Case Title: Smoldt v. Henkels & McCoy, Inc.

Citation: 

Docket Number: S48007

State: oregon

Court: Oregon Supreme Court

Date: 2002-09-06T00:00:00Z

Document:
Filed: September 6, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON
RICHARD SMOLDT,
Petitioner on Review,
	v.
HENKELS & McCOY, INC.,
Respondent on Review.
(C96110508; CA A97994; SC S48007)
	En Banc
	On review from the Court of Appeals.*
	Argued and submitted March 13, 2002.
	Jacqueline L. Koch, of Koch & Deering, Portland, argued the
cause for petitioner on review.  With her on the brief was James
Dana Pinney, Tualatin.
	Dian S. Rubanoff, of Williams, Zografos & Peck, LLP,
Portland, argued the cause for respondent on review.  With her on
the brief was Paula A. Barran, Portland.
	RIGGS, J.
	The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
	*Appeal from Linn County Circuit Court, Daniel R. Murphy, Judge. 168 Or App 657, 7 P3d 638 (2000).
		RIGGS, J. 
		The issue in this case is whether the existence of a
collective bargaining agreement (CBA), standing alone, prevents
an employee subject to that agreement from pursuing a claim for
wages in excess of those specified in the CBA.  Employee, Richard
Smoldt, had an individual employment contract with employer,
Henkels & McCoy, Inc.  A CBA also covered employee's position. 
The wage rate provided by the individual contract was higher than
the rate provided by the CBA.  When employer paid wages according
to the lower rate provided by the CBA, employee sought recovery
from employer through a statutory wage claim.  Both parties moved
for summary judgment, and the trial court granted employer's
motion.  On appeal, the Court of Appeals affirmed.  Smoldt v.
Henkels and McCoy, Inc., 168 Or App 657, 7 P3d 638 (2000). 
Because we conclude that the CBA does not bar employee's wage
claim under either state or federal law, we reverse and remand to
the trial court for further proceedings.  
		We review the facts in the light most favorable to
employee, against whom the trial court granted summary judgment,
to determine whether employer is entitled to summary judgment.  
		Employer hired employee as an equipment operator at a
rate of $14.48 per hour.  A CBA between employer and Local 659 of
the International Brotherhood of Electrical Workers, however,
applied to employee's position and set wages for that position at
$11.48 per hour.  Employee worked for employer from May 24, 1996,
to June 1, 1996.  After receiving his first paycheck, employee
discovered that employer had paid him at the $11.48 hourly rate,
instead of the $14.48 hourly rate.  Employer refused to adjust
employee's paycheck to reflect the agreed-upon $14.48 rate. 
Consequently, employee terminated his employment.  
		Employee filed an action to collect unpaid wages under
ORS 652.140(2), (1) penalties under ORS 652.150, (2) and attorney fees
under ORS 652.200. (3)  As noted, both parties moved for summary
judgment.  In support of its motion, employer argued that, under
both ORS 652.140(5) (4) and section 301 of the National Labor
Management Relations Act (NLRA), 29 USC § 185(a) (2001) (section
301), (5) the CBA preempted employee's wage claim.  The trial court
granted employer's motion for summary judgment. 
		In affirming that ruling, the Court of Appeals
determined that preemption occurred through section 301, but not
through ORS 652.140(5).  Smoldt, 168 Or App at 663 and 666.  We
allowed review.  
		The relevant inquiry here is whether a CBA prevents an
individual subject to that agreement from pursuing a claim for
wages that exceed the terms of the CBA.  The CBA constitutes such
a barrier if state or federal law so provides, but not otherwise.
		We first turn to Oregon law.  ORS 652.140(5) is part of
a larger statutory scheme that includes ORS 652.140(2), which
requires employers to pay all wages immediately after an employee
quits, so long as the employee provides adequate notice.  If an
employer fails to pay wages as required by ORS 652.140(2), then
penalties apply under ORS 652.150, and the employee subsequently
may seek attorney fees under ORS 652.200.   
		Whether the CBA bars employee's wage claim, under ORS
652.140(5), depends upon the meaning of the words "otherwise
provides for the payment of wages upon termination of
employment."  When interpreting a statutory provision, this court
follows the now familiar interpretive methodology set out in PGE
v. Bureau of Labor and Industries, 317 Or 606, 610-12, 859 P2d
1143 (1993).  Under those guidelines, words of common usage are
given their "plain, natural, and ordinary meaning."  PGE, 317 Or
at 611.  Webster's Third New Int'l Dictionary, 1598 (unabridged
ed 1993), defines "otherwise" as "in a different way or manner:
differently."  When considered in the context of the other
provisions of ORS 652.140, the meaning of "otherwise" is
unambiguous. (6)  The plain meaning of ORS 652.140(5) excuses an
employer from the requirements found in other parts of ORS
652.140, including subsection (2), only if a CBA affirmatively
provides different requirements regarding wage payments on
termination of employment.  The excerpts from the CBA contained
in the record do not include requirements for the payment of
wages upon voluntary termination.  Consequently, the trial court
erred by granting summary judgement. 
		Without a sufficient basis for summary judgment under
Oregon law, the validity of the trial court's decision entirely
depends on section 301.  The United States Supreme Court has
interpreted section 301 to preempt a party to a CBA from pursuing
claims under supplemental contracts when those claims arise
directly from rights granted in a CBA or when a party's claims
are "substantially dependent" on interpretation of a CBA. 
Caterpillar, Inc. v. Williams, 482 US 386, 394, 107 S Ct 2425, 96
L Ed 2d 318 (1987). 
		Employee's statutory wage claim does not arise directly
from rights granted by the CBA.  The portion of the CBA contained
in the record includes provisions related to layoffs and
involuntary termination, but does not include provisions related
to voluntary termination by an employee.  Moreover, employee
seeks enforcement of rights found in an individual employment
contract, rather than rights granted by the CBA.  As the Supreme
Court has explained, "a plaintiff covered by a collective-bargaining agreement is permitted to assert legal rights
independent of that agreement, including state-law contract
rights, so long as the contract relied upon is not a collective-bargaining agreement."  Caterpillar, 482 US at 396 (citing Allis-Chalmers Corp. v. Lueck, 471 US 202, 211, 105 S Ct 1904, 85 L Ed
2d 206 (1985) (emphasis in original)).   
		Additionally, employee's claim is not "substantially
dependent" on interpretation of the CBA.  At most, employee's
claim requires reference to the CBA for the purpose of
understanding the disparity between the wage rate provided by the
CBA and the wage rate provided by employee's individual contract. 
The CBA is relevant evidence in this case, but mere reference to
the CBA does not amount to "interpretation."  Livadas v.
Bradshaw, 512 US 107, 124-25, 114 S Ct 2068, 129 L Ed 2d 93
(1994).
		Employer further argues that federal labor law bars the
enforcement of individual contracts that are inconsistent with a
CBA.  Employer's argument hinges on the meaning of J.I. Case Co.
v. NLRB, 321 US 332, 64 S Ct 576, 88 L Ed 762 (1944), in which
the Supreme Court held that individual contracts are invalid if
they diminish employee rights under a CBA or detract from the
NLRA.  Employer argues that J.I. Case stands for a broader
prohibition against enforcement of any individual contract
providing an employee with more favorable terms than those
provided by a CBA.  Employer reads too much into J.I. Case.  The
Supreme Court did not adopt a blanket rule prohibiting
enforcement of all individual contracts that provide more
favorable terms.  Rather, the Court limited its analysis to
whether the possibility of an employee receiving more favorable
terms than those provided by a CBA warranted a general rule
allowing the enforcement of individual contracts, regardless of
inconsistency.  Id. at 338.  The Court specifically reserved
authority for "appropriate forums" to determine the
enforceability of more favorable individual contracts on a case-by-case basis.  
		In sum, contrary to employer's arguments, neither
section 301 nor J.I. Case precludes employee's wage claim. 
Employee's individual contract does not arise directly from the
CBA, is not substantially dependent upon interpretation of the
CBA, and does not detract from the CBA or the NLRA.  The trial
court, therefore, erred by granting employer's motion for summary
judgement. (7)  
		The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.



1. 	ORS 652.140(2) provides:
		"When an employee who does not have a contract for
a definite period quits employment, all wages earned
and unpaid at the time of quitting become due and
payable immediately if the employee has given to the
employer not less than 48 hours' notice, excluding
Saturdays, Sundays and holidays, of intention to quit
employment.  If notice is not given to the employer,
the wages shall be due and payable within five days,
excluding Saturdays, Sundays, and holidays, after the
employee has quit, or at the next regularly scheduled
payday after the employee has quit, whichever event
first occurs."

2. 	Subject to some limitations, ORS 652.150 requires an
employer who does not satisfy the requirements of ORS 652.140(2)
to pay an employee, who has quit employment, at the employee's
regular wage rate for eight hours per day until all wages are
paid or legal action has been commenced.  

3. 	If an employee prevails in an action for unpaid wages,
ORS 652.200 requires an employer to reimburse the employee for
reasonable attorney fees incurred at trial and on appeal.

4. 	ORS 652.140(5) provides an exception to the
requirements of ORS 652.140(2) if a "collective bargaining
agreement otherwise provides for the payment of wages upon
termination of employment."

5. 	Section 301 provides:  
		"Suits for violation of contracts between an
employer and a labor organization representing
employees in an industry affecting commerce as defined
in this chapter, or between any such labor
organizations, may be brought in any district court of
the United States having jurisdiction of the parties,
without respect to the amount in controversy or without
regard to the citizenship of the parties."  

6. 	The Court of Appeals determined that the statute was
ambiguous in that regard and proceeded in its analysis to
consider legislative history.  Ultimately, the court determined
that legislative history supported the conclusion that ORS
652.140(5) did not preclude employee's claim.

7. 	Employee also filed a motion for summary judgment,
which the trial court denied.  Although employee challenged that
denial before the Court of Appeals, he failed to bring such a
challenge before this court.