Opinion ID: 2807507
Heading Depth: 1
Heading Rank: 6

Heading: Application of the WRA

Text: In the absence of a specific statutory definition, words in a statute are given their common law or ordinary meaning. State v. Chester, 133 Wn.2d 15, 22, 940 P.2d 1374 (1997). In determining whether the health insurance premiums paid by the county constitute wages under the WRA, we look to our recent decision in LaCoursiere, in which we held that wages encompass both payment for work performed and 'moneys due by reason of employment.' LaCoursiere, 181 Wn.2d at 741-43 (internal quotation marks omitted) (quoting Flower, 127 Wn. App. at 34). Liberally construing the WRA, 5 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting) we construed wages using Websters' broad definition of wage to include not only salaries but also bonuses, once paid for work performed. /d. at 741. Applying the same reasoning to health care premiums, we have also explicitly held that health care premiums are wages under Washington's Industrial Insurance Act, Title 51 RCW. See RCW 51.08.178; Cockle v. Oep'tofLabor& Indus., 142 Wn.2d 801, 823, 16 P.3d 583 (2001) (recognizing that health care coverage is frequently a significant part of an employee's compensation package and should be considered a wage). Our decision in Cockle comports with the dictionary definition of wage, which includes amounts paid by the employer for insurance. WEBSTER's THIRD NEW INTERNATIONAL DICTIONARY 2568-69 (2002). Therefore, I would hold that health care premiums are wages under the WRA. The record is clear that the health insurance premiums at issue here were wages because they were paid for work performed. The deputies' wages were established in the 2008-2009 CBA. The terms of that CBA required the County to pay the entirety of the deputies' health insurance premiums and 90 percent of the deputies' dependents' premiums. After the CBA expired, the County was required to maintain the same level of existing wages, hours, and other conditions of employment under the provisions of the Public Employees' Collective Bargaining Act (PECBA), chapter 41.56 RCW. RCW 41.56.470. The deputies worked with the reasonable expectation that the County would continue to pay their salaries and health insurance premiums at the statutorily prescribed level; indeed, for three years this is exactly what happened. 6 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting)
Having concluded that health insurance premiums are wages, we now consider whether the decrease in the deputies' wages for the payment of retroactive health care premiums constitutes a rebate. [A] 'rebate' occurs when an employer or its agent collects or receives a portion of an employee's wage after the wage has been paid. LaCoursiere, 181 Wn.2d at 744 (emphasis added) (citing RCW 49.52.050(1 )). Employees have [t]he right to a salary for work performed at the rate admittedly effective during the period when the work was performed. Foley v. Carter, 526 F. Supp. 977,985 (D.D.C. 1981); Navletv. Port of Seattle, 164 Wn.2d 818,828 n.5, 194 P.3d 221 (2008) (In the employment context, an employee who renders service in exchange for compensation has a vested right to receive such compensation. (citing Leonard v. City of Seattle, 81 Wn.2d 479, 487, 503 P.2d 741 (1972))). In analyzing whether there was a rebate, we must first determine the effective rate of pay during the period when the work was performed. PECBA, chapter 41.56 RCW, governs collective bargaining negotiations for public employees. Specifically, as uniformed personnel, 2 the deputies' wages during the interim period are defined as the existing wages, hours, and other conditions of employment, which were defined by the expired CBA. RCW 41.56.470. Therefore, the expired CBA became the deputies' effective rate of pay. The plain language of PECBA supports this conclusion: 2Uniformed personnel includes [l]aw enforcement officers as defined in RCW 41.26.030. RCW 41.56.030(13)(a). RCW 41.26.030(18) defines a law enforcement officer as any person who is commissioned and employed by an employer on a full time, fully compensated basis to enforce the criminal laws of the state of Washington. This definition applies to the deputies. 7 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting) During the pendency of the proceedings before the arbitration panel, existing wages, hours, and other conditions of employment shall not be changed by action of either party without the consent of the other but a party may so consent without prejudice to his or her rights or position under chapter 131, Laws of 1973. RCW 41.56.470. The language of RCW 41.56.470 is mandatory; the imperative shall does not permit either party to change the existing wages, hours, or conditions of employment without the consent of the other. The intent and purpose of PECBA support the premise that RCW 41.56.470 controls the effective rate of wages for work performed: The intent and purpose of [PECBA] is to recognize that there exists a public policy in the state of Washington against strikes by uniformed personnel as a means of settling their labor disputes; that the uninterrupted and dedicated service of these classes of employees is vital to the welfare and public safety of the state of Washington; that to promote such dedicated and uninterrupted public service there should exist an effective and adequate alternative means of settling disputes. RCW 41.56.430. The PECBAadvances a balance between uniformed employees and employers. So long as the deputies remain employees, the deputies are required to continue working the same hours under the same conditions of employment. Under PECBA, a uniformed employee's right to strike, or engage in a work slowdown or stoppage, is rescinded, but in return PECBA guarantees that existing wages will continue until a dispute is resolved. RCW 41.56.490. The quid pro quo for the deputies' dedicated and uninterrupted public service is that the County continues to pay the deputies existing wages. As discussed, the deputies' existing wages included health insurance payments. Even the lead opinion appears to acknowledge that RCW 41.56.470 8 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting) required the County to maintain the same level of pay and benefits provided under the 2008-2009 CBA. Lead opinion at 3 (emphasis added). We should hold that RCW 41.56.470 governs our analysis of the deputies' effective wages during the interim period because the arbitration proceedings were pending and the statute explicitly prohibits either party from changing the existing wages and conditions of employment. Because the compensation the County paid the deputies during the interim period is statutorily defined, [t]he promised compensation for services actually performed and accepted ... may undoubtedly be claimed. Butter v. Pennsylvania, 51 U.S. (1 0 How.) 402, 416, 13 L. Ed. 472 (1850). The deputies had the right to the wages they received. We conclude that deputies' health insurance premiums are wages and that the deputies received no more than their due. By allowing the County to rebate these wages, the arbitration award violates the WRA.
The WRA authorizes an employer to withhold wages if empowered by state or federal law, such as in the case of an overpayment of wages; however, no exception to the WRA applies here. RCW 49.52.060 authorizes an employer to withhold a portion of an employee's wages when authorized by state or federal law. RCW 49.48.200(1) authorizes the state, a county, or a city to withhold an overpayment of wages from a public employee's current wages as provided in RCW 49.48.210 ....  RCW 49.48.21 0(11 )(c) defines an overpayment as a payment of wages for a pay period that is greater than the amount earned for a pay period. The wages paid to deputies were not in any sense greater than the amount earned because they were 9 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting) exactly the wages due, i.e., exactly what the law provided they had earned. The 3 deputies were not, as the lead opinion contends, overpaid. Ill. Because the arbitration award violated the WRA, it is arbitrary and capricious We should uphold the trial court's finding that the arbitration award was arbitrary and capricious. PECBA governs our review of the arbitration panel's decision. Under PECBA, the statutorily mandated interest arbitration panel exercises a state function and is ... a state agency. RCW 41.56.452. We do not give the panel any 'great deference' [b]ecause there is no guaranty that any member of the arbitration panel will have any expertise in labor relations. City of Bellevue v. lnt'/ Ass'n of Fire Fighters, Local 1604, 119 Wn.2d 373, 381, 831 P.2d 738 (1992). Instead, the superior court reviews the decision of the panel to determine whether its decision was arbitrary or capricious. 4 RCW 41.56.450. 3 In concluding that the deputies were overpaid, the lead opinion fundamentally misconstrues the distinction between statutorily mandated arbitration and binding arbitration arising as the result of a contract voluntarily entered into by parties. See lead opinion at 18 n.4 (Viewing the arbitration award as an extension of collective bargaining, as we must, it becomes clear that the arbitration award acts as a contract that the parties would have reached themselves.). It is true that we treat arbitrator decisions arising out of contract as part of the contract itself. Kitsap County Deputy Sheriff's Guild v. Kitsap County, 167 Wn.2d 428, 435, 219 P.3d 675 (2009). The award is then treated like any other contract and can be vacated if it violates public policy. /d. However, [u]nlike grievance arbitration, interest arbitration is not a matter of contract. Snohomish County Pub. Transp. Benefit Area v. Public Emp't Relations Comm'n, 173 Wn. App. 504, 510, 294 P.3d 803 (2013) (citing RCW 41.56.450). We review statutorily mandated arbitration that the parties have not bargained for in accordance with the requirements of that statute. Under interest arbitration, we do not treat a panel's award as part of a contract that the parties entered into because the statute mandating the arbitration requires us to determine whether the panel's decision is arbitrary or capricious before the award is considered final and binding. If the panel's decision is arbitrary or capricious then the award is not binding on the parties. RCW 41.56.450. 4The application of the arbitrary and capricious standard of review is unique in arbitration under PECBA, and it is significantly different from arbitration created through contract. 10 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting) We have defined arbitrary and capricious behavior as willful, unreasoning, and taken without regard to the attending facts or circumstances. Ass'n of Wash. Spirits & Wine Distribs. v. Wash. State Liquor Control Bd., 182 Wn.2d 342, 358, 340 P.3d 849 (2015). The attending facts or circumstances require the panel to consider [t]he constitutional and statutory authority of the employer when making its determination. RCW 41.56.465(1)(a). If the panel issues an award that exceeds the statutory authority of the employer, then that award is arbitrary and capricious. I would hold that the arbitration award violates the WRA because under the award the employer receives a rebate of wages earned by the employee. Thus the award by definition was arbitrary and capricious because it failed to consider the prohibitions against an employer's receiving a rebate as set forth in the WRA. I agree with the trial court's determination that the award incorporates unlawful provisions beyond the lawful authority of the employer and is arbitrary and capricious for that reason. 5 Clerk's Papers at 436. Arbitration awards under the Washington uniform arbitration act are not reviewed to determine if they are arbitrary or capricious, see RCW 7.04A.200, .220, .230, .240, and we have expressly declined to review arbitration arising under contract under an arbitrary and capricious standard because of the importance of supporting the finality of bargained for, binding arbitration. Clark County Pub. Uti/. Oist. No. 1 v. tnt'/ Bhd. of Elec. Workers, Local 125, 150 Wn.2d 237, 247, 76 P.3d 248 (2003) (When parties voluntarily submit to binding arbitration, they generally believe that they are trading their right to appeal an arbitration award for a relatively speedy and inexpensive resolution to their dispute.). The application of this more searching review makes sense when we remember that despite the use of the term arbitration, the panel created by RCW 41.56.450 is in fact a state agency adjudicating a dispute pursuant to a statutory, rather than a contractual, delegation of authority. See RCW 41.56.452. 5 The trial court also found that the award improperly contains mutually exclusive terms concerning insurance enrollment and is arbitrary and capricious for that reason. I would not reach that issue. 11 Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Wiggins, J., dissenting)