Supreme Court of the State of Washington

                            Opinion Information Sheet

Docket Number:       67019-6
Title of Case:       Dan Drinkwitz, Kenneth Caproni
                     v.
                     Alliant Techsystems Inc
File Date:           04/06/2000
Oral Argument Date:  03/07/2000
                     03/23/1999


                                SOURCE OF APPEAL
                                ----------------
Appeal from Superior Court of Snohomish County
Docket No:      96-2-01677-1
Judgment or order under review
Date filed:     06/17/1998
Judge signing:  Hon. Joseph Thibodeau


                                    JUSTICES
                                    --------
Authored by Faith E Ireland
Concurring: Richard P. Guy
            Barbara A. Madsen
            Philip A. Talmadge
            Bobbe J. Bridge
Dissenting: Richard B. Sanders
            Charles W. Johnson
            Gerry L. Alexander
            Charles Z. Smith


                                COUNSEL OF RECORD
                                -----------------
Counsel for Petitioner(s)
            William K. Rasmussen
            2600 Century Square
            1501 4th Avenue
            Seattle, WA  98101-1688

            Thomas B. Hatch
            Robins Kaplan Miller & Ciresi L.L.P.
            2800 Lasalle Plaza
            800 Lasalle Ave South
            Minneapolis, MN  55402-2015

Counsel for Respondent(s)
            Scott J. McKay
            Law Offices of Scott McKay
            8108 17th Ave SW
            Seattle, WA  98106

            Mark R. Busto
            Sebris Busto P.S.
            1500 Plaza Center
            10900 NE 8th Street
            Bellevue, WA  98004-4405

            Jeffrey A. James
            Sebris Busto P.S.
            1500 Plaza Center
            10900 NE 8th Street
            Bellevue, WA  98004-4405

Amicus Curiae on behalf of Association of Washington Business
            Bruce M. Cross
            Perkins Coie
            1201 3rd Ave Ste 4800
            Seattle, WA  98101-3099

            Kevin J. Hamilton
            40th Fl
            1201 3rd Ave
            Seattle, WA  98101-3099

Amicus Curiae on behalf of Department of Laborand Industries
            Martha P. Lantz
            Atny Gen Offc/Labor & Ind
            PO Box 40121
            Olympia, WA  98504-0121

Dissent by Sanders, J.

No. 67019-6
SANDERS, J. (dissenting)--The majority errs in its application of the
summary judgment standard to this case by basing its decision on inferences
favoring the party seeking summary judgment (the plaintiff employees,
Drinkwitz and Caproni) and by erroneously imposing a strict liability
standard.  Because this case is an appeal from an order of summary judgment
we must construe all facts and inferences in favor of the nonmoving party
(the defendant employer, Alliant), and because this statute is lifted from
federal law it should be given a consistent construction.
There remains a genuine question of fact as to whether the wage deductions
at issue in this case were intentional or, if not, whether Alliant is
entitled to the benefit of the window-of-correction exemption to
Washington's Minimum Wage Act, chapter 49.46 RCW (MWA).  As the majority
rejects the 'window of correction' and whereas I would adopt it, and as
this fact issue would preclude summary judgment in favor of the plaintiffs,
I dissent from a result which denies the defense its day in court.
The summary judgment standard is set out in CR 56:

The {summary} judgment sought shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law.

CR 56(c).  It is the moving party that bears the burden of meeting this
standard.  Hash v. Children's Orthopedic Hosp. & Med. Ctr., 110 Wn.2d 912,
915, 757 P.2d 507 (1988).  When applying this standard we are required to
view the evidence in the light most favorable to the nonmoving party, and,
if any inferences are to be made, we must also make those inferences in
favor of the nonmoving party.  White v. State, 131 Wn.2d 1, 9, 929 P.2d 396
(1997).  When reviewing a case on appeal from a summary judgment order, we
must be mindful that we are not charged with making factual findings, and
we must be particularly careful to give deference to the position of the
nonmoving party to avoid usurping the role of the fact finder.  It follows
that we must view the evidence and the inferences that can be drawn
therefrom in the light most favorable to Alliant (the nonmoving party), and
that we are not entitled to weigh the evidence.  Fleming v. Smith, 64 Wn.2d
181, 185, 390 P.2d 990 (1964); No Ka Oi Corp. v. National 60 Minute Tune,
Inc., 71 Wn. App. 844, 854 n.11, 863 P.2d 79 (1993) ('{I}t is axiomatic
that on a motion for summary judgment the trial court has no authority to
weigh evidence or testimonial credibility, nor may we do so on appeal.').
However the majority apparently does weigh the evidence to see if the
employer has carried its burden of proof.  Majority at 10-11 ('Although an
employer can assert its employees qualify under an exemption from this
general rule, the employer bears the burden of proving this 'exempt'
status. . . . With this standard in mind, we review seven of Alliant's
admitted policies and practices to determine whether the MWA's salary basis
test was met.').
The majority refuses to recognize that a window-of-correction exception
applies to the MWA.  Majority at 17-18.  The majority rejects both the
Sbroad view' of the window-of-correction adopted in Davis v. City of
Hollywood, 120 F.3d 1178 (1997), cert. denied,    U.S.   , 118 S. Ct. 1827,
140 L. Ed. 2d 963 (1998), and Arrington v. City of Macon, 973 F. Supp. 1467
(1997), as well as a narrower window-of-correction for merely inadvertent
deductions.  Majority at 17-18.  The majority exercises 'judicial
restraint' in refusing to recognize this federal exception in Washington
law, Majority at 18, principally because the federal case law on the window-
of-correction is 'convoluted and complicated,' Majority at 17.  However, we
should not confuse 'restraint' with abdication of our duty to protect the
legal rights of all concerned.
To substantiate the suspected convolutions and complications in federal
law, the majority references a split in authority in the federal circuits
as to whether the language in 29 C.F.R. sec. 541.118(a)(6), viz.,
where a deduction not permitted by these interpretations is inadvertent, or
is made for reasons other than lack of work, the exemption will not be
considered to have been lost if the employer reimburses the employee for
such deductions and promises to comply in the future{,}

should be read conjunctively or disjunctively.  The majority thinks that to
read this language disjunctively 'allows the exception to swallow the
rule,' which is 'illogical.'  Majority at 18.
However the plain language of 29 C.F.R. sec. 541.118(a)(6) ('or' as opposed
to 'and') supports the disjunctive reading, and the United States Supreme
Court, whose construction is authoritative over any split in the federal
circuits, interprets the language disjunctively.  Auer v. Robbins, 519 U.S.
452, 463, 117 S. Ct. 905, 137 L. Ed. 2d 79 (1997) ('{T}he plain language of
the regulation sets out 'inadverten{ce}' and 'made for reasons other than
lack of work' as alternative grounds permitting corrective action.'
(alteration in original)).  See also Paresi v. City of Portland, 182 F.3d
665, 668 (9th Cir. 1999) (citing cases).  I agree with the Supreme Court's
reading of the 'plain language of the regulation,' and as such I see the
window-of-correction as neither convoluted nor complicated, nor would I
refuse to recognize this same principle in Washington law.
The MWA was modeled after the federal Fair Labor Standards Act of 1938
(FLSA), 29 U.S.C. sec.sec. 201-219, Boykin v. Boeing Co., 128 F.3d 1279,
1282 (9th Cir. 1997).  Both state and federal statutes establish minimum
wages and require payment of overtime for covered employees.  RCW
49.46.020; RCW 49.46.130; 29 U.S.C. sec.sec. 206-07.  The 'professional'
exemption to the FLSA, and its accompanying regulations, is almost
identical to the equivalent MWA's exemption and regulations.  Compare 29
U.S.C. sec. 213(a)(1) (exempting 'any employee employed in a bona fide
executive, administrative, or professional capacity' as those terms are
defined in regulations by the department of labor) with RCW 49.46.010(5)(c)
(exempting '{a}ny individual employed in a bona fide executive,
administrative, or professional capacity' as those terms are defined in
regulations by the department of labor and industries); compare 29 C.F.R.
sec. 541.3(e) (defining a 'professional' employee for the purposes of 29
U.S.C. sec. 213(a)(1) as someone who is inter alia 'compensated for
services on a salary or fee basis') with WAC 296-128-530(5) (defining a
'professional' employee for the purposes of RCW 49.46.010(5)(c) as someone
who is inter alia 'compensated for his services on a salary or fee basis').
Thus the MWA is 'based upon' the FLSA, and therefore it is 'appropriate and
helpful to refer to the approach used by the federal courts' whose analysis
is 'helpful' and 'persuasive' even if not controlling on our
interpretation.  Chelan County Deputy Sheriffs' Ass'n v. Chelan County, 109
Wn.2d 282, 291, 745 P.2d 1 (1987) (When deciding whether on-call time is
compensable under the MWA 'it is appropriate and helpful to refer to the
approach used by federal courts in deciding if on-call time is compensable
working time under the federal Fair Labor Standards Act . . . .'); cf.
Xieng v. Peoples Nat'l Bank, 120 Wn.2d 512, 531, 844 P.2d 389 (1993) ('{I}n
the absence of adequate state authority, federal authority is persuasive in
interpreting {Washington's law against discrimination}.').  See also Tift
v. Professional Nursing Servs., Inc., 76 Wn. App. 577, 583, 886 P.2d 1158
(1995) ('{F}ederal cases and interpretations are deemed to be persuasive
but not controlling upon Washington courts.') and id. at 583 n.6 ('{W}hile
the Code of Federal Regulations can be helpful and persuasive, it is not
binding on us.').  It makes imminent sense to look to the substantially
more developed body of federal law for guidance.
That is probably why, given the dearth of Washington authority on this
issue, the majority turned to federal materials for its entire analysis--
the window-of-correction portion, Majority at 17-18, notwithstanding.  As
the majority notes, regulations adopted by the Department of Labor under
the FLSA have specifically defined the requirements of the 'salary basis'
test:
An employee will be considered to be paid 'on a salary basis' within the
meaning of the regulations if under his employment agreement he regularly
receives each pay period on a weekly, or less frequent basis, a
predetermined amount constituting all or part of his compensation, which
amount is not subject to reduction because of variations in the quality or
quantity of the work performed.  Subject to the exceptions provided below,
the employee must receive his full salary for any week in which he performs
any work without regard to the number of days or hours worked.

29 C.F.R. sec. 541.118(a) (emphasis added).  Although the majority relies
upon this regulation, it unfaithfully omits the italicized language
specifically referencing and incorporating the window-of-correction
exception.  See Majority at 8-9 (partially quoting 29 C.F.R. sec.
541.118(a)).  It is illogical to look to a federal regulation to establish
the test for determining whether an employee qualifies as an exempt
employee, but disregard the same regulation when determining whether an
inadvertent deduction entirely destroys the professional exempt status.
This regulation addresses the precise issue raised in this appeal:
{W}here a deduction not permitted by these interpretations is inadvertent,
or is made for reasons other than lack of work, the exemption will not be
considered to have been lost if the employer reimburses the employee for
such deductions and promises to comply in the future.

29 C.F.R. sec. 541.118(a)(6) (emphasis added).  The practical effect of the
majority's arbitrary strict liability standard is that a single mistaken
deduction by a payroll clerk destroys the employee's 'professional' status
under the MWA.  Not only is that approach inconsistent with the federal
regulation but it makes no sense:  There is more to being a 'professional'
under the statute than the complete absence of clerical error by a pay
clerk.
Significant differences between state statutes and federal statutes will
render federal case law inapplicable in interpreting the state statute, cf.
Martini v. Boeing Co., 137 Wn.2d 358, 372, 971 P.2d 45 (1999), but the
practical converse of that principle is nearly identical, and parallel
state and federal statutes should be construed in harmony, absent state
authority to the contrary.  Accordingly exceptions available under federal
law, such as the window-of-correction, should be available under our state
law, absent state authority to the contrary, of which there is none.

Thus, unlike the majority which takes a cafeteria approach to its use of
federal materials, I would look to the clear guidance of 29 C.F.R. sec.
541.118(a)(6) and recognize a window-of-correction exception to the MWA as
well.  Accordingly I would allow Alliant the opportunity to prove the
deductions were inadvertent, were corrected, and thus preserve the exempt
status of these professional employees.
Alliant's published policies clearly state salaried employees exempt from
the MWA should not generally have their pay reduced if they work less than
40 hours per week.  Clerk's Papers (CP) at 197 ('If time is to be taken off
without pay by an exempt employee, the time report showing less than 40
hours charged must have a letter attached from management approving the
deduction.  The time report and the letter must be sent together to
Payroll, otherwise, no deduction will be made.').  In contrast, the pay of
nonexempt (hourly) employees is automatically deducted for time reports
showing less than 40 hours.  CP at 201, 164, 241, 245.
The company's manager of human resources in Mukilteo stated in her
declaration that she was aware of the difference between exempt and
nonexempt employees but only became aware of deductions from exempt
employee salaries around October or November of 1995.  CP at 158.  After
learning of these deductions the manager promptly issued a memorandum to
all managers advising the deductions were improper.  CP at 158, 161.  The
manager then worked with Alliant's payroll manager to identify all
employees who may have had improper salary deductions and to calculate the
amount owed to each of them.  CP at 158-59.  As a result 54 employees were
identified and all were reimbursed.  CP at 165.  These affidavits and
Alliant's efforts to identify and reimburse all affected employees support
the inference, contrary to that of the majority, that these deductions were
inadvertent.
Because we are asked to review an order of summary judgment in favor of
Drinkwitz and Caproni, we must make all inferences in favor of Alliant.
Where the evidence is capable of supporting the inference that the
deductions were inadvertent, we must make that inference.  Of course that
inference has legal significance only if we recognize a window-of-
correction under the MWA, for which the majority would substitute strict
liability.  The more reasoned view would hold the summary judgment in favor
of Drinkwitz and Caproni cannot be sustained, and, in consequence, the
trial court's summary judgment order should be reversed with a remand for
further proceedings.