Court Opinion

ID: 9796360
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:56:12.636557+00
Date Added: 2024-06-11T08:50:10.233738
License: Public Domain

Chief Justice MULLARKEY,
dissenting:
I respectfully dissent because the majority disregards the plain and unambiguous language of the Colorado Wage Claim Act. § 8-4-101 et seq., 3 C.R.S. (2002). Both on its face and under scrutiny, the Wage Claim Act holds all officers of a corporation personally *334liable for an employee’s earned and unpaid wages, regardless of whether the corporation has filed for bankruptcy. Therefore, in response to the questions certified to us from the Tenth Circuit Court of Appeals, I would answer that (1) yes, officers of a now-bankrupt corporation are individually liable for the wages of the corporation’s former employees, and (2) yes, all officers are individually liable due to mere status as officers.
The majority opinion absolves all corporate officers of all liability and accountability, defeating the legislature’s intent in two separate steps. First, the majority gives no meaning to the plain language “and any agent or officer thereof,” words that the General Assembly explicitly added to Colorado’s Wage Claim Act in 1959. Second, the majority uses a statutory construction analysis as an opportunity to re-write the Act’s language, dismiss the Act’s history, and obscure the legislature’s intent with irrelevant state law. In doing so, the majority relieves corporate officers of liability precisely at a time in our nation’s history when we should be giving full effect to statutes that explicitly encourage corporate responsibility.
I. The Plain Language of the Act Holds Corporate Officers Personally Liable for Unpaid Wages.
When a corporation fires an employee and then does not pay the employee his or her previously earned wages, the Wage Claim Act imposes personal liability upon the officers of the corporation for those wages. A plain reading of the Act’s provisions confirms this conclusion:
First, the Wage Claim Act provides that “[w]hen an interruption in the employer-employee relationship by volition of the employer occurs, the wages or compensation for labor or service earned and unpaid at the time of such discharge is due and payable immediately.” § 8-4-104(l)(a), 3 C.R.S. (2002). Second, the Act provides that if the employer refuses to pay such wages without a good faith legal justification, the employer is liable, “in addition to the compensation legally proven to be due, as a penalty for such refusal the greater of an amount equal to fifty percent thereof or an amount equal to the amount of the wages payable per day to such employee not to exceed ten days.” § 8-4-104(3), 3 C.R.S. (2002). Third and most importantly, the Act defines an “employer” as “every person, firm, partnership, association, corporation, migratory field labor contractor or crew leader, receiver, or other officer of court in Colorado, and any agent or officer thereof, of the above mentioned classes, employing any person in Colorado....” § 8-4-101(6), 3 C.R.S. (2002) (emphasis added).
Read together, the above three provisions unambiguously declare that corporations, “and any agent or officer thereof,” are liable for an employee’s earned but unpaid wages when the employee is terminated by volition of the employer. No other reasonable conclusion can be drawn from the plain language of the Wage Claim Act. The explicit inclusion of officers in the statutory definition of “employer” clearly holds a corporate officer personally liable for earned and unpaid wages. See Cusimano v. Metro Auto, Inc., 860 P.2d 532, 534 (Colo.App.1992); accord Leonard v. McMorris, 106 F.Supp.2d 1098, 1108-09 (D.Colo.2000). The majority disagrees that the General Assembly intended for officers to act as sureties for unpaid wages when it added officers to the language of the Act, maj. op. at 331, but without such intent, there would have been no purpose whatsoever for the General Assembly to specifically super-cede the conventional meaning of “employer” with the more expansive statutory definition of “employer” encompassing officers. The only viable reason for adding officers to the definition of liable employers would be to hold officers personally liable for wages the corporate entity fails to pay.
Several other states have similar statutes requiring the prompt payment of employees’ wages when earned, and some of these statutes, like Colorado’s Wage Claim Act, impose personal liability on corporate officers. Although decisions interpreting such comparable statutes vary as to the type of officer covered or the effect of a corporate bankruptcy on an officer’s liability, none — absolutely none — absolves corporate officers of all liability as the majority does here.
*335In South Carolina, for example, an employer” is liable for unpaid wages under the Payment of Wages Act and an “employer” is defined to include “any agent and officer.” S.C.Code Ann. § 41-10-10(1) (Law.Coop.2002). By virtue of this definition, South Carolina courts have held that the legislature intended to impose individual liability on agents or officers who knowingly permit their corporation to violate the Act. See Dumas v. InfoSafe Corp., 320 S.C. 188, 463 S.E.2d 641, 645 (S.C.Ct.App.1995).
Likewise, in Pennsylvania, the language “any agent or officer” is included in the definition of “employer” in the Wage Payment and Collection Law (“WPCL”). 43 Pa. Cons.Stat. § 260.2a (2002). Again, by virtue of this statutory definition of “employer,” Pennsylvania courts have imposed personal liability on officers involved in the policy-making decisions of the corporation. See, e.g., Mohney v. McClure, 390 Pa.Super. 338, 568 A.2d 682, 685-86 (1990); Amalgamated Cotton Garment and Allied Indus. Fund v. Dion, 341 Pa.Super. 12, 491 A.2d 123, 125 (1985) (“It is undeniable that the definition of ‘employer’ encompasses an officer of the corporation, thus, we construe the WPCL to impose liability here on the officer of a delinquent corporation”).
The Third Circuit subsequently carved out a Chapter 11 bankruptcy exception to the WPCL in Belcufine v. Aloe, 112 F.3d 633 (3d Cir.1997), but relied on the fact that because the specific purpose of Pennsylvania’s WPCL is “to deter managers from strategically diverting company resources away from the payment of wages,” the WPCL should apply “in only those contexts in which managers have room to behave strategically.” Id.1 In Colorado, no bankruptcy exception can be found in the plain language of the Wage Claim Act and the purpose of Colorado’s statute is not as constrained as Pennsylvania’s. Colorado’s Wage Claim Act does not distinguish between officers according to their managerial powers, therefore the statute does not seek to target only higher managers. The Belcufine analysis therefore would not apply to Colorado’s Wage Claim Act.
In sharp contrast to the above conclusions that the words “agent” and “officer” indicate some form of agent and officer liability for unpaid wages, today’s majority concludes that corporate officers are absolved of any and all liability for such wages. This conclusion gives no meaning to the words “and any agent or officer thereof” under Colorado’s Wage Claim Act. The majority does not explain why these specific words are a part of Colorado’s statute or why other states with identical statutory definitions of “employer” have held officers personally liable for due wages. Rather, the majority skirts the issue and diverts our attention to Illinois and Kansas, where wage statutes are structured and worded very differently. See maj. op. at 327. Unlike the South Carolina and Pennsylvania statutes, the Illinois and Kansas statutes shed no light on how a court should interpret the words “and any agent or officer thereof” in the definition of “employer” under Colorado’s Wage Claim Act.
The majority avoids a straightforward analysis of the plain language of Colorado’s statute because such an analysis can lead to only one conclusion: if an “employer” is liable for unpaid wages and the statutory definition of “employer” includes “officers,” basic logic dictates that officers are liable for unpaid wages.
Because this logic leads to a result at odds with the majority’s policy preferences, the majority declares the Act “ambiguous” and muddies the clarity of an Act we have described as a “clear, comprehensive statutory scheme.” Lambdin v. Dist. Ct., 903 P.2d 1126, 1129 (Colo.1995). By doing so, the majority is able to invoke our rules of statutory construction and search for a more palatable interpretation of the General Assembly’s intent. See, e.g., Gorman v. Tucker, 961 P.2d 1126, 1128 (Colo.1998) (a court need not look to rules of statutory construction if *336the language of the statute is clear). Deeper scrutiny of the Act actually confirms, however, that the General Assembly intended to hold all officers of a corporation personally liable for an employee’s earned and unpaid wages when it added the words “and any agent or officer thereof’ to the Act.
II. Under Rules of Statutory Construction, the Act Holds Corporate Officers Personally Liable for Unpaid Wages
In the majority’s lengthy discussion of legislative intent, the majority professes to examine the language, design, meaning, purpose, and construct of the Wage Claim Act. See maj. op. at 328. Instead, the majority does no more than (1) re-write the Act’s language; (2) dismiss the Act’s history, both legislative and otherwise; (3) analyze irrelevant state statutes; and (4) provide an irrelevant summary of traditional corporate law principles. In other words, the majority disregards the General Assembly’s unmistakable intent to hold corporate officers accountable for unpaid wages.
First, the majority re-writes the Act’s language by constructing an artificial “employing entity” analysis. See id. at 328-330, 333. The majority contends that the Act limits liability to an “employer” re-defined as “the entity or person who created and maintained the employment relationship for payment of the wages and compensation due and payable under the employment contract.” Id. at 328. This mysterious new definition has no basis whatsoever in the statute and was not argued by the parties. This definition substitutes the term “employing entity” for all of the separate statutory “employers” explicitly listed in section 8-4-101(6) of the Wage Claim Act, and in doing so the majority conveniently erases the words “corporation[s] ... and any agent or officer thereof” from the language of the Act. § 8-4-101(6). Only by changing the Act’s language to its own is the majority able to proclaim that it cannot find any statutory language holding corporate officers and agents individually liable for unpaid wages. See maj. op. at 327, 329.
The majority then attempts to bolster its “employing entity” analysis by focusing on the statute’s references to the words “wages” and “accounting unit,” arguing that such references imply that the General Assembly intended to target only the entity that literally hired and paid the employee. See id. at 329. This argument disregards the available legislative history of the Wage Claim Act. The definition of “wages” in section 8-4-101(9) has no relevance to the clear and separate definition of “employer” in section 841-101(6), and the majority can cite no legal authority stating otherwise. As for the Act’s reference to the “accounting unit” mentioned in section 8-4-104(l)(a), legislative history tapes clearly reveal that the General Assembly added the “accounting unit” clause for the sole purpose of giving employers slightly more time to pay the terminated employee. Hearing on H.B. 1281 Before the House, 1986 Leg., 55th Sess. (Colo.1986).2 Thus, the Act’s references to “wages” and “accounting unit” do not in any way support the majority’s argument that the General Assembly did not intend to extend personal civil liability to officers.
Moreover, the majority disregards the historical background of the Wage Claim Act as it searches for legislative intent. The historical context of the Act reinforces the conclusion that when the General Assembly specifically added the words “and any officer or agent thereof” to the Act in 1959, it intended to extend personal liability to corporate officers. In its 100 year history, the general purpose of the Wage Claim Act has been to assure the timely payment of an employee’s earned wages and to provide adequate relief when those wages are not paid. See, e.g., Lambdin, 903 P.2d at 1129; Cusimano, 860 P.2d at 534. This purpose of the Act has *337remained constant since its inception. The scope of its application, however, has widened substantially over time.
When the Act originally was enacted in 1901, it was targeted only at “corporations hereafter organized for pecuniary profit, except railroad companies.” Ch. 55, see. 8, 1901 Colo. Sess. Laws 128, 130. The Act came during a time when the General Assembly was enacting labor legislation in order to combat employer fraud and oppression, which had led to strikes and violent disputes during the late 1800s. See Jet Courier Serv., Inc. v. Mulei, 771 P.2d 486, 503 (Colo.1989) (Mullarkey, J. concurring) (citing In re House Bill No. H7, 23 Colo. 504, 507, 48 P. 512, 513 (1897)). In 1919, the General Assembly broadened the Wage Claim Act to eliminate the railroad exemption and to apply the Act to “all private or quasi-public corporations” organized for pecuniary profit. Ch. 167, sec. 6, § 6988, 1919 Colo. Sess. Laws 617, 619.
Then, in 1959, the General Assembly significantly changed the Act to what is essentially its current form, expanding the Act’s application even further to include any “employer,” defined in its entirety as:
every person, firm, partnership, association, corporation, receiver, or other officer of court in Colorado, and any agent or officer thereof, of the above mentioned classes, employing any person in Colorado, provided, however, that the provisions of this act shall not apply to counties, cities and counties, municipal corporations, quasi municipal corporations, school districts, and irrigation, reservoir, drainage conservation company or district organized and existing under the laws of Colorado.
Ch. 167, sec. 2, § 80-25-1 et seq., 1959 Colo. Sess. Laws 537.3 This new definition expressed the 1959 General Assembly’s dissatisfaction with previous versions of the Act, which held only corporate entities liable for unpaid wages.
It is worth noting here that in 1959, both houses of the General Assembly consisted of a majority of legislators who were elected on a pro-labor platform. See Harold V. Knight, Working in Colorado: A Brief History of the Colorado Labor Movement 163-64 (1971).4 Organized labor therefore had great hopes that the General Assembly would enact its legislative program during the 1959 session. Id. Although not all these hopes were realized, the amendment to the Wage Claim Act that we are construing today .was one of labor’s victories that year.
With remarkable attention to detail, the 1959 General Assembly materially and intentionally broadened the application of the Wage Claim Act to a wide variety of statutory “employers” wholly separate and distinct from the traditional corporate entity. Agents and officers are among those liable as statutory “employers,” and the General Assembly has not changed its position in the forty-four years since the 1959 definition went into effect. Most notably, the General Assembly made no changes to the Act after the 1992 Cusimano case, where the Colorado Court of Appeals interpreted the plain language of the Wage Claim Act to hold corporate officers personally liable for unpaid wages. 860 P.2d 532.
The majority’s refusal to explain, let alone give any real meaning to, the 1959 addition of the words “and any agent or officer thereof” raises concerns about whether the majority is willing to give appropriate weight to evidence of legislative intent contradicting its ultimate holding.
Rather than give any consideration to the illuminating historical background of the Wage Claim Act, the majority instead chooses to discuss irrelevant state statutes such as Colorado’s 1903 Wage Preference Act, §§ 8-10-101 to 103, 3 C.R.S. (2002), and the criminal provision of the Wage Claim Act, § 8^4-117, 3 C.R.S. (2002). See maj. op. at 331. *338The majority’s reliance on these two statutes is misguided. The Wage Preference Act has no direct relevance to this ease and the majority acknowledges this. Id. at 331. The Wage Preference Act applies only to business dissolution actions filed under state law, and here, NationsWay has filed a petition under Chapter 11 of the federal Bankruptcy Code. Accord Leonard, 106 F.Supp.2d at 1111-12. The Wage Preference Act is also irrelevant to this case because it does not address the liability of corporate officers at all — the Wage Preference Act focuses solely on the corporate entity.
Furthermore, the Wage Preference Act shows no indication of a legislative intent to limit an employee’s remedies when seeking unpaid wages under the Wage Claim Act. The majority fails to recognize that the “intent” it extracts from the 1903 Wage Preference Act cannot be reconciled with the General Assembly’s 1959 amendments to the Wage Claim Act. When the General Assembly originally enacted the Wage Preference Act back in 1903, it gave employees preferred creditor status because officers and agents were not yet liable for wages under the Wage Claim Act. Ch. 70, sec. 1, 1903 Colo. Sess. Laws 143. As discussed above, it was not until 1959 that the words “and any agent and officer thereof” were added to the section 8-4-101(6) definition of liable “employers.” Ch. 167, sec. 2, 1959 Colo. Sess. Laws 537. Thus, in 1903, the General Assembly could not have intended to choose a “preferred status” remedy over a “personal officer liability” remedy, because the latter did not exist under the Wage Claim Act at the time. For the majority to imply otherwise, see maj. op. at 331, is misleading.
Moreover, the majority erroneously implies that section 8-4-117 of the Wage Claim Act alters or otherwise affects the general provisions of the Wage Claim Act. Id. at 331-333. Section 8-4-117 is an independent criminal provision that is irrelevant to this case. The majority ignores the statutory mandate which limits section 8-4-117 only to extraordinary circumstances warranting the imposition of criminal penalties. Section 8-4-117 provides:
In addition to any other penalty imposed by this article, any employer or agent of an employer who, being able to pay wages or compensation and being under a duty to pay, willfully refuses to pay ... is guilty of a misdemeanor.... For purposes of this section, “being able to pay wages or compensation” does not include an employer who is unable to pay wages or compensation by reason of a chapter 7 bankruptcy action or other court action which results in the employer having limited control over his assets.
Id. (emphasis added).5
As is obvious from the wording of the statute, the sole purpose of section 8 — 4-117 is to impose additional criminal penalties on an employer who willfully refuses to pay wages, as opposed to a statutory employer who simply fails to pay wages. Again, these criminal penalties are in addition to, not in replacement of, the personal civil liability imposed through section 8-4-104(l)(a), section 8 — 4-104(3), and the definition of liable “employers” in section 8-4-101(6). As for the criminal provision’s separate definition of employers who are “able to pay wages or compensation,” the clause is expressly limited to “this section” of the Wage Claim Act and has no impact on the definition of “employer” under section 8-4-101(6). In short, section 8 — 4-117 addresses additional criminal sanctions only and has no bearing on this civil action.
The majority obscures the pivotal issue in this case — the statutory meaning of “employer” — not only with irrelevant state statutes, but also with an irrelevant summary of traditional corporate and agency law principles. See maj. op. at 330-331.
This case does not turn on traditional or common-law corporate and agency law principles. This case turns on the statutory language of the Wage Claim Act and its definition of “employer.” Our duty here is to effectuate the intent of the General Assem-
*339bly, see Martin v. People, 27 P.3d 846, 851 (Colo.2001), not to impose our own policy-preferences in a cloud of irrelevant treatises and case law. See maj. op. at 330-331. Thus, this court’s focus must be on the statutory meaning of “employer” as stated by the General Assembly rather than on the conventional meaning of “employer.”
Statutes regularly amend traditional legal principles, and the majority refuses to recognize that this is precisely what has happened here. The plain language of the Wage Claim Act clearly overrides traditional personal liability protection, extending wage liability beyond the corporate entity to include “any agent or officer thereof.” § 8-4-101(6). These words in the Wage Claim Act pierce the corporate veil. By explicitly superceding a corporate officer’s traditional protections from personal liability, the Wage Claim Act provides “an incentive for corporate officers to ensure that their corporation will pay wages earned.” See Cusimano, 860 P.2d at 534. This incentive recognizes that although the corporation is a distinct entity, corporate entities are run by real people, namely the officers, who make real decisions affecting wage payments.
Thus, the General Assembly intended the Wage Claim Act to hold corporate officers personally liable for not protecting workers’ wages. Yes, the amount of liability can be substantial. But, as the Federal District Court best articulated, “courts are not in the business of rewriting duly enacted state legislation merely because it creates ‘staggering personal liability.’ ” Leonard, 106 F.Supp.2d at 1110. Personal liability may not normally be anticipated by corporate officers, see maj. op. at 334, but when the issue is the payment of earned wages, the plain language of the Wage Claim Act gives officers clear and ample notice of their potential liabilities. If the General Assembly disagrees, it is free to amend the Act as it sees fit.
Given the plain language and historical background of the Wage Claim Act, the General Assembly fully intended to extend personal liability to corporate agents and officers for the unpaid wages of employees, regardless of whether the corporation has filed for bankruptcy. Unfortunately, the majority ignores the legislature’s intent and the result of today’s decision is the same as it would have been under the 1901 version of the Wage Claim Act — the corporate entity alone is liable for unpaid wages, and, when the corporation cannot or will not pay these wages, workers have no meaningful recourse.
For the foregoing reasons, I respectfully dissent.
I am authorized to say that Justice MARTINEZ and Justice BENDER join in this dissent.

. The Pennsylvania state courts have not yet ruled on this bankruptcy exception issue, and, in Belcufine, Judge Greenberg vigorously dissented because "there is nothing in the WPCL itself or in the case law to support a conclusion that an agent or officer can be liable only if he or she diverts funds that should have been applied to obligations due under the WPCL.” Id. at 644 (Greenberg, J. concurring and dissenting).

. Whereas previous versions of section 8-4-104(l)(a) required all payments to be made “immediately,” the 1986 amendment added the following language:
If at such time the employer’s accounting unit, responsible for the drawing of payroll checks, is not regularly scheduled to be operational, then the wages due the separated employee shall be made available to the employee ... no later than six hours after said unit would normally be operational.
Ch. 65, sec. 2, 1986 Colo. Sess. Laws 504, 505.

. The Act’s current definition is even broader than the 1959 version — it now includes a "migratory field labor contractor or crew leader” as an additional "employer” subject to the Act. § 8-4-101(6), 3 C.R.S. (2002). Certainly these additions show the legislature’s continued determination to hold individuals directly liable to employees for unpaid wages.

. Colorado’s governor and lieutenant governor had also been elected on a pro-labor platform. See id.

. Legislative history tapes reveal that the specific purpose of adding "agents” to this particular criminal provision was to further deter employers from willfully "passing the buck” to payroll clerks as an excuse to delay payment. Hearing on H.B. 1231 Before the House, 1986 Leg., 55th Sess. (Colo.1986); see Ch. 65, sec. 2, 1986 Colo. Sess. Laws 504, 506-07.