Title: Taylor v. Werner Enterprises, Inc.
Citation: N/A
Docket Number: S44921
State: Oregon
Issuer: Oregon Supreme Court
Date: November 4, 1999

Filed: November 4, 1999

IN THE SUPREME COURT OF THE STATE OF OREGON

KEN TAYLOR,

	Petitioner on Review,

	v.

WERNER ENTERPRISES, INC.,

	Respondent on Review.

(CC DCV95-6616; CA A94791; SC S44921)

	En Banc

	On review from the Court of Appeals.*

	Argued and submitted November 3, 1998.

	Jacqueline L. Koch, of Findling &amp; Johnson LLP, Portland,
argued the cause for petitioner on review.  With her on the brief
was James Dana Pinney, Tualatin.

	R. Daniel Lindahl, of Bullivant, Houser, Bailey, Pendergrass
&amp; Hoffman, Portland, argued the cause for respondent on review. 
With him on the brief was John T. Kaempf, Portland.

	Richard David Wasserman, Assistant Attorney General, Salem,
filed a brief for amicus curiae Bureau of Labor and Industries. 
With him on the brief were Hardy Myers, Attorney General, and
Michael D. Reynolds, Solicitor General.

	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 Clackamas County Circuit Court,

	151 Or App 200, 948 P2d 1260 (1997).

	RIGGS, J.

	In this wage case, plaintiff contends that defendant
Werner Enterprises, Inc. (Werner) violated ORS 652.150 by failing
to pay plaintiff's wages upon termination of his employment and
violated ORS 652.610 by withholding $400 from his wages as a
bond.  The trial court concluded that Werner was plaintiff's
employer and had not violated those statutes.  The Court of
Appeals affirmed without opinion.  Taylor v. Werner Enterprises,
Inc., 151 Or App 200, 948 P2d 1260 (1997).  We conclude that
Werner was plaintiff's employer and is liable for the acts of
which plaintiff complains.  We reverse the decision of the Court
of Appeals and the judgment of the circuit court, and remand the
case to the circuit court for further proceedings. 

	We take the facts from the trial court's findings and
from the record.  Plaintiff, a long-haul truck driver, signed an
employment contract with Driver Management, Inc. (DMI) in 1994. 
DMI is a wholly owned subsidiary of Werner.  DMI hires drivers
and leases their services to Werner.  The lease, however, was not
produced at trial.  Werner gives those drivers their assignments
and supervises their driving.  Werner pays DMI a "per mile" rate
for the drivers' services.  DMI also pays the drivers a "per
mile" rate.  

	Both DMI and Werner are incorporated in the state of
Nebraska.  Plaintiff lives in Oregon.  In 1994, plaintiff
contacted Werner by telephone regarding employment.  Werner
directed him to its terminal in Denver, Colorado.  Plaintiff
traveled to Werner's terminal in Denver and completed and signed
his employment application.  The application disclosed that DMI
was plaintiff's prospective employer.  Plaintiff was hired and,
over the course of his employment, maintained his residence in
Oregon and drove throughout the 48 contiguous states and Canada. 
DMI paid plaintiff for his services by depositing funds directly
into plaintiff's Oregon bank account.

	When plaintiff signed his contract with DMI, he also
signed two agreements authorizing DMI to withhold money from his
paychecks.  The first agreement authorized DMI to withhold $10
per week from his wages as a "bond," until a total of $400 had
been withheld.  That agreement specified that the bond would be
refunded approximately 60 days after plaintiff's employment
ended, as long as there were no claims against the bond and
plaintiff returned his Werner identification card.  The second
agreement provided, in part:  "In addition, I authorize Driver
Management, Inc., to withhold from my final paycheck and/or bond
any and all money due the Company at the time of my termination." 

	In February 1995, plaintiff gave one month's notice to
Werner that he was quitting his job.  At that time, DMI already
had withheld $400 from plaintiff's wages under the bond
agreement.  On March 9, 1995, Werner sent one of its employees to
plaintiff's home in Portland to pick up plaintiff's truck.  On
March 15, 1995, DMI issued plaintiff's final wage statement in
the amount of $0.  The statement reflected a deduction of $500.80
from plaintiff's wages, which DMI had withheld until it could
determine whether plaintiff owed it any money.  On March 24,
1995, after the truck had been inspected, DMI paid plaintiff the
$500.80 that it had withheld.  On May 12, 1995, DMI refunded to
plaintiff the $400 that it had been holding under the bond
agreement. 

	On June 29, 1995, plaintiff brought this action against
Werner.  The complaint named only Werner, not DMI, as defendant. 
Plaintiff made two claims.  First, he claimed that Werner had
violated ORS 652.150 by withholding wages from his final
paycheck.  That statute provides for a penalty of up to 30 days'
wages "[i]f an employer willfully fails to pay any wages or
compensation of any employee whose employment ceases, as provided
in ORS 652.140 * * *."  According to plaintiff, ORS 652.150
required Werner to pay him all his wages due on the day that his
employment ended.  Plaintiff sought statutory penalties of
$3,736.20 and attorney fees for Werner's alleged noncompliance
with that requirement.

	Second, plaintiff claimed that, by withholding the $400
bond, Werner violated ORS 652.610(3), which limits the
circumstances under which employers may withhold employees'
wages.  ORS 652.610(3) provides, in part:  "No employer may
withhold, deduct or divert any portion of an employee's wages

* * *."  In that claim, plaintiff sought the $200 statutory
penalty mandated by ORS 652.615 and attorney fees. 

	The trial court transferred the case to mandatory
arbitration under ORS 36.405.  The arbitrator granted summary
judgment to Werner.  Plaintiff requested a trial de novo.  ORS
36.425(2)(a).(1)								

	At trial, Werner argued that:  (1) plaintiff had sued
the wrong party because DMI, not Werner, had withheld plaintiff's
bond and wages; (2) even if Werner were the proper defendant,
Nebraska law, not Oregon law, governed the parties' employment
relationship;(2) and, (3) even under Oregon law, the withholdings
were permissible.  

	The trial court ruled for plaintiff on the first two
issues.  The court first held that Werner was plaintiff's
employer and, therefore, was the proper defendant.  Specifically,
the court found that Werner had supervised and controlled
plaintiff's driving, that Werner had issued plaintiff probation
reports, that plaintiff had driven a Werner truck and had worn a
Werner uniform, and that DMI had had no actual control over
plaintiff.  Second, the court concluded that Oregon law governed
the parties' employment relationship.  

	As to the third issue, the trial court held that the
withholdings did not violate Oregon law and ruled in defendant's
favor on that basis.  In ruling against plaintiff on his claim
based on ORS 652.150, the court reasoned that Werner did not
withhold plaintiff's final paycheck for an unreasonable amount of
time and that plaintiff had agreed to that withholding.  The
trial court also held that Werner did not violate ORS 652.610  
by withholding the $400 "bond," because the bond was for
plaintiff's benefit, the money ultimately did not go to the
employer, and plaintiff had agreed to the withholding.  As noted,
the Court of Appeals affirmed without opinion. 

	We turn to the relevant statutes.  ORS 652.150
provides, in part:

		"If an employer willfully fails to pay any wages
or compensation of any employee whose employment
ceases, as provided in ORS 652.140 * * * then, as a
penalty for such nonpayment, the wages or compensation
of such employee shall continue from the due date
thereof at the same hourly rate for eight hours per day
until paid or until action therefor is commenced;
provided, that in no case shall such wages or
compensation continue for more than 30 days from the
due date[.]"

ORS 652.140(2) provides, in part:  

		"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. * * *."

ORS 652.610(3) provides, in part:

		"No employer may withhold, deduct or divert any
portion of an employee's wages unless:

		"(a) The employer is required to do so by
law;

		"(b) The deductions are authorized in writing by
the employee, are for the employee's benefit, and are
recorded in the employer's books;

		"(c) The employee has voluntarily signed an
authorization for a deduction for any other item,
provided that the ultimate recipient of the money
withheld is not the employer, and that such deduction
is recorded in the employer's books[.]"

Finally, ORS 652.360 provides, in part:

		"No employer may by special contract or any other
means exempt the employer from any provision of or
liability or penalty imposed by ORS 652.310 to 652.414
or by any statute relating to the payment of wages,
except insofar as the Commissioner of the Bureau of
Labor and Industries in writing approves a special
contract or other arrangement between an employer and
one or more of such employer's employees. * * *."

		Although Werner attempts to characterize the issues in
this case in a variety of ways, the critical and ultimately
determinative issue is whether Werner was plaintiff's employer
under Oregon law.  As to that issue, we look to ORS chapter 652. 
Unless Werner was plaintiff's employer under ORS 652.150 and ORS
652.610, Werner could not be liable for failure timely to pay
wages or for wrongfully withholding wages in the manner alleged
in plaintiff's complaint.  Our analysis of plaintiff's claims
under both of those statutes is parallel, and we address the
statutes -- and defendant's alleged failure to comply with them
 -- together.

		Whether Werner was plaintiff's employer under ORS
652.150 and ORS 652.610 are questions of statutory construction. 
Accordingly, we employ the interpretive methodology set out in
PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143
(1993).  In interpreting statutes, our task is to determine the
intent of the legislature.  Id. at 610.  The starting point in
that determination is an examination of the text and context of
the statute.  Id. at 610-11.  Words of common usage typically
should be given their plain, natural, and ordinary meaning.  Id.
at 611.

		ORS 652.310(1) provides the following definition of
"employer":

		"As used in ORS 652.310 to 652.414, unless the
context requires otherwise:

		"(1)'Employer' means any person who in this state,
directly or through an agent, engages personal services
of one or more employees * * *."

(Emphasis added.)  ORS 652.360, to which the definition of
"employer" in ORS 652.310(1) applies explicitly, itself applies
to "any statute relating to the payment of wages."  The statutes
on which plaintiff bases his claims, ORS 652.150 and ORS 652.610,
prohibit, respectively, untimely payment of wages and certain
withholdings of wages -- subjects that directly relate to the
"payment of wages."  Thus, the definition of employer in ORS
652.310(1) also applies to ORS 652.150 and ORS 652.610, and
controls our understanding of the scope of the term "employer"
and our analysis of Werner's obligations.

		The term "agent" in ORS 652.310(1 carries an ordinary
legal meaning.  See McIntire v. Forbes, 322 Or 426, 431, 909 P2d
846 (1996) ("Analysis of text also includes reference to well-established legal meanings for terms that the legislature has
used.").  Generally, an agent is one who has authority to act for
another in contractual dealings with third persons.  Barnes v.
Eastern &amp; Western Lbr. Co., 205 Or 553, 574, 287 P2d 929 (1955). 
Actual authority to act for another may be either express or
implied.  Wiggins v. Barrett &amp; Associates, Inc., 295 Or 679, 686,
669 P2d 1132 (1983).  A principal is bound by the act of its
agent if the agent acts within the scope of the agent's
authority.  County of Lincoln v. Fischer et al, 216 Or 421, 452,
339 P2d 1084 (1959).

		In this case, the trial court found and the evidence
indicates that Werner created DMI as a separate but wholly owned
subsidiary corporation for payroll purposes.  The trial court
also found that plaintiff drove a Werner truck and that plaintiff
served exclusively under the operational direction and control of
Werner, not DMI.  Further, the trial court found that Werner, not
DMI, hired and disciplined plaintiff.  DMI and plaintiff entered
into an employment contract that ultimately was intended to
provide plaintiff's driving services to Werner.  On these facts,
we conclude that DMI was Werner's agent and that Werner was an
employer of plaintiff within the meaning of ORS 652.150 and ORS
652.610(3). 

		Werner further argues that, because DMI is a separate
corporation and because plaintiff signed a form including the
statement, "Prospective employee hereby acknowledges that if
hired he or she will be an employee of DRIVER MANAGEMENT,
INCORPORATED, a Nebraska corporation," that only DMI, not Werner,
can be considered plaintiff's employer.  ORS 652.360, however,
provides, in part:

		"No employer may by special contract or any other
means exempt the employer from any provision of or
liability or penalty imposed by ORS 652.310 to 652.414
or by any statute relating to the payment of wages * *
*."

(Emphasis added.)  Werner claims that ORS 652.360 does not apply
to ORS 652.150 or ORS 652.610, because those statutes are not
named in ORS 652.360.  In so arguing, Werner ignores the
emphasized wording, which encompasses the statutes on which
plaintiff bases his claims.  As explained above, ORS 652.150 and
ORS 652.610 relate to the payment of wages.  Therefore, under ORS
652.360, the agreements signed by plaintiff cannot exempt Werner
from liability or any penalty imposed by Werner's violations of
ORS 652.150 and ORS 652.610.(3)

		We turn to whether Werner violated ORS 652.150, which
prohibits employers from willfully failing to pay wages owed
under, among other statutes, ORS 652.140.  ORS 652.140(2)
provides that wages are due immediately to an employee who quits
if the employee gives at least 48 hours' notice.  In this case,
plaintiff gave one month's notice before quitting his employment,
entitling him to be paid immediately.

		This court on several occasions has addressed the
meaning of "willfully fail to pay."  In State ex rel Nilsen v.
Johnston, 233 Or 103, 108, 377 P2d 331 (1962), the court provided
the following definition of the term "wilful" in ORS 652.150:

"'* * * the word "wilful" * * * does not
necessarily imply anything blamable, or any
malice or wrong toward the other party, or
perverseness or moral delinquency, but merely
that the thing done or omitted to be done was
done or omitted intentionally.  It amounts to
nothing more than this:  That the person
knows what he is doing, intends to do what he
is doing, and is a free agent.'

	"That definition excludes the individual who does not
know that his employee has left his employ or who has
made an unintentional miscalculation."

(quoting Davis v. Morris, 37 Cal App 2d 269, 274, 99 P2d 345, 348
(1940)) (emphasis added).(4)  In keeping with that definition, the
court concluded that employers willfully fail to pay their
employees when they "fail to compensate their employees although
they are fully aware of their obligation to do so."  Nilsen, 233
Or at 108.

	The question, then, is whether Werner, as the employer,
had, or can be imputed to have had, a level of awareness of its
obligation to pay plaintiff such that its failure to pay was
"willful."  We hold that it can.  The fact that Werner chose to
use the services of an agent, DMI, in arranging its employment of
plaintiff and other drivers does not relieve or otherwise
insulate Werner from its duties and responsibilities under ORS
652.150, nor does it lead to any reasonable inference that, by
assigning those tasks to another entity, Werner somehow absolved
itself of the knowledge that it would be liable for payment of
services that it received from plaintiff.  In that sense, Werner
knew what its agent, DMI, knew.  DMI issued a final wage
statement in the amount of $0.  That fact shows that there was
neither a mistake nor a calculation error, but rather an
intention not to pay wages when due.  DMI's ­- and, therefore,
Werner's -- failure to pay or to arrange for proper payment of
wages was willful.

	Finally, we turn to whether Werner, as plaintiff's
employer, withheld plaintiff's wages in violation of ORS 652.610. 
DMI withheld two separate amounts from plaintiff's final
paycheck:  $500.80 in regular wages and the $400 "bond."  

	The wording of ORS 652.610(3)(b) is unambiguous.  An
item must fall within its strictures to be deducted under it --
that is, the employee's written authorization must be given, and
the deduction must be recorded in the employer's books and must
be for the ultimate benefit of the employee.  ORS 652.610(3)(b). 
Potential liability of an employee to the employer is not a
reason that supports a lawful deduction.

	Similarly, ORS 652.610(3)(c) is unambiguous.  To be a
lawful deduction under that section, the employee must authorize
it voluntarily, the ultimate recipient of the money cannot be the
employer, and the deduction must be recorded in the employer's
books.  Werner argues that the withholding was lawful under ORS
652.610(3)(c) because the employer was not the "ultimate
recipient" of the money.  We reject that argument.  If Werner
needed the money to cover any liability that plaintiff owed it at
the time of plaintiff's termination, then Werner would have kept
part of or all the wages withheld.  The fortuity that the
condition of the truck and equipment met Werner's approval --
and, thus, that plaintiff eventually received the wages -- does
not make Werner's conduct lawful.  Nothing in ORS 652.610
suggests that the legislature intended to permit employers to
withhold, temporarily, wages that they cannot withhold
permanently.

	Finally, Werner contends that the amounts held as the
personal bond were not "wages" under ORS 652.140(2):  "[T]he fact
that [p]laintiff paid for the bond from his wages does not make
the bond itself 'wages.'"  That assertion is not well taken.  The
money that Werner withheld did not lose its character as wages
merely because it was held in a fund that Werner chose to call a
"personal bond."  To hold otherwise would allow employers to
evade the wage claim laws by the simple expedient of calling
wages by a different name.  ORS 652.610 prohibited Werner from
withholding plaintiff's wages in the first place.  ORS 652.140(2)
required Werner to pay those wages immediately when plaintiff
ended his employment.  The trial court erred in holding
otherwise.

	In sum, we hold that Werner was plaintiff's employer
and, therefore, was subject to the requirements of ORS 652.150
and ORS 652.610.  Werner improperly withheld $500.80 in wages and
$400 as a "bond" from plaintiff's final paycheck, and the trial
court erred in concluding that the withholding was for
plaintiff's benefit.  Accordingly, plaintiff is entitled to
recover under ORS 652.150 and 652.610(3)(c), together with
penalties and attorney fees.  

	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. 	Plaintiff also moved to amend his complaint to add DMI
as a defendant.  The trial court denied the latter motion, and
plaintiff did not assign the denial as error on appeal.

2. 	Werner does not contest personal jurisdiction in
Oregon.

3. 	Werner does not argue that the Commissioner of the
Bureau of Labor and Industries approved the agreements at issue
in this case.

4. 	Although ORS 652.150 has undergone minor amendments in
the interval between the cases cited herein and this case,
including the change in spelling of the word "willfully," the
relevant statutory text has remained unchanged.