Gregory v. Forest River, Inc.

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 09-1256

DAVID GREGORY,

Plaintiff – Appellee,

v.

FOREST RIVER, INCORPORATED, a foreign corporation,

Defendant – Appellant.

Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg. John Preston Bailey,
Chief District Judge. (3:08-cv-00073-JPB-JES)

Argued: December 2, 2009 Decided: March 10, 2010

Before TRAXLER, Chief Judge, and SHEDD and DAVIS, Circuit
Judges.

Affirmed in part, reversed in part, and remanded by unpublished
opinion. Judge Shedd wrote the opinion, in which Chief Judge
Traxler joined. Judge Davis wrote a separate opinion concurring
in part and dissenting in part.

Rodney Lloyd Bean, STEPTOE & JOHNSON, LLP, Morgantown, West
Virginia, for Appellant. Robert J. Schiavoni, HAMMER, FERRETTI
& SCHIAVONI, Martinsburg, West Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
SHEDD, Circuit Judge:

David Gregory was employed by Forest River, Inc. (“FRI”) as

a commissioned salesperson from 2002 until July 2007, when he

was terminated. After his termination, he brought this action

alleging that FRI violated the West Virginia Wage Payment and

Collection Act (“WPCA”), W.Va. Code §§ 21-5-1 et seq., by

failing to pay him all commissions due in a timely manner. On

the parties’ cross motions for summary judgment, the district

court granted Gregory’s motion and denied FRI’s motion, and

awarded him damages in the amount of $105,095.13 (plus

prejudgment interest). FRI now appeals, arguing that the court

erred in concluding that the WPCA is applicable and,

alternatively, that it violated the WPCA. For the following

reasons, we affirm in part, reverse in part, and remand this

case for further proceedings consistent with this opinion.

I

Summary judgment is appropriate “if the pleadings, the

discovery and disclosure materials on file, and any affidavits

show that there is no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(c). The relevant inquiry in a summary

judgment analysis is “whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so

2
one-sided that one party must prevail as a matter of law.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

We review the district court’s order granting summary judgment

de novo. Jennings v. U.N.C., 482 F.3d 686, 694 (4th Cir. 2007)

(en banc). In doing so, we generally must view all facts and

draw all reasonable inferences in the light most favorable to

the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).

However, “facts must be viewed in the light most favorable to

the nonmoving party only if there is a ‘genuine’ dispute as to

those facts.” Id. at 380 (quoting Fed. R. Civ. P. 56(c)).

Although “an employer is free to set the terms and

conditions of employment and compensation,” Meadows v. Wal-Mart

Stores, Inc., 530 S.E.2d 676, 689 (W.Va. 1999), it “must pay

earned wages to its employees,” Britner v. Medical Security

Card, Inc., 489 S.E.2d 734, 737 (W.Va. 1997). Being “remedial

in nature,” the WPCA’s purpose “is to protect working people and

assist them in the collection of compensation wrongly withheld.”

Meadows, 530 S.E.2d at 686. Accordingly, it must be construed

“liberally so as to furnish and accomplish all the purposes

intended.” Id. at 688 (citation and internal quotation marks

omitted). Nonetheless, like other statutes, it must not be

construed so as to produce an absurd result. Legg v. Johnson,

Simmerman & Broughton, L.C., 576 S.E.2d 532, 538 (W.Va. 2002).

3
 The WPCA applies to (among others) corporations that are

“doing business” in West Virginia, which means “having employees

actively engaged in the intended principal activity of the . . .

corporation in West Virginia.” W.Va. Code § 21-5-1(n). It

“does not establish a particular rate of pay,” Robertson v.

Opequon Motors, Inc., 519 S.E.2d 843, 849 (W.Va. 1999); instead,

it “controls the manner in which employees in West Virginia are

paid wages,” and it imposes on employers “an obligation to pay

employees’ wages in a timely manner.” Gress v. Petersburg

Foods, LLC, 592 S.E.2d 811, 814 (W.Va. 2003). Pertinent to this

case, the WPCA requires a corporation to pay its discharged

employee’s wages (which includes commissions) in full within 72

hours, see W.Va. Code §§ 21-5-1(c), 21-5-4(b), and a corporation

that fails to adhere to this requirement “shall, in addition to

the amount which was unpaid when due, be liable to the employee

for three times that unpaid amount as liquidated damages,” W.Va.

Code § 21-5-4(e). 1 An employer cannot contravene any WPCA

provision by private agreement. See W.Va. Code § 21-5-10.

1
The Supreme Court of Appeals of West Virginia has stated
that the WPCA “has long confounded attorneys and courts alike.”
Meadows, 530 S.E.2d at 687. We note in this regard that the
phrase “doing business in this state” appears in § 21-5-3(a),
which generally requires wages to be paid every two weeks, but
it does not appear in § 21-5-4(b), which requires post-discharge
wages to be paid within 72 hours of the discharge. Despite the
omission of the phrase from § 21-5-4(b), we believe that the
section must be read as if the language is included therein;
(Continued)
4
 II

FRI, which is headquartered in Elkhart, Indiana,

manufactures and sells worldwide a variety of products,

including recreational vehicles, campers, cargo trailers,

commercial vehicles, boats, buses, and manufactured houses. In

1996, FRI established a “Commission Payment Policy” (“the CPP”)

which provides:

Commissions will be paid only on units that have been
invoiced for the current month.

Commissions will be paid no later than 30 days after
the close of the month.

Any units in the process of being credited and re-
billed will be paid in the month when the final
invoice is processed.

If a sales person leaves the employment of Forest
River, they will be paid 50% of any order that is
logged in and not yet invoiced. Forest River reserves
the right to hold this last check until the final unit
is invoiced to the original dealer. If for some
reason the order does not go to the original dealer,
then no commission will be paid on that order.

Also, Forest River will hold this last check to assure
that any prior commission-paid units are not returned.
If any units are returned, the original commission
paid will be deducted [from] this last check.

otherwise, the statute would lead to the absurd result that only
employers “doing business” in West Virginia must pay wages to
current employees on a biweekly basis but any employer must pay
wages within 72 hours of terminating an employee.

5
J.A. 116. FRI amended the CPP in 2005 by specifying: “[A]ll

commission will be paid on shipped units at the end of every

month. No longer will commission be paid on invoicing.” J.A.

118.

FRI hired Gregory as a fulltime salesperson in 2002. At

that time, he lived in Indiana, and his sales territory included

several eastern states (including West Virginia) and part of

Canada. With FRI’s approval, he moved to West Virginia in 2004

and continued to service the same sales territory, working out

of his home. Gregory was aware of and signed a copy of the

unmodified CPP during his employment.

In December 2006, FRI circulated a memorandum (“the pay-

date memo”) to its commissioned salespeople stating that the

company’s “goal” continued to be paying commissions on the third

Friday after month-end. FRI set forth the 2007 commission pay

schedule in this memorandum.

FRI terminated Gregory’s employment on July 13, 2007. At

that time, FRI was paying him commission calculated at 1.7% of

his sales. Pursuant to the pay-date memo, FRI paid Gregory his

June commission as scheduled on July 20, 2007. 2 Thereafter, FRI

paid Gregory commissions for the months of July-November (“the

2
Gregory was allowed to take a $1,000 weekly draw that was
offset by his commissions. On July 13 and 20, Gregory was paid
his weekly draw.

6
post-discharge commissions”) on the dates scheduled in the pay-

date memo; thus, FRI paid Gregory commissions on August 17 (July

commission), September 21 (August commission), October 19

(September commission), November 16 (October commission), and

December 21 (November commission). Pursuant to the CPP, FRI

reduced the post-discharge commissions by 50%.

In this lawsuit, Gregory does not appear to contest the

fact that he was aware of FRI’s policies or that he was paid all

commissions due him under the terms of FRI’s payment policies.

Rather, he contends that the policies themselves violate the

WPCA regarding the timing and amount. Ruling on the arguments

presented in the parties’ summary judgment motions, the district

court concluded that (1) the WPCA applies to Gregory’s discharge

and (2) notwithstanding its payment policies, FRI violated the

WPCA by failing to pay Gregory the full amount of his

commissions in a timely manner. Based on these rulings, the

court awarded Gregory damages in the amount of $105,095.13 (plus

prejudgment interest).

The court broke the damages total into two parts. The

first part consists of $30,137.13 in liquidated damages for

Gregory’s June commissions, which represents three times the

amount of his full June commissions. The second part consists

of $74,958 in unpaid commissions and liquidated damages for the

post-discharge commissions. As to this second group, the court

7
concluded that FRI was not entitled to reduce the post-discharge

commissions by 50% (as it had done pursuant to the CPP);

further, the court noted that although the post-discharge

commissions were arguably due within 72 hours of Gregory’s

discharge, they were due in any event (under FRI’s method of

calculation) within 72 hours of the end of each month during

July-November.

III

On appeal, FRI primarily argues that the district court

erred in applying the WPCA because it is not incorporated,

licensed, or headquartered in West Virginia, and it does not

transact business in the state. We disagree.

As noted, the WPCA applies to corporations that are “doing

business” in West Virginia, which means “having employees

actively engaged in the intended principal activity of the . . .

corporation in West Virginia.” W.Va. Code § 21-5-1(n).

Unquestionably, Gregory was actively engaged in FRI’s intended

principal activity (i.e., sales) in West Virginia. Between 2004

and 2007, he worked from his West Virginia home as an FRI

salesman, servicing West Virginia as well as other locations.

Therefore, FRI falls within the plain terms of the WPCA.

FRI urges us to limit the scope of § 21-5-1(n)’s “doing

business” language by reading it in pari materia with W.Va. Code

8
§ 31D-15-1501, which is part of the West Virginia Business

Corporation Act and which is titled “Authority to transact

business and jurisdiction over foreign corporations.” That

section provides that “[a] foreign corporation may not conduct

affairs in [West Virginia] until it obtains a certificate of

authority from the Secretary of State,” and it sets forth a non-

exclusive list of activities “that do not constitute conducting

affairs within the meaning” of the statute. W.Va. Code § 31D-

15-1501(a) and (b). It further sets forth a list of activities

for which a foreign corporation “is deemed to be transacting

business” in West Virginia, and it mandates that a foreign

corporation is deemed to agree that service of process on the

Secretary of State, in certain circumstances, “has the same

legal force and validity as process duly served on that

corporation in this state.” W.Va. Code § 31D-15-1501(d) and

(e).

Because we find that § 21-5-1(n) is plain and unambiguous,

there is no reason for us to look to § 31D-15-1501 or elsewhere

to attempt to ascertain its meaning. As the Supreme Court of

Appeals of West Virginia has explained:

The rule of in pari materia means that [s]tatutes
which relate to the same subject matter should be read
and applied together so that the Legislature’s
intention can be gathered from the whole of the
enactments. It must be remembered that the rule of in
pari materia is a rule of statutory construction and

9
 is only utilized where there is some ambiguity in a
particular statute. . . .

Furthermore, to say that because several statutes
relate to the same subject, they must always be read
in pari materia is an oversimplification of the rule.
First, it is apparent that what is meant by statutes
relating to the same subject matter is an inquiry that
is answered by how broadly one defines the phrase
“same subject matter.” Second, the application of the
rule of in pari materia may vary depending on how
integral the statutes are to each other. The rule is
most applicable to those statutes relating to the same
subject matter which are passed at the same time or
refer to each other or amend each other. A diminished
applicability may be found where statutes are self-
contained and have been enacted at different periods
of time. Finally, a related statute cannot be
utilized to create doubt in an otherwise clear
statute.

Berkeley County Pub. Serv. Sewer Dist. v. West Va. Pub. Serv.

Comm’n, 512 S.E.2d 201, 208-09 (W.Va. 1998) (internal

punctuation altered and citations omitted); see also In re Greg

H., 542 S.E.2d 919, 923 (W.Va. 2000) (stating that where the

legislature defines a statutory term, “such definition is

ordinarily binding upon the courts and excludes any meaning that

is not stated”).

Apart from the foregoing, we are not persuaded that § 31D-

15-1501 would in any event be relevant to an interpretation of

§ 21-5-1(n). In Kimball v. Sundstrom & Stratton Co., 92 S.E.

737 (W.Va. 1917), the court considered whether a foreign

corporation was “doing business” in West Virginia for purposes

of a statute that granted a lien in favor of employees for the

10
value of their labor against corporations that were “doing

business” in the state. The corporation had contracted to

construct railroads in West Virginia; after completing its

contracts, it kept on the payroll two employees who generally

took care of the plant and property. Eventually, the employees

sought to establish a lien against the corporation for unpaid

wages.

Although the facts of that case are dissimilar to this

case, two points are instructive. First, the court declined to

give the statutory language “doing business” a narrow

construction. See id. at 739. Second, in considering cases

that the corporation argued to support its position that it was

not “doing business” in the state, the court indicated its

disapproval of looking at other areas of law to ascertain the

meaning of the “doing business” language in the context of

workers’ rights. Specifically, the court stated:

Most of the cases we find, relating to this subject,
involve questions of taxation, jurisdiction by legal
process, and the right of foreign corporations to do
business in the state, and are unlike the case we have
here, involving the right of employees or workmen,
performing work or labor, to liens therefor upon the
property of a corporation, and to the benefits of the
statute.

Id. We believe that FRI’s attempt to read § 21-5-1(n) in pari

materia with § 31D-15-1501, which has a very different purpose,

runs afoul of both of these aspects of the holding in Kimball.

11
 IV

FRI also argues that even if the WPCA applies, the district

court erred by holding that its commission payments to Gregory

violated the act. As noted, the WPCA requires a corporation to

pay its discharged employee’s wages in full within 72 hours, and

a corporation that fails to adhere to this requirement “shall,

in addition to the amount which was unpaid when due, be liable

to the employee for three times that unpaid amount as liquidated

damages.” W.Va. Code § 21-5-4(e).

In holding that FRI violated the WPCA, the court concluded

that FRI’s commission payment policies (which control the amount

and timing) contravene the act and, therefore, FRI’s reliance on

them is unavailing. With this holding, the court found the June

commission payment to be untimely because FRI did not pay

Gregory within 72 hours of his termination. The court found the

post-discharge payments (1) to be untimely because they were not

paid within 72 hours of the end of the month in which they were

earned and (2) to be less than was owed because FRI reduced them

by 50% pursuant to the CPP. In our view, the court is partially

correct.

As noted, the WPCA regulates the timing of payment of

wages. However, it does not regulate the amount of wages, and

it does not establish how or when wages are earned. Rather,

these are matters that arise from the employment agreement.

12
See, e.g., Saunders v. Tri-State Block Corp., 535 S.E.2d 215,

219 (W.Va. 2000) (holding in a WPCA case that the amount of the

plaintiff-employee’s damages for unpaid commissions was to be

determined by the documents establishing the employment

relationship); Meadows, 530 S.E.2d at 689 (holding in a WPCA

case that fringe benefits, which are a form of “wages” under the

WPCA, are set by the employment agreement).

In this case, it appears to be undisputed that the

employment agreement between FRI and its salespeople, manifested

in the CPP (as modified), established that commissions would be

paid on shipped units. Moreover, the employment agreement also

established that when a salesperson left employment with FRI,

FRI would pay the salesperson 50% of the commission on any order

that is logged in and not yet shipped. 3 These provisions do not

contravene any provision of the WPCA. Instead, they merely

establish the amount of commissions and when they are earned.

Viewing the record in this light, we hold that FRI violated

the WPCA by failing to pay Gregory his June commissions (which

were earned on units that shipped during June) within 72 hours

of his termination. Further, we hold that FRI violated the WPCA

3
To the extent (if any) that FRI’s rationale for the 50%
reduction is relevant, we note that FRI presented evidence that
its salespeople’s duties extend beyond delivery of the sold
product. Obviously, a salesperson who is no longer employed
cannot perform these ongoing duties.

13
by failing to pay Gregory his full July commissions for units

that shipped (and were thus earned) by July 13, 2007, within 72

hours. We do not agree with FRI that its commission payment

schedule (as reflected in the CPP and the pay-date memo) relates

to when commissions are earned; rather, it simply establishes

when they are to be paid. Because the WPCA mandates payments of

earned wages within 72 hours of discharge, FRI’s reliance on the

payment schedule, and its consequential payment of the June

commissions and the early July commissions more than 72 hours

after termination, runs afoul of the WPCA.

However, we hold that FRI did not violate the WPCA with

respect to any commissions based on units that shipped after

July 13, 2007. FRI could not have paid those commissions within

72 hours of Gregory’s termination because they were not earned

at that time under the terms of the parties’ employment

agreement. Moreover, contrary to the district court’s holding,

nothing in the WPCA supports the conclusion that those payments

had to be made within 72 hours of the beginning of each month.

Rather, the WPCA is silent regarding this circumstance. 4

4
We emphasize that our ruling is based on the specific
facts and arguments before us. Thus, we need not decide what
remedies might be available if an employer (unlike FRI)
unreasonably held wages that were earned at some point after the
termination. Moreover, we have no occasion to consider whether
FRI’s practice of paying commissions on a monthly basis accords
(Continued)
14
Further, FRI’s reduction of post-discharge commissions by 50%

accords with the employment agreement existing between FRI and

its salespeople.

V

Based on the foregoing, we affirm in part, reverse in part,

and remand for further proceedings consistent with this opinion.

AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED

with the requirement of § 21-5-3(a) that an employer must
generally pay wages that are due every two weeks.

15
DAVIS, Circuit Judge, concurring in part and dissenting in part:

Unlike the majority, I find that Forest River, Inc. (“FRI”)

violated West Virginia law when it paid Gregory one-half of his

standard wages for the sole reason that FRI fired him. On this

issue alone, I respectfully dissent.

As the majority notes, the West Virginia Wage Payment and

Collection Act (“WPCA”) does not regulate the amount of wages

and does not establish how or when wages are earned. Maj. Op at

12. But the WPCA does require employers to pay its employees

“in full” for work performed, W.Va. Code § 21-5-4(b), and

forbids employers from creating contracts that permit them to

pay less than that amount. W.Va. Code § 21-5-10. The applicable

provision states:

Except as provided in section thirteen, no provision
of this article may in any way be contravened or set
aside by private agreement, and the acceptance by an
employee of a partial payment of wages shall not
constitute a release as to the balance of his claim
and any release required as a condition of such
payment shall be null and void.

W.Va. Code § 21-5-10 (emphasis added). Thus, under West

Virginia law, if Gregory completed his work selling the RVs

under contract, FRI cannot change his compensation merely

because they fired him. But FRI does exactly that in its

16
Commission Payment Policy (“CPP”). Thus, as applied to the

facts in this case, FRI’s CCP policy violates the WPCA. 1

1
FRI argues that the WPCA only precludes agreements under
which employees forfeit their statutory right to wages they have
earned – and whether the employee has earned the wage or not
depends on the employer/employee contract. Appellant’s Br. at
37 (citing Meadows v. Wal-Mart Stores, Inc., 530 S.E.2d 676, 689
(W. Va. 1999), and Gress v. Petersburg Food LLC, 592 S.E.2d 811,
815 (W. Va. 2003)). The majority accepts these arguments in
part, relying on the same cases. These arguments fail, however,
because they assume that the relevant contract is valid, and
here, the contract is invalid because it violates the WPCA by
deducting half of an employee’s compensation merely because an
employee has been fired.
The majority reasons that this court must prioritize the
employer’s policy over the WPCA, but these cases provide scant
support for that approach. Further, both cases address fringe
benefits, which are controlled by a different statutory
provision from that related to wages. In Meadows, the highest
court in West Virginia addressed whether WPCA requires employers
to pay employees unused sick leave or vacation pay in the same
manner as wages, regardless of the terms of the applicable
employment policy, upon separation from employment. The court
found that it does not, instead holding that the specific
provisions concerning fringe benefits of the applicable
employment policy determine whether the fringe benefits at issue
are included in the term “wages” under the WPCA. Meadows, 530
S.E.2d at 690, 217.
In Gress, the court held that before a fringe benefit is
payable to an employee, it must have accrued and that accrual is
defined by the employer’s policy. Gress found that a
consistently applied unwritten employment policy (that an
employee may only take vacation in five-day increments after
each full year of employment and that the employer would not pay
employees for partial weeks of unused vacation at the time of
discharge) could support an employer's defense against a WPCA
suit employees knew about the unwritten policy Gress, 592 S.E.2d
at 814-15.
Again, these cases are distinguishable because they address
fringe benefits, and the WPCA uses different language for fringe
benefits and wages. Employers may withhold fringe benefits if
they have not “accrued” or “vested,” but they may not do the
same with wages. W. Va. Code, § 21-5-1(c).

17
 The majority argues that FRI is entitled to determine how

and how much to pay its employees, and clearly, as a general

matter, that is true. But FRI’s method of payment is not immune

from the WPCA, and the company should not be permitted to use

its policy to circumvent the law.

Under the WPCA, if Gregory completed his responsibilities

as a salesperson prior to his termination, then Forest River

cannot decrease his wages by 50% for any reason, including the

reason relied on in this case – that the company fired him.

Likewise, if Gregory failed to complete his work, then

presumably FRI can compensate him accordingly. 2 See Britner v.

Madical Security Card, Inc., 200 W. Va. 352 (1997) (rejecting a

challenge to the WPCA from an employer that attempted to

contract around W. Va. Code 21-5-10). It does not matter if

this 50% decrease is rooted in malice or based on a written

policy, under the WPCA; if the decrease is solely because

Gregory was fired, it is illegal.

2
Because we are concerned about whether FRI is failing to
compensate its employees for fully-performed work, we do care
about whether a salesperson’s duties extend beyond the delivery
of the sold product. These subsequent duties simply do not
exist. Cf. Maj. Op. at 13 n.3. It appears that the only task
required of Gregory after he made a sale was to compare the
original order to the confirmation order generated by the
corporate office, a de minimus task at best, and one possibly
completed by Gregory prior to his termination. J.A. 81-82.

18
 FRI claims that the 50% decrease was because Gregory did

not complete his work on the sales that shipped after his

termination. The evidence in the record, however, makes it

clear that this is not true because Gregory did fulfill his job

responsibilities prior to his termination with respect to his

sales. Gregory’s boss, Kevin McArt, testified that Gregory’s

responsibilities entailed “[i]n general terms, to close open

distribution points and solicit orders.” J.A. 69. McArt

further testified that other FRI employees handle tasks

subsequent to the actual sale, tasks such as the processing,

scheduling, coordinating, shipping, invoicing and delivery of

the product. J.A. 80-83, 90-91. The point is further evidenced

by the fact that FRI did not pay the remaining 50% of Gregory’s

commission to any other salesperson or employee at FRI.

Appellee’s Br. at 33-35. Thus, the company earns a windfall

when a commission-based employee such as Gregory is terminated.

The reality is, at least at FRI, that after the sale is

submitted by the salesperson, the salesmen’s job is over. 3

3
FRI claims that it pays departing employees only 50% of
their compensation because salespeople who leave the company are
not present to perform “the many duties associated with seeing a
sale through to shipment.” Appellant’s Br. at 33. This argument,
however, is conclusively refuted by McArt’s testimony.
Moreover, FRI failed to identify any of these “many duties” in
its brief or at oral argument. Lawyer argument should not be
accepted as a substitute for probative evidence.

19
 Thus, under the WPCA, Gregory is entitled to his full wages

for his work, notwithstanding his former employer’s attempt to

contract around the law of West Virginia. As the district court

concluded, FRI should have paid him this money “in full.” W.

Va. Code 21-5-4(b). Accordingly, I would affirm the judgment in

its entirety.

20