the Receiving Party with a log for such Protected Documents that is consistent with the requirements of the Federal Rules of Civil Procedure, setting forth the basis for the claim of privilege or other protection. In the event that any portion of a Protected Document does not contain privileged or protected information, the Producing Party shall also provide to the Receiving Party a redacted copy of the document that omits the information that the Producing Party believes is subject to a claim of privilege or other protection. 4. If, during the course of this litigation, a party determines it has produced a Protected Document: (a) The Producing Party may notify the Receiving Party of such inadvertent production in writing, and demand the return of such documents. Such notice shall be in writing; however, it may be delivered orally on the record at a deposition, promptly followed up in writing. The Producing Party’s written notice will identify the Protected Document inadvertently produced by Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 5 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 5 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 bates number range or hash value, the privilege or protection claimed, and the basis for the assertion of the privilege, and shall provide the Receiving Party with a log for such Protected Documents that is consistent with the requirements of the Federal Rules of Civil Procedure, setting forth the basis for the claim of privilege or other protection. In the event that any portion of the Protected Document does not contain privileged or protected information, the Producing Party shall also provide to the Receiving Party a redacted copy of the Document that omits the information that the Producing Party believes is subject to a claim of privilege or other protection. (b) The Receiving Party must, within ten days of receiving the Producing Party’s written notification described above, return, sequester, or destroy the Protected Document and any copies, along with any notes, abstracts, or compilations of the content thereof. To the extent that a Protected Document has been loaded into a litigation review database under the control of the Receiving Party, the Receiving Party shall have all electronic copies of the Protected Document extracted from the database. 5. To the extent the information contained in a Protected Document has already been used in or described in other documents generated or maintained by the Receiving Party prior to the date of receipt of written notice by the Producing Party as set forth in paragraphs 3(b) and 4(a), then the Receiving Party shall sequester such documents until the claim has been resolved. If the Receiving Party disclosed the Protected Document before being notified of its inadvertent production, it must take reasonable steps to retrieve it. Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 6 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 6 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 6. The Receiving Party’s return, sequestering, or destruction of Protected Documents as provided herein will not act as a waiver of the Requesting Party’s right to move for the production of the returned, sequestered, or destroyed documents on the grounds that the documents are not, in fact, subject to a viable claim of privilege or protection. However, the Receiving Party is prohibited and estopped from arguing that: (a) the disclosure or production of the Protected Documents acts as a waiver of an applicable privilege or evidentiary protection; (b) the disclosure of the Protected Documents was not inadvertent; (c) the Producing Party did not take reasonable steps to prevent the disclosure of the Protected Documents; or (d) the Producing Party failed to take reasonable or timely steps to rectify the error pursuant to Federal Rule of Civil Procedure 26(b)(5)(B), or otherwise. 7. Either party may submit Protected Documents to the Court under seal for a determination of the claim of privilege or other protection. The Producing Party shall preserve the Protected Documents until such claim is resolved. The Receiving Party may not use the Protected Documents for any purpose absent this Court’s Order. 8. Upon a determination by the Court that the Protected Documents are protected by the applicable privilege or evidentiary protection, and if the Protected Documents have been sequestered rather than returned or destroyed by the Receiving Party, the Protected Documents shall be returned or destroyed within ten days of the Court’s order. The Court may also order the identification by the Receiving Party of Protected Documents by search terms or other means. Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 7 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 7 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 9. Nothing contained herein is intended to, or shall serve to limit a party’s right to conduct a review of documents, data (including electronically stored information), and other information, including without limitation, metadata, for relevance, responsiveness, and/or the segregation of privileged and/or protected information before such information is produced to another party. 10. Once executed by all parties, the Stipulation shall be by treated by the parties as an Order of Court until it is formally approved by the Court. 11. By operation of the parties’ Stipulation and Court Order, the parties are specifically afforded the protections of FRE 502(d) and (e). IT IS SO STIPULATED, THROUGH COUNSEL OF RECORD. Dated: February 1, 2017 FOR PLAINTIFF /s Paul S. Kube Paul S. Kube, WSBA #24336 Lacy Kane, P.S. 300 Eastmont Ave East Wenatchee, WA 98802 Tel: (509) 884-9541 Fax: (509) 884-4805 paul@lacykane.com FOR DEFENDANT /s Kellie A. Tabor Kellie A. Tabor, WSBA #46260 ktabor@littler.com Katie Bosbyshell, WSBA #47469 kbosbyshell@littler.com LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101-3122 Phone: 206.623.3300 Fax: 206.447.6965 PURSUANT TO STIPULATION, IT IS SO ORDERED. DATED: The Honorable Salvador Mendoza, Jr. United States District Judge Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 8 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 FRE 502 CLAWBACK STIPULATION AND [PROPOSED]ORDER - 2 (2:17-cv-0002-SMJ) LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 CERTIFICATE OF SERVICE I am a resident of the State of Washington. I am over the age of eighteen years and not a party to the within-entitled action. My business address is: One Union Square, 600 University Street, Suite 3200, Seattle, Washington 98101. I hereby certify that on February 1, 2017, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Attorney for Plaintiff Paul S. Kube, WSBA #24336 Lacy Kane, P.S. 300 Eastmont Ave East Wenatchee, WA 98802 Tel: (509) 884-9541 Fax: (509) 884-4805 paul@lacykane.com And I hereby certify that I mailed by United States Postal Service the document to the following non CM/ECF participants: [Not applicable] I certify under penalty of perjury under the laws of the United States and of the State of Washington that the foregoing is true and correct. Dated this 1 day of February, 2017. s/ Deborah A. Hatstat Deborah A. Hatstat Dhatstat@littler.com LITTLER MENDELSON, P.C. Firmwide:145153002.3 999999.0536 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 9 of 24 Katherine Parker Neutral As of: February 23, 2017 4:59 PM EST Allen v. Dameron Supreme Court of Washington February 2, 2017, Filed No. 93056-2 Reporter 2017 Wash. LEXIS 95 * CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON IN MICHAEL ALLEN, Plaintiff, ZECHARIAH CLIFTON DAMERON IV, ET AL.,Defendants. Prior History: Allen v. Dameron, 2016 U.S. Dist. LEXIS 54958 (W.D. Wash., Apr. 22, 2016) Core Terms wages, vice principal, willful, employees, payday, questions, circumstances, terminated, bankruptcy petition, withholding, decisions, district court, payment of wages, defendants', personal liability, individuals, officer's, withheld, casino, funds, fail to pay, pay period, pay wages, deprivation, vacation, tends, ability to control, lack of control, member of the board, mental element Case Summary Overview HOLDINGS: [1]-For purposes of an action for the willful withholding of wages by a corporate employer that has entered chapter 7 bankruptcy, an officer, vice principal, or agent of the employer can be liable for the deprivation of wages under Wash. Rev. Code § 49.52.050 even if his or her employment with the employer (and his or her ability to control the payment decision) was terminated by the filing of the chapter 7 bankruptcy petition before the wages became due and owing; [2]-The officer's, vice principal's, or agent's participation in the decision to file a Chapter 7 bankruptcy petition that effectively terminates his or her employment and ability to control payment decisions tends to show a willful withholding of wages--the second element required for liability under the wage rebate act, Wash. Revised Code ch. 49.52. Outcome The two questions certified from the federal court were answered in the affirmative and the case was remanded to the federal district court for further proceedings. LexisNexis® Headnotes Civil Procedure > Appeals > Appellate Jurisdiction > Certified Questions Civil Procedure > Appeals > Standards of Review > Questions of Fact & Law Civil Procedure > Appeals > Standards of Review > De Novo Review HN1[ ] The Washington Supreme Court treats certified questions as questions of law that it reviews de novo. Civil Procedure > Appeals > Appellate Jurisdiction > Certified Questions Civil Procedure > Appeals > Record on Appeal HN2[ ] The Washington Supreme Court in ruling on a certified question considers the legal issues not in the abstract but based on the certified record provided by the federal court. Civil Procedure > Appeals > Appellate Jurisdiction > Certified Questions Civil Procedure > Appeals > Standards of Review Civil Procedure > Appeals > Summary Judgment Review > Standards of Review HN3[ ] For cases where a certified question pertains to Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 10 of 24 Page 2 of 15 Katherine Parker a motion for summary judgment, the Washington Supreme Court performs the same inquiry as the federal district court. Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application HN4[ ] An officer, vice principal, or agent of an employer may be personally liable for a failure to pay wages under the wage rebate act (WRA), Wash. Revised Code ch. 49.52, even when the payday date for such wages comes after the employer's filing of chapter 7 bankruptcy. An officer's, vice principal's, or agent's participation in the decision to file for chapter 7 bankruptcy can tend to show a willful withholding of wages under the WRA. Civil Procedure > Appeals > Appellate Jurisdiction > Certified Questions HN5[ ] The Washington Supreme Court has the authority to reformulate certified questions, but may decline to do so. Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Governments > Courts > Common Law HN6[ ] The wage rebate act, Wash. Revised Code ch. 49.52, states that an individual can be personally liable if the individual is an "officer, vice principal, or agent." Wash. Rev. Code § 49.52.050. The terms are defined according to their common law meanings. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN7[ ] Neither the date of an employee's payday in relation to the filing of a chapter 7 bankruptcy nor the Washington Supreme Court's holding in Ellerman v. Centerpoint Prepress, Inc., precludes imposing personal liability under the wage rebate act, Wash. Revised Code ch. 49.52, on an officer, vice principal, or agent. Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN8[ ] The filing of bankruptcy does not cut off the potential liability of an officer, vice principal, or agent under the wage rebate act, Wash. Revised Code ch. 49.52. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application 2017 Wash. LEXIS 95, *95 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 11 of 24 Page 3 of 15 Katherine Parker Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN9[ ] In circumstances of bankruptcy of an employer, the main concern for purposes of the wage rebate act, Wash. Revised Code ch. 49.52, is the withholding of earned wages on the date of filing for bankruptcy, regardless of whether the established payday date comes after the employer enters bankruptcy. Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN10[ ] Wash. Rev. Code § 49.48.010 states that when any employee shall cease to work for an employer, whether by discharge or by voluntary withdrawal, the wages due him or her on account of his or her employment shall be paid to him or her at the end of the established pay period. Under normal circumstances, an employee is paid his or her wages earned during a specified pay period on a payday date established by the employer. Wash. Admin. Code § 296-126-023. In those circumstances, a court judges whether an employer or agent has withheld wages under the wage rebate act, Wash. Revised Code ch. 49.52, if the employer failed to pay the employee his or her wages after the payday date ended. However, when an employer files for chapter 7 bankruptcy, the filing usually terminates all employees. Often, this renders the previously established pay periods and payday dates irrelevant if they occur after the filing. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Governments > Legislation > Interpretation Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN11[ ] The purpose of the wage rebate act, Wash. Revised Code ch. 49.52, expressly provides for personal recovery against individual officers. The statute must be liberally construed to advance the Washington legislature's intent to protect employee wages and assure payment. In addition, the wage statutes reflect the legislature's strong policy in favor of payment of wages to employees. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN12[ ] Although an employee may have another cause of action pursuant to Wash. Rev. Code § 49.56.010 for unpaid wages, this fact does not negate a cause of action under the wage rebate act, Wash. Revised Code ch. 49.52. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN13[ ] There are many reasons why an employee of a bankrupt employer may choose to sue an individual officer instead of the trustee of the employer's bankruptcy proceedings for past due wages, chief 2017 Wash. LEXIS 95, *95 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 12 of 24 Page 4 of 15 Katherine Parker among them an organization's financial insolvency, e.g., insufficient funds to satisfy wage claims. In such circumstances, the Washington legislature has created a remedy via the wage rebate act, Wash. Revised Code ch. 49.52, allowing employees to recover their wages from the individual officers, vice principals, or agents of the employer. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN14[ ] The purpose of the wage rebate act, Wash. Revised Code ch. 49.52 is clear: it is primarily a protective measure with the aim or purpose to see that an employee shall realize the full amount of the wages the employee is entitled to receive from his employer, and which the employer is obligated to pay, and, further, to see that the employee is not deprived of such right, nor the employer permitted to evade his obligation, by a withholding of a part of the wages. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Governments > Legislation > Interpretation HN15[ ] The wage rebate act, Wash. Revised Code ch. 49.52, must be liberally construed to advance the Washington legislature's intent to protect employee wages and assure payment. Therefore, in circumstances of chapter 7 bankruptcy, a court looks to whether the employer or officer, vice principal, or agent withheld their employees' earned wages when the company entered chapter 7 liquidation instead of on the established payday date. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN16[ ] The wage rebate act (WRA), Wash. Revised Code ch. 49.52, is part of a comprehensive legislative system with respect to wages indicating a strong legislative intent to assure payment to employees of wages they have earned. Under the statute, it does not matter whether the wages withheld are for one day's or one month's work. In passing the WRA, the Washington legislature intended to allow employees to recover all the wages they have earned. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN17[ ] Before a court can reach the question of whether a withholding of wages was willful under the wage rebate act (WRA), Wash. Revised Code ch. 49.52, it must first determine if an individual qualifies as a member of the class of individuals designated as potentially liable under the statute. Wash. Rev. Code § 49.52.050 (requiring an individual to be an "officer, vice principal, or agent" and a willful withholding of wages to establish liability). The filing of chapter 7 bankruptcy does not preclude holding an officer, vice principal, or agent personally liable under the WRA. Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers 2017 Wash. LEXIS 95, *95 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 13 of 24 Page 5 of 15 Katherine Parker Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN18[ ] An officer's participation in a decision to file a chapter 7 bankruptcy petition, where this decision effectively terminates the officer's employment and thus the ability to control payment decisions, makes it more likely that the officer may be held liable under the wage rebate act (WRA), Wash. Revised Code ch. 49.52, because it shows willfulness, the second element required by the WRA. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN19[ ] To succeed in an action under the wage rebate act, Wash. Revised Code ch. 49.52, a claimant must show both (1) the individual being sued is an officer, vice principal, or agent of the claimant's employer who has control over the payment of wages and (2) the individual willfully withheld the claimant's wages. Wash. Rev. Code § 49.52.050. Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN20[ ] An officer's participation in a decision to file a chapter 7 bankruptcy petition alters the wage rebate act, Wash. Revised Code ch. 49.52, analysis because it tends to show willfulness on the part of the officer. Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN21[ ] A nonpayment of wages is willful when it is the result of a knowing and intentional action. There are two instances when an employer's failure to pay wages is not willful: either by a finding of carelessness or by the existence of a bona fide dispute. Carelessness suggests errors in bookkeeping or other conduct of an accidental character, and a bona fide dispute exists when there is a fairly debatable dispute over whether an employment relationship exists, or whether all or a portion of the wages must be paid. There does not exist a "financial inability to pay" exception to the wage rebate act, Wash. Revised Code ch. 49.52. Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance HN22[ ] Officers, vice principals, or agents should be 2017 Wash. LEXIS 95, *95 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 14 of 24 Page 6 of 15 Katherine Parker held liable under the wage rebate act, Wash. Revised Code ch. 49.52, for their willful decisions that impact the payment of wages. The Washington legislature intended to impose personal liability on corporate officers because officers control the financial decisions of a corporation. There are many examples that highlight the need for such risk of personal liability. The officers decide whether to pay one debt over another (e.g., wages). The officers have the choice to file bankruptcy or to close the business and pay its debts (including wages). Officers decide whether to continue running an inadequately capitalized corporation while hoping for a change in financial position. Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits HN23[ ] The wage rebate act (WRA), Wash. Revised Code ch. 49.52 imposes personal liability on a corporate officer for wage decisions because officers control the choices over how the corporation's money is used, and such decisions constitute willful action taken under the WRA. Labor & Employment Law > Wage & Hour Laws > Remedies > Private Suits Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Statutory Application Business & Corporate Compliance > ... > Labor & Employment Law > Wage & Hour Laws > Wage Payments Labor & Employment Law > Wage & Hour Laws > Scope & Definitions > Definition of Employers Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > Misfeasance & Nonfeasance HN24[ ] A bankruptcy does not excuse the willfulness of an individual's exercise of his or her control to not pay wages, especially in circumstances where the decision to file for chapter 7 bankruptcy is controlled by the individual exercising control over wages. The bankruptcy of a corporation is not a means to escape personal liability by those who failed to pay wages owed. Counsel: [*1] Steven Bert Frank, Frank Freed Subit & Thomas LLP, Michael Craig Subit, Frank Freed Subit & Thomas LLP, for Petitioners. A. Robert Fischer, Jackson Lewis PC, Megan Burrows Carpenter, Jackson Lewis PC, Peter H. Nohle, Jackson Lewis PC, Clemens H. Barnes, Miller Nash Graham & Dunn LLP, Mario August Bianchi, Lasher Holzafel Sperry Ebberson PLLC, for Defendants. Toby James Marshall, Terrell Marshall Law Group PLLC, Blythe H. Chandler, Terrell Marshall Law Group PLLC, Daniel Foster Johnson, Breskin Johnson & Townsend PLLC, Jeffrey Lowell Needle, Maynard Building, as Amicus Curiae on behalf of Washington Employment Lawyers Association. Judges: AUTHOR: Justice Charles K. Wiggins. WE CONCUR: Chief Justice Mary E. Fairhurst, Justice Charles W. Johnson, Justice Barbara A. Madsen, Justice Susan Owens, Justice Debra L. Stephens, Justice Mary I. Yu. AUTHOR: Justice Sheryl Gordon McCloud. WE CONCUR: Justice Steven C. González. Opinion by: Charles K. Wiggins Opinion En Banc ¶1 WIGGINS, J. — The United States District Court for the Western District of Washington asks us to answer two certified questions about the application of RCW 49.52.050, the wage rebate act (WRA), in circumstances of chapter 7 bankruptcy: Is an officer, vice principal, or agent [*2] of an employer liable for a deprivation of wages under RCW 49.52.050 when his or her employment with the employer (and his or her ability to control the payment decision) was terminated before the wages became due and owing? Does an officer, vice principal, or agent's participation in the decision to file the Chapter 7 2017 Wash. LEXIS 95, *95 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 15 of 24 Page 7 of 15 Katherine Parker bankruptcy petition that effectively terminated his or her employment and ability to control payment decisions alter the analysis? If so, how? Order Vacating J. & Certifying Questions to Wash. Supreme Ct., Allen v. Dameron, No. C14-1263RSL, at 3-4 (W.D. Wash. Apr. 28, 2016). ¶2 We answer both of the certified questions in the affirmative. First, officers, vice principals, or agents may be held personally liable under the WRA, even if the payday date for those wages came after the employer filed for chapter 7 bankruptcy. Second, an officer's participation in the decision to file the chapter 7 bankruptcy petition tends to show a willful withholding of wages—the second element required by the WRA. FACTS I. Factual History ¶3 Michael Allen accepted a job as interim chief financial officer (CFO) for Advanced Interactive Systems Inc. (AIS) 1 and transferred to Seattle from the United Kingdom, where he [*3] worked for one of AIS's subsidiaries. AIS was profitable only twice in its company history and repeatedly defaulted on loans from its senior secured lender, Kayne Anderson Mezzanine Partners (KAMP). 2 KAMP initially excused those defaults by renewing its agreements with AIS from 2010 until early 2013. However, on February 14, 2013, AIS received a notice of default from KAMP, and KAMP seized control of AIS's United States bank accounts. ¶4 After it received the notice of default from KAMP, the AIS board tried to save AIS from its impending bankruptcy. At that time, there were five board members: Zechariah Clifton Dameron IV and Daniel Standen (the defendants in this action), as well as John Rigas, David McGrane, 3 and Steven Kalmanovitz (aka Steven Kalman). Unfortunately, the board was 1 AIS developed, manufactured, and sold virtual reality products for government agencies, the military, and the federal Department of Homeland Security. 2 In August 2010, AIS borrowed $ 15 million from KAMP, and KAMP received a senior secured interest in AIS's United States assets and control agreements for AIS's United States bank accounts, giving KAMP the right to seize AIS's bank accounts. AIS borrowed another $ 5 million from KAMP in May 2012. 3 McGrane was also the chief executive officer and president of AIS until he resigned on March 5, 2013. unsuccessful and AIS filed for bankruptcy on March 14, 2013. The intervening events were as follows. ¶5 On February 15, 2013, the board wrote a letter asking KAMP to release the funds necessary for AIS to meet its payroll. Five days later, the board wrote to inform KAMP that should it fail to release the funds, AIS would have to terminate all of its employees. That letter informed KAMP that failure to release the [*4] funds would incur liability for withheld wages under chapter 49.52 RCW. KAMP responded, lifting its hold on AIS's bank accounts. As a result, the board now authorized every payment AIS made. However, the existing funds were insufficient to meet AIS's financial obligations, and the board requested additional funding 4 from KAMP. ¶6 Given the dire financial state of AIS, Dameron proposed that AIS make preparations to file for chapter 7 bankruptcy 5 should KAMP decline to provide additional funding to AIS. Standen seconded Dameron's proposal, and the board approved the proposal. Specifically, Dameron and Standen were “empowered” to file a chapter 7 bankruptcy petition after approval from the board of directors. Immediately following that meeting, Rigas resigned. ¶7 KAMP rejected all of the board's funding requests. In light of KAMP's rejection, Dameron proposed that AIS file for chapter 7 bankruptcy as soon as possible, terminate all AIS employees, except for those necessary to prepare the chapter 7 filings, and cease operations of AIS and its subsidiaries. The board unanimously approved the proposal. McGrane resigned after that meeting, leaving AIS without a chief executive officer (CEO) and only Dameron, Standen, [*5] and Kalman as the remaining members of the board. ¶8 Pursuant to the board's action, Allen sent a termination letter to AIS's employees on March 4. The termination letter informed the employees of the chapter 7 filing and acknowledged that they would receive their final paycheck, including accrued vacation, on March 15, their regular payday date. Allen's employment was not terminated at this time since he was one of the employees the board deemed necessary to prepare the chapter 7 filing. ¶9 At the next board meeting, the board decided that upon filing for chapter 7 bankruptcy, the remaining 4 The board also suggested selling AIS's subsidiaries. 5 See 11 U.S.C. §§ 701-784. 2017 Wash. LEXIS 95, *2 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 16 of 24 Page 8 of 15 Katherine Parker company funds would be allocated for retained employees, payroll taxes, state sales taxes, and employees, while holding $ 25,000 for insurance. Shortly thereafter, the board paid $ 19,837.08 for AIS's April general insurance premiums, $ 13,953.00 for directors' and officers' insurance, and $ 7,853.96 in payroll advance for retained employees. ¶10 On March 14, 2013, the board authorized the filing of AIS's chapter 7 bankruptcy petition. 6 Minutes prior to the filing, the board adopted a resolution to use its remaining assets for employees' wages. The board paid approximately $ 16,000.00 to employees' 401K plans [*6] and $ 31,423.72 to payroll. That amount was not sufficient to cover all wages that AIS owed to its employees, which amounted to $ 322,615.02, and none of that money was paid to Allen. II. Procedural History ¶11 After AIS filed chapter 7 bankruptcy, three former employees filed a class action suit on behalf of all terminated AIS employees against all former AIS board members, including Dameron and Standen (hereafter referred to as the defendants), for willful withholding of wages under RCW 49.52.050, the WRA. That case settled, and the defendants and Rigas agreed to pay the class $ 356,500. However, the terms of the settlement offer excluded Allen as a member of that class. ¶12 Thereafter, Allen filed this civil suit in the United States District Court for the Western District of Washington, alleging that the defendants willfully withheld wages in violation of the WRA. 7 See Allen v. Dameron, No. C14-1263RSL, 2016 WL 827168, at *1, 2016 U.S. Dist. LEXIS 28068, at *2 (W.D. Wash. Mar. 3, 2016) (court order), vacated on recons., 2016 WL 4772484, 2016 U.S. Dist. LEXIS 54958 (Apr. 22, 2016) (court order). Allen claimed that he was owed three months' severance pay, unused vacation pay, and 6 Allen asserts that the bankruptcy filing terminated all employees, including Dameron, Standen, and Kalman. Dameron and Standen disagree, asserting that they resigned following the filing. However, Kalman is the only board member who appears to have formally resigned; in a letter dated March 13, 2013, Kalman announced his resignation, effective upon the chapter 7 filing. Regardless, Dameron's and Standen's employment terminated upon the filing for chapter 7 bankruptcy. 7 Allen sought an award of $ 84,175.21, but the district court concluded that the unpaid wages, severance, and unused vacation amounted to $ 78,303.17. wages earned during two pay periods: wages with a payday date one day after the bankruptcy petition was filed and one week's worth of wages with [*7] a payday date 15 days after the filing. 8 The defendants moved for summary judgment, and the district court granted that motion, reasoning that (1) the defendants did not have the authority to pay Allen's wages on the dates they became due and that (2) the defendants did not willfully withhold wages from Allen. See Allen, 2016 WL 827168, at *1, 2016 U.S. Dist. LEXIS 28068, at *16. ¶13 Allen timely filed a motion asking the district court to vacate its judgment and reconsider the defendants' motion for summary judgment. Allen argued that the district court should have certified the relevant questions of state law to this court. Over the defendants' opposition, the district court granted Allen's motion to vacate the summary judgment. The district court then certified two questions to this court: [(1)] Is an officer, vice principal, or agent of an employer liable for a deprivation of wages under RCW 49.52.050 when his or her employment with the employer (and his or her ability to control the payment decision) was terminated before the wages became due and owing? [(2)] Does an officer, vice principal, or agent's participation in the decision to file the chapter 7 bankruptcy petition that effectively terminated his or her employment and ability to control payment decisions [*8] alter the analysis? If so, how? We granted review pursuant to RCW 2.60.020. 9 STANDARD OF REVIEW 8 AIS filed its chapter 7 petition on March 14, 2013. The first set of Allen's wages had a pay period that ended on March 10, with a payday date of March 15. The second set of Allen's wages had a pay period that ended on March 24 and a payday date of March 29. 9 On appeal, on October 13, 2016, the defendants filed their answer brief to the Washington Employment Lawyers Association's amicus brief supporting Allen. Allen moved to strike this answer, arguing that it was untimely because the deadline to file any answer to the amicus was September 29, 2016. Subsequently, the court allowed the defendants to file a motion for an extension of time to be applied to their answer retroactively. We passed these motions to the merits and now grant the defendants' motion for extension of time and deny Allen's motion to strike. 2017 Wash. LEXIS 95, *5 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 17 of 24 Page 9 of 15 Katherine Parker ¶14 HN1[ ] We treat certified questions as “questions of law that we review de novo.” Carlsen v. Glob. Client Sols., LLC, 171 Wn.2d 486, 493, 256 P.3d 321 (2011). In addition, HN2[ ] “[w]e consider the legal issues not in the abstract but based on the certified record provided by the federal court.” Id. HN3[ ] For cases such as this, where the questions “pertain to a motion for summary judgment, we perform the same inquiry as the district court.” Saucedo v. John Hancock Life & Health Ins. Co., 185 Wn.2d 171, 178, 369 P.3d 150 (2016) . ANALYSIS ¶15 We reject the defendants' invitation to reformulate the certified questions and answer both certified questions in the affirmative. First, we hold that HN4[ ] an officer, vice principal, or agent may be personally liable for the failure to pay wages under the WRA, even when the payday date for such wages comes after the filing of chapter 7 bankruptcy. Second, an officer, vice principal, or agent's participation in the decision to file for chapter 7 bankruptcy tends to show a willful withholding of wages under the WRA. I. We Decline the Invitation To Reformulate the Certified Questions ¶16 HN5[ ] We have the authority to reformulate certified questions. Danny v. Laidlaw Transit Servs., Inc., 165 Wn.2d 200, 205, 193 P.3d 128 (2008) (plurality opinion). However, we decline to do so here. ¶17 The defendants' request to reformulate the certified questions is actually a request [*9] for the court to answer a completely different question. The defendants ask us to answer whether they, as members of the board of directors, may be held liable under the WRA. The certified questions, on the other hand, ask us to clarify our law regarding the application of the WRA in circumstances of chapter 7 bankruptcy. The district court's certified questions already assume the existence of individuals who are liable under the WRA. HN6[ ] The WRA states that an individual can be personally liable if he or she is an “officer, vice principal or agent.” 10 RCW 49.52.050. The district court's certified 10 The terms are defined according to their common law meanings. See Ellerman v. Centerpoint Prepress, Inc., 143 Wn.2d 514, 520-23, 22 P.3d 795 (2001). The additional requirement that the individual officer, vice principal, or agent had control over the payment of wages is discussed infra at Section II. questions mirror that language exactly by asking about the liability of an “officer, vice principal, or agent.” We decline to answer a question that the federal district court seems already to have answered. ¶18 In addition, the circumstances where a member of the board of directors will be liable under the WRA appear to be rare. Here, the directors were acting as the de facto officers of AIS. In fact, AIS operated without a CEO for a period of several days until the board filed for chapter 7 bankruptcy. The board made the decisions of who was being paid, when payments were made, and how much was being paid to AIS employees. Such decision-making [*10] is not within the normal duties of a member of the board of directors for a corporation. Given the rare circumstances in which a director would make the type of decisions subject to liability under the WRA, we decline to reformulate the certified question. II. An Officer, Vice Principal, or Agent May Be Held Liable under the WRA When His or Her Employment Was Terminated by the Filing of a Chapter 7 Bankruptcy Petition and the Payday Date for Wages Came after the Filing ¶19 We answer the first certified question in the affirmative for two reasons. HN7[ ] Neither the date of the employee's payday in relation to the filing of the chapter 7 bankruptcy nor the court's holding in Ellerman v. Centerpoint Prepress, Inc., 143 Wn.2d 514, 522-23, 22 P.3d 795 (2001), precludes imposing personal liability under the WRA on an officer, vice principal, or agent. A. In Circumstances of Chapter 7 Bankruptcy, We Look to Whether an Employee's Earned Wages Were Withheld on the Date the Corporation Filed for Bankruptcy ¶20 As demonstrated in Morgan v. Kingen, 166 Wn.2d 526, 210 P.3d 995 (2009), HN8[ ] the filing of bankruptcy does not cut off the potential liability of an officer, vice principal, or agent. Morgan presented a similar fact pattern—wages were earned prior to the chapter 7 filing, but were not payable until payday dates after the filing. Id. at 532, 535 n.1. A CEO [*11] and CFO opened and operated a casino. Id. at 531. One year after opening, the casino filed for chapter 11 bankruptcy. Id. at 532. After the chapter 11 filing, the CEO and CFO continued to operate the casino as debtors-in-possession. Id. The casino's financial position continued to decline, and the United States trustee moved to convert the chapter 11 proceeding into a 2017 Wash. LEXIS 95, *8 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 18 of 24 Page 10 of 15 Katherine Parker chapter 7 liquidation. Id. During the hearing on the motion, the officers declined to inject more capital into the casino and the matter was converted into a chapter 7 bankruptcy. Id. Before the conversion, the casino's employees earned wages covering two pay periods, and the payday dates for the wages occurred after the chapter 7 conversion date. Id. at 532, 535 n.1. The officers therefore “suggest[ed] the failure to pay these wages was beyond their control,” relying on our holding in Ellerman. Id. at 535 . ¶21 We addressed this argument first in a footnote, stating that “the first pay period of unpaid wages ended well before the conversion date … [and] even if we considered the payday date relevant, [the casino] lacked adequate cash to pay the employees their earned wages when it entered chapter 7 liquidation.” Id. at 535 n.1. Thus, Morgan suggested that HN9[ ] in circumstances of bankruptcy, [*12] we are most concerned with the withholding of earned wages on the date of filing, regardless of whether the established payday date comes after the employer entered bankruptcy. ¶22 This understanding is consistent with HN10[ ] RCW 49.48.010, which states that “[w]hen any employee shall cease to work for an employer, whether by discharge or by voluntary withdrawal, the wages due him or her on account of his or her employment shall be paid to him or her at the end of the established pay period.” Under normal circumstances, an employee is paid his or her wages earned during a specified pay period on a payday date established by the employer. WAC 296-126-023. In those circumstances, we judge whether an employer or agent has withheld wages under the WRA if the employer failed to pay the employee his or her wages after the payday date ended. However, when an employer files for chapter 7 bankruptcy, the filing usually terminates all employees, as happened in this case. Often, this renders the previously established pay periods and payday dates irrelevant if they occur after the filing. 11 11 The defendants argue that we should not hold an officer, vice principal, or agent liable in this situation because the legislature has created an alternative remedy for employees like Allen. The defendants direct the court to RCW 49.56.010, which states that wage claims “are preferred claims [in cases of bankruptcy], and must be paid by such trustees or assignees before any other creditor or creditors.” Therefore, the defendants argue, “the trustee is the proper party against whom such claims may and should be brought.” ¶23 We decline to allow responsible officers, principals, and agents to circumvent the legislature's intent that employees receive all the wages owed to them [*13] simply because the previously established payday date for wages occurs after a chapter 7 filing. 12 HN14[ ] The purpose of the WRA is clear; it is “primarily a protective measure … [with] the aim or purpose … to see that the employee shall realize the full amount of the wages … he is entitled to receive from his employer, and which the employer is obligated to pay, and, further, to see that the employee is not deprived of such right, nor the employer permitted to evade his obligation, by a withholding of a part of the wages.” Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 159, 961 P.2d 371 (1998) (quoting State v. Carter, 18 Wn.2d 590, 621, 140 P.2d 298, 142 P.2d 403 (1943)). In This assertion ignores HN11[ ] the purpose of the WRA, which expressly provides for personal recovery against individual officers. As we have noted in several cases, “The statute must be liberally construed to advance the Legislature's intent to protect employee wages and assure payment.” Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 159, 961 P.2d 371 (1998). In addition, “[t]he wage statutes … reflect the legislature's strong policy in favor of payment of wages to employees.” Jumamil v. Lakeside Casino, LLC, 179 Wn. App. 665, 682, 319 P.3d 868 (2014). HN12[ ] Although Allen may have another cause of action pursuant to RCW 49.56.010, this fact does not negate his cause of action under the WRA. HN13[ ] There are many reasons why an employee may choose to sue an individual officer instead of the trustee of the employer's bankruptcy proceedings, chief among them an organization's financial insolvency, e.g., insufficient funds to satisfy wage claims. In such circumstances, the legislature has created a remedy via the WRA, allowing employees to recover their wages from the individual officers, vice principals, or agents of the employer. 12 The defendants also argue that the wages implicated by the certified questions are limited, comprising at most one month, implying that an employee's recovery of wages in these circumstances is somehow less important. See WAC 296-126- 023(c) (requiring wages in Washington be paid at least monthly). However, this argument neglects that HN16[ ] the WRA is part of a “comprehensive legislative system with respect to wages indicat[ing] a strong legislative intent to assure payment to employees of wages they have earned.” Schilling, 136 Wn.2d at 159. Under the statute, it does not matter whether the wages withheld are for one day's or one month's work. In passing the WRA, the legislature intended to allow employees to recover all the wages they have earned. See id. 2017 Wash. LEXIS 95, *11 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 19 of 24 Page 11 of 15 Katherine Parker simpler terms, HN15[ ] the WRA “must be liberally construed to advance the Legislature's intent to protect employee wages and assure payment.” 13 Id. Therefore, in circumstances of chapter 7 bankruptcy, we look to whether the employer or officer, vice principal, or agent withheld their employees' earned wages “when [the company] entered chapter 7 liquidation” instead of on the established payday date. Morgan, 166 Wn.2d at 535 n.1. B. Ellerman Exempted Low-Level Managers and Supervisors from Liability under the WRA Because They Lack Control over the Decision To Pay Wages ¶24 Our decision in Ellerman, on which the defendants rely, does not cut off the liability of officers, vice [*14] principals, or agents upon the filing for bankruptcy. Instead, our discussion of control in Ellerman exempted low-level managers and supervisors from liability under the WRA, as our decision in Morgan confirms. ¶25 In Ellerman, we were asked whether a business manager had sufficient control over the payment of wages to be held liable under the WRA. Ellerman, 143 Wn.2d at 519 Since the terms “vice principal” and “agent” are not defined in the WRA, they are given their common law meanings in which they could encompass a manager or supervisor. Id. at 521-22. However, in Ellerman, we declined to hold the business manager liable under the WRA. Id. at 523. After explaining that the manager lacked control over the payment of wages and the legislature “intended to impose personal liability on only [individuals] who directly supervise or control the payment of wages,” we concluded the manager was not liable under the WRA. Id. 521-22. ¶26 In Morgan, we distinguished the Morgan officers from the Ellerman manager. Morgan, 166 Wn.2d at 536. In Morgan, it was clear that the officers “both had authority over the payment of wages.” Id. We went on to note that “the wages owed were accrued prior to the chapter 7 conversion” 14 and that the “legislature 13 The concurring opinion asserts that the mental element of the WRA is not subject to a liberal construction because it is not ambiguous and because it is a criminal statute. No party argues that the mental element of the WRA should be given a narrow construction. Instead, the defendants assert that they lacked the necessary control over wages to be held liable as officers, vice principals, or agents. As a result, we do not comment here on the proper construction of the mental element of the WRA. 14 The amicus brief of Washington Employment Lawyers intended … to impose personal liability [*15] on the officers in cases like this because the officers control the financial decisions of the corporation.” Id. Therefore, we rejected the officers' lack of control argument, declaring “bankruptcy of the corporation is not a means to escape personal liability by those who failed to pay wages owed.” Id. ¶27 Acknowledging that this language in Morgan supports Allen's position, the defendants attempt to distinguish it on the basis that in Morgan we decided “whether financial status, specifically bankruptcy under chapter 7 liquidation, is a valid defense to negate the finding of a willful failure to pay wages owed to employees.” Id. at 531 (emphasis added). The defendants argue that Morgan 's holding is limited to the second element under the WRA, willfulness, since the court framed the question as one dealing with the element of willfulness. The defendants therefore assert that the court's language in Morgan clarifying why the WRA requires an officer to have control over the payment of wages is dicta and not binding. Rather, they argue that Ellerman 's holding precludes a finding of personal liability since they lacked control over the payment of wages after the chapter 7 bankruptcy [*16] filing took place. ¶28 The defendants' argument attempts to isolate both the Ellerman and Morgan holdings and ignores the language of the WRA. HN17[ ] Before the court can reach the question of whether the withholding of wages was willful under the WRA, it must first determine if an individual qualifies as a member of the class of individuals designated as potentially liable under the statute. See RCW 49.52.050 (requiring an individual to be an “officer, vice principal or agent” and a willful withholding of wages to establish liability). The Morgan court concluded that the officers held the necessary control to qualify as officers under the WRA, despite the fact that the casino's status had been converted into a chapter 7 bankruptcy. See Morgan, 166 Wn.2d at 536. As a result, the court's language rejecting the officers' argument that “the failure to pay the[ ] wages was Association discusses at length the issue of when Allen's wages accrued, claiming that it is the only way that Morgan can be distinguished from the present case. The issue of wage accrual appears to be a heavily fact-dependent inquiry, and as the case is on a motion for summary judgment, the district court has yet to weigh in on these issues. In addition, this would be a superficial way for the court to distinguish Morgan, given its language that directly addresses the main issues contested here. As a result, the court need not and does not address the question about when Allen's wages accrued. 2017 Wash. LEXIS 95, *13 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 20 of 24 Page 12 of 15 Katherine Parker beyond their control” was not dicta, but a necessary first step in the court's analysis. Id. at 535. Consequently, our analysis in Morgan controls. The defendants make the same argument the officers in Morgan made, namely that they lacked control over the payment of wages and therefore cannot be held liable under the WRA. We once again reject the argument that the filing of [*17] chapter 7 bankruptcy precludes holding an officer, vice principal, or agent personally liable under the WRA. III. An Officer, Vice Principal, or Agent's Participation in the Decision To File the Chapter 7 Bankruptcy Petition Tends To Show a Willful Withholding of Wages ¶29 We also answer the second certified question in the affirmative. HN18[ ] An officer's participation in the decision to file the chapter 7 bankruptcy petition, where this decision effectively terminated the officer's employment and thus the ability to control payment decisions, makes it more likely that an officer may be held liable under the WRA because it shows willfulness, the second element required by the WRA. ¶30 HN19[ ] To succeed in an action under the WRA, a claimant must show both (1) the individual being sued is an officer, vice principal, or agent of the claimant's employer who has control over the payment of wages and (2) the individual willfully withheld the claimant's wages. See RCW 49.52.050; see also Ellerman, 143 Wn.2d at 523. We read the district court's second question as one dealing with the second element of the WRA—willfulness. We hold that HN20[ ] an officer's participation in the decision to file the chapter 7 bankruptcy petition alters the WRA analysis because [*18] it tends to show willfulness on the part of the officer. ¶31 In Schilling, we discussed the element of willfulness under the WRA. We held that HN21[ ] the “nonpayment of wages is willful ‘when it is the result of a knowing and intentional action.’” Schilling, 136 Wn.2d at 160 (quoting Lillig v. Becton-Dickinson, 105 Wn.2d 653, 659, 717 P.2d 1371 (1986)). We further explained that “there are two instances when an employer's failure to pay wages is not willful: … ‘either by a finding of carelessness or by the existence of a bona fide dispute.’” Id. (quoting Pope v. Univ. of Wash., 121 Wn.2d 479, 491 n.4, 852 P.2d 1055, 871 P.2d 590 (1993)). “[C]arelessness … suggests errors in bookkeeping or other conduct of an accidental character,” and a bona fide dispute exists when there is “a ‘fairly debatable’ dispute over whether an employment relationship exists, or whether all or a portion of the wages must be paid.” Id. at 161 (citing Brandt v. Impero, 1 Wn. App. 678, 680-81, 463 P.2d 197 (1969)). In Schilling, we specifically rejected a “financial inability to pay” exception to the WRA, concluding that an officer's failure to pay was willful under the WRA in circumstances where the corporation lacked sufficient funds to pay wages. 15 Id. at 164-66 . ¶32 We also discussed the element of willfulness under the WRA in Morgan. 166 Wn.2d at 536-37. There, we reasoned that HN22[ ] officers, vice principals, or agents should be held liable under the WRA for their willful decisions that impact the payment of wages: [*19] The legislature intended … to impose personal liability on the officers in cases like this because the officers control the financial decisions of the corporation. There are many examples that highlight the need for such risk of personal liability. The officers decide whether to pay one debt over another (e.g., wages). The officers have the choice to file bankruptcy or, say, close the business and pay its debts (including wages). The officers decide whether to continue running an inadequately capitalized corporation while hoping for a change in financial position. Id. HN23[ ] The WRA imposes personal liability on an officer for such decisions because “the officers control the choices over how the corporation's money is used.” Id. at 537. And all of these decisions constitute willful action taken under the WRA. ¶33 Contrary to the defendants' assertions, we do not subject any business decision to potential liability under the WRA. As discussed above, Morgan already held that individuals may be held liable under the WRA in circumstances of chapter 7 bankruptcy. The defendants offer no evidence that Morgan resulted in a business environment where management prematurely leaves corporations in financial [*20] distress. Rather, this decision is consistent with our reasoning in Schilling and Morgan. The defendants do not argue a recognized exception to the willfulness element of the WRA as discussed in Schilling. Instead, they say they lacked 15 The concurring opinion argues that the court cannot reject a “‘financial inability to pay’” defense to criminal liability under the . The WRA creates criminal liability and provides a civil remedy when an employer willfully withholds wages. This case is about the civil remedy available under the WRA. The criminal aspect of the statute was not briefed by the parties and is not before us. 2017 Wash. LEXIS 95, *16 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 21 of 24 Page 13 of 15 Katherine Parker control. However, the defendants misapprehend when having control is critical in circumstances of bankruptcy. As discussed above, we are most concerned about whether the wages that employees have earned were withheld. HN24[ ] A bankruptcy does not excuse the willfulness of an individual's exercise of his or her control to not pay wages, especially in circumstances where the decision to file for chapter 7 bankruptcy is controlled by the individual exercising control over wages. See id. at 536 (concluding “bankruptcy of the corporation is not a means to escape personal liability by those who failed to pay wages owed” ). ¶34 Here, the defendants chose to retain Allen, chose when to file for bankruptcy, and, most importantly, chose to withhold his wages. Unlike the business manager in Ellerman, the defendants had full control over the decision to pay wages up until they chose to file for chapter 7 bankruptcy. Then, the defendants chose to put further payment of employee wages [*21] beyond their control by filing a chapter 7 bankruptcy petition. In addition, the defendants chose to pay insurance costs with company funds before they paid employee wages in full. The defendants' decision to put the payment of employee wages beyond their control by filing a chapter 7 petition tends to show their willful withholding of wages under the WRA. As a result, individuals like the defendants may be held liable for their decision not to pay wages accordingly. CONCLUSION ¶35 We reject the defendants' invitation to reformulate the certified questions. We answer both certified questions in the affirmative. First, we hold that an officer, vice principal, or agent may be held liable under the WRA when his or her employment was terminated due to chapter 7 bankruptcy and the payday date for wages owed came after the filing for chapter 7 bankruptcy. This conclusion reflects our holdings in both Ellerman and Morgan. And, in these circumstances, we consider whether the earned wages were withheld on the date when the individuals chose to file for chapter 7 bankruptcy, rather than on the established payday date if such a date came after the chapter 7 filing. ¶36 Second, we hold that an officer, vice [*22] principal, or agent's participation in the decision to file the chapter 7 bankruptcy petition tends to show a willful withholding of wages under the WRA. We recognize that the legislature intended to hold individuals liable in these circumstances because of the control they exercise over payment decisions. Having answered the certified questions in the affirmative, we remand the case to the district court for proceedings consistent with this opinion. FAIRHURST, C.J., and JOHNSON, OWENS, STEPHENS, and YU, JJ., concur. Concur by: Sheryl Gordon McCloud Concur ¶37 GORDON MCCLOUD, J. (concurring) — agree with the majority's answer to the certified questions, but I write separately to emphasize the limits of those holdings. ¶38 The first certified question asks whether “an officer, vice principal, or agent of an employer [is] liable for a deprivation of wages under RCW 49.52.050 when his or her employment with the employer (and his or her ability to control the payment decision) was terminated before the wages became due and owing.” Order Vacating J. & Certifying Questions to Wash. Supreme Ct. (Order), [*23] Allen v. Dameron, No. C14-1263RSL, at 3-4 (W.D. Wash. Apr. 28, 2016). The majority says that the answer is yes because (1) those entities are listed as potential defendants in the cited statute and (2) termination of those entities' employment prior to their payday does not insulate them from liability. . It concludes that this means that such entities “may be held personally liable under the WRA [(wage rebate act), RCW 49.52.050].” Id (emphasis added). I agree. ¶39 I write separately to clarify that “may” means “may.” The other prerequisites to WRA liability must still be met before such liability can attach. Specifically, plaintiffs must still prove the statute's mental element: that the deprivation of wages was done “[w]ilfully and with intent to deprive.” RCW 49.52.050(2). ¶40 The majority is generally correct that the WRA must be liberally construed to advance the legislative purpose “‘to protect employee wages and assure payment.’” (quoting Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 159, 961 P.2d 371 (1998)). But this mental element of the statute we are construing today—RCW 49.52.050(2)—is not subject to a liberal construction for two reasons. ¶41 First, RCW 49.52.050(2) is not ambiguous. The legislature clearly and expressly included within that statute the mental element of “[w]ilful[ness] and … intent to deprive.” RCW 49.52.050(2). When a statute [*24] 2017 Wash. LEXIS 95, *20 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 22 of 24 Page 14 of 15 Katherine Parker contains such an explicit mens rea requirement, the courts must enforce it. ¶42 Second, RCW 49.52.050(2) is a criminal statute. It states that any covered person who commits any act listed in subsections (1)-(5) “[s]hall be guilty of a misdemeanor.” RCW 49.52.050. Thus, even if it were ambiguous, it would subject to a strict, not a liberal, construction. 16 ¶43 I therefore agree with the majority's answer that the entities listed in the first question, which are the same as the entities listed as potential defendants in RCW 49.52.050, “may” be held liable. But the plaintiffs in this case must still prove the other prerequisites to WRA liability, including willfulness and intent, in order to prevail. ¶44 The second certified question asks whether a defendant's “participation in the decision to file the Chapter 7 bankruptcy petition that effectively terminated his or her employment and ability to control payment decisions alter[s] the analysis” and, “[i]f so, how.” Order at 3-4. Once again, the majority correctly answers in the affirmative and explains that, in the context of the record we have been supplied with in this case, “an officer's participation in the decision to file the chapter 7 bankruptcy petition alters the WRA analysis because it tends to show willfulness on [*25] the part of the officer.” . ¶45 The majority does, however, go on to state that we have “specifically rejected a ‘financial inability to pay’ exception to the WRA.” Id. (quoting Schilling, 136 Wn.2d at 164-66); see also id (quoting Morgan v. Kingen, 166 Wn.2d 526, 536-37, 210 P.3d 995 (2009)). 16 The fact that the plaintiffs in this case seek a civil remedy does not change that. RCW 49.52.070 provides a civil remedy to employees who are victimized by the willful and intentional deprivation of wages criminalized by RCW 49.52.050(2). But it is still the meaning of RCW 49.52.050(2) that we were asked to interpret. And because that statute has criminal applications, we must apply the same interpretive rules to the mens rea in that statute that we apply when interpreting other criminal statutes. See United States v. Thompson/Center Arms Co., 504 U.S. 505, 518 n.10, 112 S. Ct. 2101, 119 L. Ed. 2d 308 (1992) (plurality opinion) (rules of statutory construction applicable to criminal statute—here, rule of lenity—applies to a tax statute with both civil and criminal applications); id. at 519 (Scalia, J., concurring in judgment) (expressly agreeing with the plurality's application of that interpretive rule). ¶46 Once again, I write to emphasize my understanding that this is a holding limited to the particular facts presented here. Indeed, the majority could not completely reject a “financial inability to pay” defense to criminal liability without contradicting controlling United States Supreme Court precedent. Bearden v. Georgia, 461 U.S. 660, 672-73, 103 S. Ct. 2064, 76 L. Ed. 2d 221 (1983) (revoking probation for nonwillful failure to pay fine “would be contrary to the fundamental fairness required by the Fourteenth Amendment [to the federal constitution]”). Thus, despite some broad statements in the majority (and in the Schilling and Morgan decisions on which it relies) about financial inability to pay being irrelevant to criminal consequences, I take the majority's actual holding as far more narrow. It is a holding about timing: [D]efendants … say they lacked control. However, the defendants misapprehend when having control is critical in circumstances of bankruptcy. … A bankruptcy does not excuse the willfulness of an individual's exercise of his or her control to not pay wages, especially in circumstances [*26] where the decision to file for chapter 7 bankruptcy is controlled by the individual exercising control over wages. Majority at 16-17. ¶47 To the extent the majority opines that the defendants' decisions to file a chapter 7 bankruptcy petition supports an inference of willfulness, I read that as a holding based on the facts of this case. Specifically, as the majority explains, “the defendants chose to retain Allen, chose when to file for bankruptcy, and, most importantly, chose to withhold his wages.” Id. [T]he defendants had full control over the decision to pay wages up until they chose to file for chapter 7 bankruptcy. Then, the defendants chose to put further payment of employee wages beyond their control by filing a chapter 7 bankruptcy petition. In addition, the defendants chose to pay insurance costs with company funds before they paid employee wages in full. Id. Given these specific facts, I completely agree with the majority's conclusion that “defendants' decision to put the payment of employee wages beyond their control by filing a chapter 7 petition tends to show their willful withholding of wages under the WRA.” Id. ¶48 With these observations about the limits of the majority's holding, I [*27] concur. GONZÁLEZ, J., concurs. with GORDON MCCLOUD, J. 2017 Wash. LEXIS 95, *24 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 23 of 24 Page 15 of 15 Katherine Parker End of Document 2017 Wash. LEXIS 95, *27 Case 2:17-cv-00177-JCC Document 15-1 Filed 02/23/17 Page 24 of 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 [PROPOSED] ORDER GRANTING DEFENDANTS’ PARTIAL MOTION TO DISMISS - 1 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 The Honorable John C. Coughenour UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT SEATTLE DESIREE KEEFE, Plaintiff, v. CROWNE PLAZA HOTEL SEATTLE; INTERCONTINENTAL HOTELS GROUP; INTERSTATE HOTELS AND RESORTS; and AL ROSALES; BRUCE McCURDY; CHRISTY SMITH; COLIN SAGE HAMMOND, Defendants. Case No. 2:17−cv−00177−JCC [PROPOSED] ORDER GRANTING DEFENDANTS’ PARTIAL MOTION TO DISMISS NOTING DATE: March 17, 2017 Pending before the Court is Defendants’ Partial Motion to Dismiss. Defendants Defendants (1) InterContinental Hotels Group Resources, Inc. (incorrectly named in this lawsuit as “InterContinental Hotels Group”); (2) Interstate Hotels, LLC (incorrectly named in this lawsuit as “Interstate Hotels and Resorts”); (3) Al Rosales; (4) Bruce McCurdy; and (5) Cristy Smith (incorrectly named in this lawsuit as “Christy Smith”) (collectively “Defendants”), seek an Order dismissing the following counts of Plaintiff’s Complaint: Count I, which alleges assault; Count II, which alleges battery; Count III, which alleges negligent infliction of emotional distress; and Count IV, which alleges wrongful discharge. Defendants also seek dismissal of the remaining counts (Counts V through VII) as to Individual Defendants Al Rosales, Bruce McCurdy, Cristy Smith, and Colin Sage Hammond (the “Individual Defendants”). Having Case 2:17-cv-00177-JCC Document 15-2 Filed 02/23/17 Page 1 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 [PROPOSED] ORDER GRANTING DEFENDANTS’ PARTIAL MOTION TO DISMISS - 2 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 considered the motion, submissions, and applicable law, the Court determines that Defendants’ motion should be granted. Accordingly, the Court hereby: ORDERS that Defendants’ Partial Motion to Dismiss is GRANTED. The Court further ORDERS that Count I alleging Assault is time-barred and therefore is DISMISSED WITH PREJUDICE as to all Defendants. The Court further ORDERS that Count II alleging Battery is time-barred and therefore is DISMISSED WITH PREJUDICE as to all Defendants. The Court further ORDERS that Count III alleging Negligent Infliction of Emotional Distress is time-barred and therefore is DISMISSED WITH PREJUDICE as to all Defendants. The Court further ORDERS that Count IV fails to state a claim upon which relief can be granted and therefore is DISMISSED WITH PREJUDICE as to all Defendants. The Court further ORDERS that Counts V-VII are DISMISSED WITH PREJUDICE as to the Individual Defendants Rosales, McCurdy, Smith, and Hammond. Signed at Seattle, Washington on this _____ day of 2017. ________________________________ The Honorable John C. Coughenour U.S. District Judge Case 2:17-cv-00177-JCC Document 15-2 Filed 02/23/17 Page 2 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 [PROPOSED] ORDER GRANTING DEFENDANTS’ PARTIAL MOTION TO DISMISS - 3 Case No. 2:17−cv−00177−JCC LITTLER MENDELSON, P.C. One Union Square 600 University Street, Suite 3200 Seattle, WA 98101.3122 206.623.3300 CERTIFICATE OF SERVICE I am a resident of the State of Washington, over the age of eighteen years, and not a party to the within action. My business address is One Union Square, 600 University Street, Ste. 3200, Seattle, WA 98101. I hereby certify that on February 23, 2017: X I ELECTRONICALLY FILED the foregoing document(s) with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to the person(s) set forth below. I further certify that on February 23, 2017, I served true and correct copies of the foregoing document(s) by: X EMAIL to the email address(es) of the person(s) set forth below: Attorneys for Plaintiffs Bethany C. Mito, WSBA #42918 Risa D. Woo, WSBA #35411 Lee & Lee, PS 1001 Fourth Avenue, Suite 4368 Seattle, WA 98154 Tel: 206.458.6986 Fax: 206.458.6816 bethany.lee@leeandleelaw.com risa.woo@leeandleelaw.com d.sho.ly@leeandleelaw.com ariel.fields@leeandleelaw.com I declare under the penalty of perjury under the laws of the State of Washington that the above is true and correct. Executed on February 23, 2017, at Seattle, Washington. s/ Deborah A. Hatstat Deborah A. Hatstat dhatstat@littler.com LITTLER MENDELSON, P.C. Firmwide:145659395.2 079499.1038 Case 2:17-cv-00177-JCC Document 15-2 Filed 02/23/17 Page 3 of 3