FILED
DECEMBER 18, 2018
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
CHARLES PEIFFER, )
) No. 34715-0-III
Respondent/Cross Appellant, )
)
v. )
)
PRO-CUT CONCRETE CUTTING ) PUBLISHED OPINION
AND BREAKING INC. (UBI No. )
602427891); and KELLY R. SILVERS )
and ERIN SILVERS, husband and wife )
and the marital community comprised )
thereof; )
)
Appellants/Cross Respondents, )
)
MONTE SAINSBURY and SHELLY )
SAINSBURY, and the marital community )
comprised thereof, )
)
Defendants. )
SIDDOWAY, J. — An employer appeals and its employee cross appeals errors that
allegedly occurred in the bench trial of the employee’s claim for unpaid wages and
constructive discharge in violation of public policy. Each prevails in part.
No. 34715-0-III
Peiffer v. Pro-Cut Concrete, et al.
We affirm the trial court’s rulings that the statute of limitations for Charles
Peiffer’s wage claim was tolled during the period his wage complaint was under
investigation by the Department of Labor and Industries, and that Mr. Peiffer was entitled
to an award of his reasonable attorney fees and costs.
We reverse the trial court’s dismissal of Mr. Peiffer’s claim for constructive
wrongful termination in violation of public policy, reverse its award of an amount to
compensate Mr. Peiffer for an increased tax liability, reverse its finding that Mr. Peiffer
knowingly submitted to withholding of his wages, and reverse and remand the
inadequately-explained attorney fee and cost award.
We remand for a new trial on the constructive wrongful termination claim, for
reconsideration of the award of reasonable attorney fees and costs and the entry of
sufficient findings, and with directions to enter a supplemental judgment that will afford
Mr. Peiffer double damages for his wage claim less the $8,784 tax-related amount that
was awarded in error.
FACTS AND PROCEDURAL BACKGROUND
Charles Peiffer worked at Pro-Cut Concrete Cutting and Breaking, Inc.
intermittently over a period of 23 years. He began working at Pro-Cut in 1989 when he
was 16, soon leaving its employ to attend trade school and participate in a Job Corps
program. He resumed working at Pro-Cut when he was 18 or 19 and over time was
trained as a slab saw operator. He left Pro-Cut’s employ for another job but returned in
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2005, at Pro-Cut’s invitation. By the time of his return in 2005, Kelly Silvers and his
wife had purchased the company.
As a slab saw operator, Mr. Peiffer was required to pick up a company vehicle at
Pro-Cut’s business location, which he would then drive to his assigned job site. Pursuant
to a written travel policy, Pro-Cut’s employees were not paid for the first 30 minutes or
last 30 minutes of drive time between Pro-Cut’s shop and a job site, the company’s
reasoning being that it could not charge the customer for that time. The policy predated
the Silvers’ ownership and was in place the entire time Peiffer worked at Pro-Cut.
Mr. Peiffer submitted a time card each week for his hours worked. In 2008, Mr.
Peiffer noticed that his time cards, which were reviewed by his supervisor, Monte
Sainsbury, were being altered. Times recorded by Mr. Peiffer were sometimes “whited
out” and new times were written in. Report of Proceedings (RP) at 213. It turned out
that when Mr. Sainsbury believed employees had inflated their work time, he would alter
their time cards to reflect what he believed was accurate time, including to remove time
entered for the first and last half-hour of travel. Mr. Silvers was aware of Mr.
Sainsbury’s action in changing time cards.
Mr. Peiffer objected to Mr. Sainsbury’s alteration of his time cards. On one
occasion, his objection led to a physical altercation between the two men. Mr. Peiffer
was told that if he did not like the policy, he could quit.
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Ultimately, Mr. Peiffer did quit. It was on June 8, 2012, after Mr. Sainsbury had
again altered Mr. Peiffer’s time card. Mr. Peiffer later testified that when he saw how
many lines of his time card were whited out “that was it.” RP at 221. He refused to
return to work unless Pro-Cut paid him the full wages owed him. Mr. Peiffer’s last
paycheck was in an amount that reflected a reduction of roughly 10 of the hours he had
reported. At his prevailing wage at $28.78, that amounted to approximately $300 of
withheld wages for the week.
On July 3, 2012, Mr. Peiffer filed a wage complaint with the Department of Labor
and Industries, which immediately opened an investigation. The Department’s
investigation remained open for 14 months during which it never issued a citation or
notice of assessment and no administrative action was begun. According to Anna
Sanchez, the department investigator assigned to Mr. Peiffer’s claim, she was able to
determine that “there were clearly some wage violations” but his claim was “extremely
difficult.” RP at 176-77. Mr. Peiffer submitted records of invoices, time cards, and pay
stubs to the Department, but he acknowledges that the records he provided were
incomplete.
Ms. Sanchez was aware that statutes under which the Department operates
contemplate that an investigation will be completed in 60 days. By statute, the
Department is required to provide advance written notice if it has good cause for taking
longer to complete its investigation, and is required to specify the duration of the
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extension. During the 14 months the Department’s investigation was pending, Ms.
Sanchez sent a number of “60-day letters” to Mr. Peiffer, indicating that his claim
required more time to investigate. RP at 175, 178. She did not send copies of the 60-day
letters to Pro-Cut.
When questioned in the trial below, Ms. Sanchez explained that she was the only
investigator for Benton, Franklin, Columbia, Walla Walla, and Spokane Counties and
given her caseload and the volume of records delivered by Mr. Peiffer, it was difficult to
create a calculation of Mr. Peiffer’s unpaid wages. She told him several times during the
months the investigation was pending that he needed to provide a calculation of his
unpaid wages. He responded several times that he had no calculation, and would go
along with whatever the Department calculated his unpaid wages to be.
Having reached this impasse, and having waited well over a year for department
action on his claim, Mr. Peiffer retained a lawyer, Alicia Berry. She filed suit on his
behalf against Pro-Cut, Mr. Silvers, Mr. Sainsbury and the men’s wives and marital
communities on November 22, 2013. The complaint included nine causes of action.
Among them were several causes of action seeking unpaid wages and prejudgment
interest. The complaint also included a claim for constructive wrongful termination in
violation of public policy. Mr. Peiffer alleged he had been unable to obtain work that
paid as well as his former work as a slab saw operator, and he sought to recover back pay
and front pay.
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Upon learning of Mr. Peiffer’s lawsuit from Ms. Berry a few days after it was
filed, Ms. Sanchez wrote what she described as a “closure letter” to Mr. Peiffer dated
November 27, 2013. Although the letter is not in our record on appeal, she evidently
stated that in light of his lawsuit she was terminating her investigation.
The lawsuit filed by Ms. Berry put Pro-Cut on notice for the first time that Mr.
Peiffer had filed a wage complaint with the Department.
After suit was filed, the jointly-represented defendants delivered a series of what
their lawyer described as “stipulation[s] as to the amount owing” in an effort to avoid
liability for Mr. Peiffer’s reasonable attorney fees under RCW 49.48.030.1 Clerk’s
Papers (CP) at 46. In the final stipulation the defendants filed before trial, they admitted
to wages owed of $31,631.69. As explained by the defendants’ lawyer, this was based on
a letter from Ms. Berry dated May 3, 2016, that provided her calculation of the wages
owed, although the defendants then adjusted Ms. Berry’s calculation downward. Ms.
Berry’s calculation included unpaid wages owed beginning in June 2009, based on Mr.
1
The statute provides:
In any action in which any person is successful in recovering judgment for
wages or salary owed to him or her, reasonable attorney’s fees, in an
amount to be determined by the court, shall be assessed against said
employer or former employer: PROVIDED, HOWEVER, That this section
shall not apply if the amount of recovery is less than or equal to the amount
admitted by the employer to be owing for said wages or salary.
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Peiffer’s position that the statute of limitations on his wage claim was tolled during the
Department’s investigation. The defendants reduced Ms. Berry’s calculation based on
their position that the statute of limitations was not tolled. They limited the amount of
their admitted liability to unpaid wages owed beginning in November 2010.
The lawsuit proceeded to a bench trial. In addition to presenting evidence of the
amount of unpaid wages, prejudgment interest, and reduced earnings, Mr. Peiffer
presented evidence that he and his wife would pay additional federal income tax as a
result of receiving his unpaid wages in a lump sum. The defendants presented no
evidence on the tax issue.
After Mr. Peiffer rested his case, the defendants moved the court for involuntary
dismissal of a number of his claims under CR 41(b)(3). The trial court did not rule on the
motion immediately, wanting to receive responsive briefing. When the motion was
brought up the next day, the trial court stated that it would address the CR 41(b)(3)
motion in closing and was “going to make [its] ruling all in one.” RP at 262.
At the conclusion of the bench trial, the court dismissed the claims against the
Sainsburys and otherwise ruled as follows:
It determined that by filing a claim with the Department, the statute of
limitations on Mr. Peiffer’s claim was tolled and it awarded Mr. Peiffer
withheld wages in the amount of $42,768.12;
It awarded Mr. Peiffer prejudgment interest of $28,491.40;
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It awarded Mr. Peiffer the amount of $8,784.00 to offset his increased tax
liability on account of receiving his unpaid wages in a lump sum;
It determined that Pro-Cut and the Silvers had been willful in withholding
wages but that Mr. Peiffer knowingly submitted to the withholding, so it
denied Mr. Peiffer’s request for an award of double damages under RCW
49.52.070;
It found that Mr. Peiffer was entitled to an award of his reasonable attorney
fees and costs under RCW 49.48.030, having recovered more in wages than
Pro-Cut had admitted was due; and
It granted the defendants’ CR 41(b)(3) motion for dismissal of Mr. Peiffer’s
claims for breach of contract, violation of the Consumer Protection Act,
chapter 19.86 RCW, and constructive wrongful termination.
The amount of reasonable attorney fees and costs to be awarded Mr. Peiffer was
argued thereafter. Ms. Berry and her co-counsel, Brian Davis, submitted a declaration
and affidavit, respectively, with attached time records, documenting a lodestar fee
measure of $73,395.50. They had represented Mr. Peiffer under a contingent fee
agreement and sought a multiplier based on risk associated with taking the case.
Mr. Peiffer sought $9,778.82 in costs, some of which were for reimbursement of
Ms. Berry’s costs of traveling to Washington State for the trial. After taking the case
while resident in Washington, Ms. Berry and her family moved to the east coast. While
she associated Mr. Davis to handle pretrial court appearances, she traveled to Washington
State for trial, including on one occasion when the case was set for trial but was bumped
by other cases.
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Although the court made three findings that courts sometimes view as supporting a
multiplier, the trial court awarded attorney fees to Mr. Peiffer in the rounded amount of
$50,000.00 without an explanation for the reduction from the lodestar figure other than
that $50,000.00 was “a reasonable amount.” RP at 314. In its written findings, the court
described its award as the “reasonable and necessary” amount. CP at 127. It awarded
$5,503.13 in costs. The cost amount was also unexplained, although it is pointed out on
appeal that the amount can be arrived at by subtracting Ms. Berry’s travel costs from Mr.
Peiffer’s requested costs.
Pro-Cut appeals. Mr. Peiffer cross appeals.
ANALYSIS
Appeal
Pro-Cut2 makes three assignments of error on appeal. It contends the trial court
erred (1) in determining that Mr. Peiffer’s wage claim was tolled during the Department’s
investigation, (2) in awarding Mr. Peiffer attorney fees and costs, and (3) in awarding
damages to compensate for an increased tax liability. We address the claimed errors in
the order stated.
I. THE STATUTE OF LIMITATIONS FOR CIVIL ACTIONS IS TOLLED DURING A
DEPARTMENT INVESTIGATION WHETHER THE EMPLOYEE RESOLVES A CLAIM
ADMINISTRATIVELY OR THROUGH A CIVIL ACTION
2
Judgment was entered jointly and severally against Pro-Cut and the Silvers and
all of them appeal. For simplicity we refer to them collectively as “Pro-Cut.”
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The parties agree that the statute of limitations applicable to Mr. Peiffer’s wage
claims is three years. RCW 4.16.080(3) (applicable to actions on implied contracts);
Seattle Prof’l Eng’g Emps. Ass’n v. Boeing Co., 139 Wn.2d 824, 837-38, 991 P.2d 1126
(2000). Pro-Cut contends the trial court erred when it ruled that the statute of limitations
was tolled when Mr. Peiffer filed his wage complaint with the Department and awarded
Mr. Peiffer unpaid wages going back to July 3, 2009.
Washington law provides that the Department “shall investigate” a wage
complaint filed with the Department. RCW 49.48.083(1). It “shall issue either a citation
and notice of assessment or a determination of compliance” unless the wage complaint is
“otherwise resolved.” Id. If the Department finds a violation, it issues a citation and
notice of assessment that is served on the employer and employee. Id. An employer
aggrieved by a citation and notice of assessment has 30 days within which to file a notice
of appeal with the department director, failing which the citation and notice of assessment
become final and binding. RCW 49.48.084(1).
Having issued the citation and notice of assessment, the Department may order the
employer to pay the complaining employee all wages owed for the three years preceding
the filing of the wage complaint, including interest of one percent per month on the
wages owed. RCW 49.48.083(2). Payment by the employer and acceptance by the
employee of the wages and interest assessed by the Department bars the employee from
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initiating and pursuing any court action based on the wage payment requirements
addressed in the citation and notice of assessment. RCW 49.48.083(4).
A wage complainant who receives his or her copy of a citation and notice of
assessment served by the Department on the employer is permitted by RCW 49.48.085(1)
to terminate the Department’s administrative action by providing written notice to the
Department within 10 business days. The statute goes on to provide in its subsection
(3)(a) that “[n]othing in this section shall be construed to limit or affect . . . [t]he right of
any employee to pursue any judicial, administrative, or other action available with respect
to an employer.”
Zeroing in on the statutory language on which the tolling issue turns, RCW
49.48.083(5) provides,
The applicable statute of limitations for civil actions is tolled during the
department’s investigation of an employee’s wage complaint against an
employer.
It then more particularly identifies the beginning and end of the tolling period, as
follows:
For the purposes of this subsection, the department’s investigation begins
on the date the employee files the wage complaint with the department and
ends when: (a) The wage complaint is finally determined through a final
and binding citation and notice of assessment or determination of
compliance; or (b) the department notifies the employer and the employee
in writing that the wage complaint has been otherwise resolved or that the
employee has elected to terminate the department’s administrative action
under RCW 49.48.085.
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Id. (emphasis added).
Application of this provision presents a question of statutory interpretation that we
review de novo. State v. Bradshaw, 152 Wn.2d 528, 531, 98 P.3d 1190 (2004). We
begin by looking at the plain meaning of the statute as expressed through the words
themselves. Tesoro Ref. & Mktg. Co. v. Dep’t of Revenue, 164 Wn.2d 310, 317, 190 P.3d
28 (2008). Where the meaning of the statute is plain and unambiguous, we give effect to
that plain meaning. Overlake Hosp. Ass’n v. Dep’t of Health, 170 Wn.2d 43, 52, 239
P.3d 1095 (2010). Only if the language is ambiguous do we look to aids of statutory
construction, such as legislative history. State v. Armendariz, 160 Wn.2d 106, 110-11,
156 P.3d 201 (2007).
Ms. Sanchez’s testimony in the trial below established that the Department had an
open investigation of Mr. Peiffer’s wage complaint against Pro-Cut from July 3, 2012,
until she terminated the investigation on November 27, 2013. Applying the plain
meaning of the first sentence of RCW 49.48.083(5), the applicable statute of limitations
for civil actions was tolled during that time. Pro-Cut argues that the more particular
identification of the beginning and end dates of the tolling period leads to a different
result, however.
The parties agree that the Department’s investigation began on July 3, 2012. They
agree that the subparagraph (a) end date of the tolling period does not apply, because Mr.
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Peiffer’s wage complaint was never finally determined through a final and binding
citation and notice of assessment or determination of compliance.
They agree that one of the subparagraph (b) end dates—“that the employee has
elected to terminate the Department’s administrative action under RCW 49.48.085”—
does not apply, because the 10-day postcitation right to terminate the Department’s
investigation never arose and could never have been exercised by Mr. Peiffer.
That leaves the parties with three theories of how RCW 48.49.083(5) applies on
these facts. Mr. Peiffer advances two arguments. One is that the remaining subparagraph
(b) end date applies because Ms. Sanchez’s November 27 closing letter “notifie[d] the
employer and the employee in writing that the wage complaint has been otherwise
resolved.” There are two problems with this argument. One is that the wage complaint
had not been “resolved” in the commonly-understood meaning of that word.3 The second
is that the Department did not notify “the employer and employee in writing,” since its
closing letter was sent only to Mr. Peiffer.
Mr. Peiffer’s second argument is that according to the plain language of RCW
49.48.083(5), nothing happened to make the tolling period end, meaning that tolling
3
Relevant definitions of “resolve” include “5 . . . c : to find an answer to : make
clear or certain : SOLVE, UNRIDDLE (~ a problem) 6 a : to bring oneself or another to (as a
course of action) : DECIDE . . . b : to reach a decision about :
SETTLE .” WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY 1933 (1993).
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applies. Pro-Cut agrees that under the plain language of the provision nothing happened
to make the tolling period end. But it argues,
[T]he question becomes, what did the legislature intend if the “end” of the
tolling period is never triggered?
In its wisdom, the legislature designed the specificities of the tolling
statute with the purpose of encouraging employees to see the Department’s
investigation through to the end. Otherwise, employees could simply
initiate the Department’s investigation, fail to meaningfully assist in the
investigation, thereby artificially tolling the statute of limitations
indefinitely. This result encourages employees to abuse the resources of
the Department to their own strategic advantage, and deprives employers of
the finality of a Department decision they can act upon to remedy their
mistake.
Appellants/Cross-Resp’t’s Opening Br. at 12. “[B]ecause he did not allow the
Department to reach a conclusion,” Pro-Cut contends, “Mr. Peiffer cannot . . . take
advantage of the tolling of the statute of limitations.” Id. at 13. Unfortunately for Pro-
Cut, statutory language does not support its theory about the legislature’s intent.
We begin with Pro-Cut’s textual arguments. Its primary reliance is on RCW
49.48.085(1), which states:
An employee who has filed a wage complaint with the department may
elect to terminate the department’s administrative action, thereby
preserving any private right of action, by providing written notice to the
department within ten business days after the employee’s receipt of the
department’s citation and notice of assessment.
Pro-Cut sometimes treats the language “thereby preserving any private right of action” as
if it said “thereby preserving the benefit of tolling,” which is plainly not what it says. The
provision does not speak to tolling at all.
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Pro-Cut treats the language about electing to “terminate the department’s
administrative action” as if it said “terminate the employee’s exclusive reliance on an
administrative remedy,” but here again, that is plainly not what is said. RCW
49.48.085(1) identifies the only circumstance in chapter 49.48 RCW under which an
employee can stop an investigation that the Department is otherwise obliged to pursue.4
It says nothing about whether an employee can bring a civil action and allow the
department investigation to proceed. Even a federal case cited by Pro-Cut, Jama v. GCA
Services Group, Inc., finds no statutory prohibition against administrative action and
litigation proceeding simultaneously. No. C16-0331RSL, 2017 WL 4758722 (W. D.
Wash. Oct. 20, 2017) (court order). Jama involved a proposed class action, in which the
defendant-employer argued that including employees who had filed wage complaints
with the Department as members would deprive those employees of the administrative
forum. The court disagreed:
No legal analysis is offered in support of this assertion. State law
authorizes employees to file a wage complaint with Labor & Industries
[DLI] regarding any wage violations that occurred within the past three
years. RCW 49.48.083(1). The filing of an administrative complaint tolls
the statute of limitation and, if DLI assesses wages and interest against the
employer and the employee accepts payment, the employee is barred from
4
Before 2006, the Department could, but was not required to, investigate wage
complaints. With the 2006 adoption of the Wage Payment Act, the Department is
required to investigate such complaints. The history of the requirement is discussed in
Washington Attorney General Opinion No. 6 (2010). 2010 Op. Att’y Gen. No. 6,
https://www.atg.wa.gov/print/3194 [https://perma.cc/9MNS-6B3H].
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pursuing relief in court for that violation. RCW 49.48.083(4) and (5). The
Court has not found, and defendants have not identified, any provision that
would automatically terminate a pending administrative investigation upon
the filing of a lawsuit. Although the statute specifically authorizes
employees who have filed wage complaints with the DLI to terminate the
administrative action in order to pursue litigation, it expressly states that the
“right of any employee to pursue any judicial administrative, or other action
available with respect to an employer” is not limited or affected. RCW
49.48.085(1) and (3).
Id. at *5 (emphasis added). The Department might have the ability to suspend work on a
file upon learning that a wage complainant is pursuing private litigation, but we find no
statutory basis for the Department to terminate its investigation because litigation has
been filed.5
Pro-Cut’s final textual argument refers us to legislative history from 2006, and a
drafting change between original language in House Bill 3185 and revised language in
Substitute House Bill 3185 that was later codified as RCW 49.48.085(1). Pro-Cut relies
on the ultimately codified language that the employee may elect to terminate the
Department’s investigation by providing notice “within ten business days after” receipt of
the citation and notice of assessment—language that originally read “within five business
days of” receipt of the citation and notice of assessment. Compare SUBSTITUTE H.B.
3185, § 4, at 5, 59th Leg., Reg. Sess. (Wash. 2006), with H.B. 3185, § 4, at 4, 59th Leg.,
5
We say “might” because the Department’s duty or authority when litigation is
filed while an investigation is pending has not been briefed and argued by the parties.
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Reg. Sess. (Wash. 2006). Pro-Cut contends that use of the word “after” “ensure[s]” that
the Department must complete its investigation for the tolling provision to apply.
Appellants/Cross-Resp’t’s Opening Br. at 14. But nowhere in RCW 49.48.085 is there
any reference to “toll,” “tolling,” or even to “RCW 49.48.083.” The language on which
Pro-Cut relies simply has nothing to do with tolling.6
We turn to Pro-Cut’s non-textual argument that the legislature’s objective was to
“encourage[ ] employees to see the Department’s investigation through to the end”—an
objective it argues is advanced by making tolling available to only those employees who
wait for the Department to complete its investigation before electing to file a lawsuit.
Pro-Cut argues that employees who do not wait “abuse the resources of the Department.”
Appellants/Cross-Resp’t’s Opening Br. at at 12.
Such employees “use” resources of the Department, but Pro-Cut does not explain
how they “abuse” them. The legislature has charged the Department with investigating
6
Pro-Cut overlooks reasons why the Department’s issuance of a citation is a valid
point at which to require employees to decide whether to stop the Department’s
investigation. At that point, the employee will know the amount of unpaid wages the
Department is willing to fight for. With the citation and notice of assessment, things will
start happening quickly. An employer who realizes there has been a violation might want
to pay within 10 days to be entitled to a penalty waiver and avoid additional prejudgment
interest. See RCW 49.48.083(2), (3)(c). Within 30 days, the employer will need to file
any appeal, and in the event of an appeal, the hearing will be assigned to an
administrative law judge, an initial order will issue, and an assistant attorney general will
need to be appointed to represent the Department. RCW 49.48.084(1), (3). These things
would, or could, prove pointless if the employee wishes to litigate.
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wage complaints. The objective is to assist employees whose wages have not been paid
by an employer. If a wage complainant decides during a department investigation that
retaining a lawyer and pursuing a claim in court will be faster or more likely to succeed,
the decision both advances the interest of the employee and frees up department
resources to assist others. Pro-Cut’s vision of a legislature that intends the Department to
maintain a jealous grip on complaints it cannot timely resolve is unpersuasive.
We also reject Pro-Cut’s argument that permitting an employee to file a wage
complaint with the Department and then shift to litigation “artificially” tolls the statute of
limitations “indefinitely,” to the employee’s own “strategic advantage.” Id. The tolling
will not be indefinite. It will not even be protracted if the Department completes its
investigation within the 60 days contemplated by the legislature. And we do not view the
employee as gaining a “strategic advantage” if tolling locks in the employee’s ability to
collect all wages earned but unpaid during the prior three years. Going on record with a
formal claim in a proper forum is a typical way to lock in the ability to collect damages
that accrued during a limitations period.
Our only agreement with Pro-Cut on this issue is that it was disadvantaged by
being unaware of Mr. Peiffer’s wage complaint earlier. Upon learning of the wage
complaint, Pro-Cut quickly realized that it should admit the amount of wages owed in
order to avoid liability for attorney fees. But the lack of notice to Pro-Cut was the fault
of the Department, not Mr. Peiffer. Pro-Cut should have received the first 60-day letter
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that Ms. Sanchez sent to Mr. Peiffer, whether or not she had communicated with Pro-Cut
earlier. RCW 49.48.083(1) provides that if the Department is unable to complete its
investigation within 60 days of receiving a wage complaint, it “may extend the time
period by providing advance written notice to the employee and the employer setting
forth good cause for an extension of the time period and specifying the duration of the
extension.” (Emphasis added.)
We are not at all sympathetic to Pro-Cut’s complaint that it incurred the cost of
additional prejudgment interest because of the time it took Ms. Berry to deliver a final
calculation of Mr. Peiffer’s wages. The difficulty in accounting for the unpaid wages was
entirely attributable to Pro-Cut’s practice of altering time cards and failing to keep a
record of the amount of time originally reported by the employee.7 The duty to keep
accurate time records is the employer’s, not the employee’s. WAC 296-128-010. If Pro-
Cut wanted a quicker calculation, it could have engaged in any needed discovery and
worked on preparing one itself.
If an employee files a wage complaint with the Department and then files a civil
action while the investigation is pending, RCW 49.48.083(5), reasonably construed, tolls
7
Because Pro-Cut stipulated to Mr. Peiffer’s final wage calculation, no evidence
was presented at trial about the challenges in preparing the calculation. Arguments of
counsel during the bench trial referred to the difficulty of calculating the wage amount
and the extensive document discovery required. See, e.g., RP at 96-98. It is clear that
information in both sides’ possession was ultimately required to arrive at a calculation.
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the statute of limitations until the Department resolves the complaint or the civil action is
completed, at which point the Department can send notice that the matter has been
“otherwise resolved.” The trial court correctly ruled that the tolling provision applied to
Mr. Peiffer.
II. HAVING DETERMINED THAT THE STATUTE OF LIMITATIONS WAS TOLLED, MR.
PEIFFER WAS ENTITLED TO AN AWARD OF REASONABLE ATTORNEY FEES AND
COSTS
Washington statutes authorize trial courts to award attorney fees to successful
wage claimants, but RCW 49.48.030 takes that authority away “if the amount of recovery
is less than or equal to the amount admitted by the employer to be owing for said wages
or salary.” Pro-Cut’s assignment of error to the attorney fees and costs awarded to Mr.
Peiffer depended on successfully arguing that his claim was not tolled during the
Department’s investigation, in which case his recovery would have been equal to the
amount Pro-Cut admitted was owing.
Because the statute was tolled, Mr. Peiffer was entitled to recovery of unpaid
wages going back to July 2009, an amount that exceeded the amount admitted by Pro-Cut
to be owing. There was no error in concluding that Mr. Peiffer was entitled to recover
reasonable attorney fees and costs.
III. THE TRIAL COURT ERRED IN CONCLUDING THAT MR. PEIFFER WAS ENTITLED TO
RECOVER AN AMOUNT EQUAL TO HIS INCREASED TAX LIABILITY ARISING FROM THE
LUMP SUM PAYMENT OF HIS PREVIOUSLY UNPAID WAGES
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Pro-Cut argues the trial court erred in awarding Mr. Peiffer $8,784 to offset tax
consequences because the trial court had no statutory authority to make the award. We
agree.
In Blaney v. International Ass’n of Machinists & Aerospace Workers, District No.
160, 151 Wn.2d 203, 87 P.3d 757 (2004), our Supreme Court held that in an action for
discrimination under the Washington Law Against Discrimination (WLAD), chapter
49.60 RCW, a successful plaintiff can recover an amount offsetting the federal income
tax consequences of a damage award. It based its decision on language unique to the
WLAD.
RCW 49.60.030(2) provides that a person injured by a violation of the WLAD
shall have a civil action
to enjoin further violations, or to recover the actual damages sustained by
the person, or both, together with the cost of suit including reasonable
attorneys’ fees or any other appropriate remedy authorized by this chapter
or the United States Civil Rights Act of 1964 as amended, or the Federal
Fair Housing Amendments Act of 1988 (42 U.S.C. Sec. 3601 et seq.).
(Emphasis added.)
In Blaney, the court construed the “any other appropriate remedy” clause as
standing on its own as a remedy provision—different from, and additional to injunctive
relief, actual damages, and costs of suit. 151 Wn.2d at 214. It observed that “a number
of federal courts” in Title VII suits had used the equitable powers bestowed on them by
Title VII to allow offsets for the federal tax consequences of damage awards. Id. at 215.
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For that reason, and “[b]ecause WLAD incorporates remedies authorized by the federal
civil rights act,” it concluded that “WLAD allows offsets for additional federal income
tax consequences.” Id. at 215-16.
The court did not end its analysis with the holding that the offset was permitted by
WLAD’s “any other appropriate remedy” clause. It went on to hold that the offset was
not allowable as actual damages or as a cost. It refused to characterize an offset for
federal income tax consequences as actual damages “because the proximate cause of the
additional tax consequences is not the unlawful discrimination, but rather the additional
tax liability is a direct result of the tax laws.” Id. at 216. “[It] is too attenuated from the
unlawful discrimination to be deemed actual damages.” Id.
It refused to characterize an offset for the tax liability as a cost of suit “because tax
liability is incurred after, not during, litigation.” Id. at 217.
Blaney is controlling authority that an offset for tax consequences is not actual
damages or a cost. Mr. Peiffer argues, however, that the term “wages” in Title 49 RCW
is broadly interpreted to effectuate the legislature’s purpose of deterring employers from
withholding wages and has been construed to include back pay, front pay, sick leave
reimbursement, vacation pay, and commissions. Br. of Resp’t/Cross Appellants at 21
(citing Lietz v. Hansen Law Offices, PSC, 166 Wn. App. 571, 595, 271 P.3d 899 (2012)).
He urges us to decide as a matter of first impression that “wages,” broadly construed, can
include an offset for adverse tax consequences.
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Pay for work (back and front), sick leave reimbursement, vacation pay, and
commissions all fall within the commonly understood meaning of “wage,” which has
been defined to mean
1 a : a pledge or payment of usu. monetary remuneration by an employer
esp. for labor or services usu. according to contract and on an hourly, daily,
or piecework basis and often including bonuses, commissions, and amounts
paid by the employer for insurance, pension, hospitalization, and other
benefits.
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2568 (1993); see also RCW
49.46.010(7) (defining “wage” in relevant part as “compensation due to an employee by
reason of employment”). The increased tax liability that Mr. Peiffer incurred as a result
of recovering his unpaid wages as a lump sum has none of the salient characteristics of a
wage. The trial court erred in making an award of $8,784 to offset Mr. Peiffer’s
increased tax liability.
Cross Appeal
Mr. Peiffer makes four assignments of error in his cross appeal. He contends the
trial court erred (1) in dismissing, as a matter of law, his claim for constructive wrongful
termination in violation of public policy, (2) in denying his claim for double damages, (3)
in denying Mr. Peiffer all of his attorney fees and failing to apply a multiplier, and (4) in
denying Mr. Peiffer all of his costs. Again, we address the claimed errors in the order
stated, combining our discussion of Mr. Peiffer’s challenges to the fee and cost awards.
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IV. THE TRIAL COURT DISMISSED THE CONSTRUCTIVE WRONGFUL DISCHARGE CLAIM
AS A MATTER OF LAW, WHICH WAS ERROR
A. THE CLAIM WAS DISMISSED AS A MATTER OF LAW
Under CR 41(b)(3), a defendant in a bench trial can move for involuntary
dismissal after the plaintiff rests his or her case on the ground that “upon the facts and the
law the plaintiff has shown no right to relief.” The court “as trier of the facts” may then
determine the facts and render judgment against the plaintiff, or may decline to render
any judgment until the close of all the evidence. Id.
The trial court may grant a motion under CR 41(b)(3) as a matter of law or fact.
Roy v. Goerz, 26 Wn. App. 807, 809, 614 P.2d 1308 (1980), overruled on other grounds
by Chaplin v. Sanders, 100 Wn.2d 853, 859, 676 P.2d 431 (1984). When there is doubt
as to how the trial court ruled, the reviewing court will look to the trial court’s oral or
written opinion. N. Fiorito Co. v. State, 69 Wn.2d 616, 620, 419 P.2d 586 (1966).
Although the basis on which Pro-Cut moved for the dismissal is not clear, there is
no doubt that the trial court granted it as a matter of law. Its judgment reflects its
understanding that Pro-Cut moved during trial for dismissal “as a matter of law,” CP at
126, a motion that it granted. CP at 128. The court entered no findings of fact as
provided in CR 52(a), which it was required to do if rendering judgment on the merits.
CR 41(b)(3). Because the trial court dismissed the claim as a matter of law, “review is de
novo and the question on appeal is whether the plaintiff presented a prima facie case,
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No. 34715-0-III
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viewing the evidence in the light most favorable to the plaintiff.” In re Dependency of
Schermer, 161 Wn.2d 927, 939-40, 169 P.3d 452 (2007).
B. MR. PEIFFER PRESENTED SUFFICIENT EVIDENCE TO REQUIRE A DECISION ON
THE MERITS
“The tort for wrongful discharge in violation of public policy is a narrow
exception to the at-will doctrine” that is recognized “as a means of encouraging
employees to follow the law and preventing employers from using the at-will doctrine to
subvert those efforts to promote public policy.” Becker v. Cmty. Health Sys., Inc., 184
Wn.2d 252, 258, 359 P.3d 746 (2015). In order to succeed on a claim for wrongful
discharge in violation of public policy, a “plaintiff must plead and prove that his or her
termination was motivated by reasons that contravene an important mandate of public
policy.” Id.
“A cause of action for wrongful discharge in violation of public policy may be
based on ‘either express or constructive’ discharge.” Wahl v. Dash Point Family Dental
Clinic, Inc., 144 Wn. App. 34, 43, 181 P.3d 864 (2008) (quoting Snyder v. Med. Serv.
Corp. of E. Wash., 145 Wn.2d 233, 238, 35 P.3d 1158 (2001)). In appellate decisions
reviewing claims for constructive wrongful termination in violation of public policy,
courts commonly examine separately the elements of the tort and the elements of
constructive discharge. E.g., see id. at 41-45.
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No. 34715-0-III
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The elements of a claim for wrongful termination in violation of public policy are
that (1) the employee’s discharge may have been motivated by reasons that contravene a
clear mandate of public policy, and (2) the public-policy-linked conduct was a significant
factor in the decision to discharge the worker. Martin v. Gonzaga Univ., Wn.2d ,
425 P.3d 837, 844 (2018). The first element encompasses clarity and jeopardy
components. Id. at 843 (citing Becker, 184 Wn.2d at 258-59; Rose v. Anderson Hay &
Grain Co., 184 Wn.2d 268, 277-78, 287, 358 P.3d 1139 (2015)). If a claim does not fall
within one of the four recognized categories of wrongful discharge in violation of public
policy, the more refined Perritt8 analysis may be required. Id. In determining the second
factor, a burden-shifting procedure applies under which the employer may defeat the
claim by proving that the termination was justified by an overriding consideration.
Id. at 844.
The elements of a claim of constructive discharge are that (1) the employer
deliberately made working conditions intolerable, (2) a reasonable person in the
employee’s position would be forced to resign, (3) the employee resigned because of the
intolerable condition and not for any other reason, and (4) the employee suffered
8
So-called because it was based on a treatise by Henry H. Perritt Jr., Workplace
Torts: Rights and Liabilities (1991).
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No. 34715-0-III
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damages as a result of being forced to resign. Barnett v. Sequim Valley Ranch, LLC, 174
Wn. App. 475, 489, 302 P.3d 500 (2013).
When the hybrid claim is asserted, the elements of a constructive discharge claim
supplant the second element of the wrongful termination in violation of a public policy
claim.9 The first element of the tort claim applies, although it is modified to address
whether the intolerable condition that led the employee to resign contravened a clear
mandate of public policy. All four elements of a constructive discharge claim apply.
Mr. Peiffer presented substantial evidence that the allegedly intolerable condition
that led him to resign contravened a clear mandate of public policy. The four scenarios
recognized as supporting a claim of wrongful discharge in violation of public policy are
“‘(1) where employees are fired for refusing to commit an illegal act; (2) where
employees are fired for performing a public duty or obligation, such as serving jury duty;
(3) where employees are fired for exercising a legal right or privilege, such as filing
workers' compensation claims; and (4) where employees are fired in retaliation for
9
In Wahl, the court analyzed whether the employer had an overriding justification
for discharging the employee, even though the employee had proved that she quit (she
was not fired) because of intolerable sexual harassment. The Washington Supreme
Court’s recent Martin decision holds that the after-acquired-evidence doctrine does not
apply to wrongful discharge claims, meaning that an employer’s overriding justification
is irrelevant unless it motivated a firing. Since there is no firing in a constructive
discharge case, we are satisfied that in such cases, it is unnecessary to analyze an
overriding justification element.
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reporting employer misconduct, i.e., whistle-blowing.’” Martin, 425 P.3d at 843
(quoting Gardner v. Loomis Armored, Inc., 128 Wn.2d 931, 936, 913 P.2d 377 (1996)).
The intolerable condition that led Mr. Peiffer to quit was Pro-Cut’s continuing failure to
pay the full amount of wages he was owed, in contravention of his rights under chapters
49.48 and 49.52 RCW. Those laws “indicate[ ] a strong legislative intent to assure
payment to employees of wages they have earned.” Schilling v. Radio Holdings, Inc.,
136 Wn.2d 152, 159, 961 P.2d 371 (1998).
Mr. Peiffer presented substantial evidence that Pro-Cut deliberately made working
conditions intolerable. The trial court made unchallenged findings that Mr. Peiffer
objected to the changing of his time cards on several occasions to both Mr. Sainsbury and
Mr. Silvers, and entered an unchallenged conclusion that Pro-Cut “willfully” withheld
$42,768.12 in wages owed to Mr. Peiffer. CP at 126. Mr. Peiffer presented evidence of
even more frequent objections that were “weekly to daily,” and that were daily in the last
three months of his employment. RP at 220.
Mr. Peiffer presented substantial evidence from which a trier of fact could find
that a reasonable person in his position would have been forced to quit. Continuing
complaints got him nowhere. He testified that Pro-Cut’s response was almost always,
“[I]f you don’t like it you can quit.” Id.
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Mr. Peiffer’s testimony was that the only reason he resigned his position at Pro-
Cut was because of the time card alterations and wage withholding—sufficient evidence
to establish the third element of his claim.
Finally, Mr. Peiffer presented evidence that he had difficulty finding work after
resigning his position at Pro-Cut and that he made far less money in his employment at
the time of trial than he had made as a slab saw operator for Pro-Cut. His wife testified
that he had gone from making $40,000 to $50,000 a year to making $20,000 to $25,000 a
year.
The evidence presented a prima facie case of constructive discharge in violation of
public policy. It was error to dismiss the claim as a matter of law. Mr. Peiffer is entitled
to a new trial.
V. THE TRIAL COURT’S CONCLUSION OF LAW THAT “MR. PEIFFER KNOWINGLY
SUBMITTED TO THE WITHHOLDING OF HIS WAGES” IS NOT SUPPORTED BY THE
COURT’S FINDINGS OF FACT
One of the claims on which Mr. Peiffer prevailed was a claim for a wage
withholding violation under RCW 49.52.050(2) (willfully paying a lower wage than
obligated by contract). RCW 49.52.070 provides that any employer and any officer, vice
principal or agent of an employer who violates RCW 49.52.050(1) or (2) shall be liable in
a civil action for twice the amount of the wages unlawfully withheld, “PROVIDED,
HOWEVER, That the benefits of this section shall not be available to any employee who
has knowingly submitted to such violations.”
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The trial court entered the following unchallenged findings of fact relevant to the
wage withholding violation claim:
12. Mr. Peiffer objected to Mr. Sainsbury’s changing of his time card on
several occasions, one of which resulted in a physical altercation
between him and Mr. Sainsbury.
13. On several occasions, Mr. Peiffer also objected to Mr. Silvers regarding
the changing of his time card.
14. Ultimately, Mr. Peiffer quit on June 8, 2012 after Mr. Sainsbury had
again altered his time card. Mr. Peiffer refused to return to work until
Pro-Cut paid him the full wages owed to him for the time period.
CP at 124. Based on its findings, the trial court concluded that Pro-Cut willfully withheld
Mr. Peiffer’s unpaid wages. But it also concluded that Mr. Peiffer knowingly submitted
to the withholding of his wages.
Mr. Peiffer contends the trial court’s conclusion that he knowingly submitted to
Pro-Cut’s violations is not supported by its findings. We review de novo whether a
court’s findings of fact support its conclusions of law. In re Parental Rights to K.M.M.,
186 Wn.2d 466, 477, 379 P.3d 75 (2016).
Two decisions of this court establish that to “knowingly submit” to the unlawful
withholding of wages, “the employee[ ] must have deliberately and intentionally deferred
to [the employer] the decision of whether they would ever be paid.” Chelius v. Questar
Microsystems, Inc., 107 Wn. App. 678, 682, 27 P.3d 681 (2001), accord Durand v.
HIMC Corp., 151 Wn. App. 818, 836-37, 214 P.3d 189 (2009). In both Chelius and
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No. 34715-0-III
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Durand, the employee had agreed to a deferral of wages but the courts found the
employees to have agreed to only temporary deferral; neither employee agreed to no
payment at all. Pro-Cut persuaded the trial court that this case is different because Mr.
Peiffer never agreed to any deferral—he complained pointedly enough to be told that if
he didn’t like what was happening, he could quit.
This is a valid distinction between the facts of case and those presented in Chelius
and Durand, but one that makes it clearer that Mr. Peiffer did not knowingly submit to
the withholding of his wages. One “submits” when one “bow[s] to the will or authority
of another : YIELD[S]” or “become[s] resigned : acquiesce[s] uncritically.” WEBSTER’S
supra, at 2277. As a matter of law, the trial court’s unchallenged findings that Mr.
Peiffer made clear and continuing objections to the withholding support the conclusion,
and only the conclusion, that he did not knowingly submit to the withholding. On
remand, the trial court is directed to award Mr. Peiffer double damages.
VI. THE AWARD OF ATTORNEY FEES AND COSTS IS INADEQUATELY EXPLAINED AND
MUST BE REMANDED FOR RECONSIDERATION AND THE ENTRY OF FINDINGS
“[T]he trial court must provide sufficient information concerning its fee
determination to enable meaningful appellate review.” Progressive Animal Welfare
Soc’y v. Univ. of Wash., 54 Wn. App. 180, 186, 773 P.2d 114 (1989) (PAWS ), rev’d on
other grounds, 114 Wn.2d 677, 790 P.2d 604 (1990). “[T]he absence of an adequate
record upon which to review a fee award will result in a remand of the award to the trial
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court to develop such a record.” Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632
(1998). Specifically, “[a]n award of substantially less than the amount requested should
indicate at least approximately how the court arrived at the final numbers, and explain
why discounts were applied.” Absher Constr. Co. v. Kent Sch. Dist. No. 415, 79 Wn.
App. 841, 848, 917 P.2d 1086 (1995).
The trial court was presented with a lodestar calculation of $73,395.50 in attorney
fees incurred for the services of Ms. Berry and Mr. Davis. Washington courts apply the
lodestar method to determine the starting point for reasonable attorney fees. McGreevy v.
Oregon Mut. Ins. Co., 90 Wn. App. 283, 291, 951 P.2d 798 (1998). “‘The lodestar
award is arrived at by multiplying a reasonable hourly rate by the number of hours
reasonably expended on the matter.’” Id. (emphasis omitted) (quoting Scott Fetzer Co. v.
Weeks, 122 Wn.2d 141, 149-50, 859 P.2d 1210 (1993)). The trial court evaluates
whether to adjust that amount up or down, id., but it must be a reasoned evaluation.
Since “[t]he court must limit the lodestar to hours reasonably expended, [it] should
therefore discount hours spent on unsuccessful claims, duplicated effort, or otherwise
unproductive time.” Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 597, 675
P.2d 193 (1983).
When a trial court awards significantly less attorney fees than requested, “it should
at least indicate what part of the lawyer’s work the court discounted as unnecessary or
unreasonable, how much of the lawyer’s hourly fee the court found excessive, or the
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manner by which the court reduced.” PAWS, 54 Wn. App. at 187. This generally does
not mean the trial court must include an “explicit hour-by-hour analysis of each lawyer’s
time sheets.” Id.
The trial court’s reduction of the lodestar figure without explanation other than
that it found $50,000 to be a reasonable amount requires remand. We recognize that the
judge who presided at trial has retired, and if he is unavailable to reconsider and enter
findings in support of a new award,10 the task of reviewing the record and making the
award will fall to another judge. Any new judge should consider the trial court’s relevant
findings, including the trial court’s finding that the facts presented at trial were relevant
to all the claims asserted in the matter.
Mr. Peiffer asks that as part of our remand of the attorney fee award, we direct the
trial court to apply a multiplier of 1.5. Br. of Resp’t/Cross Appellant at 50. That we will
not do. “In Washington, adjustments to the lodestar product are reserved for ‘rare’
occasions.” Berryman v. Metcalf, 177 Wn. App. 644, 665, 312 P.3d 745 (2013) (quoting
Sanders v. State, 169 Wn.2d 827, 869, 240 P.3d 120 (2010)).
[O]ccasionally a trial court will be justified in making an upward
adjustment to account for risk, particularly in cases brought to enforce
important public policies that government agencies lack the time, money, or
ability to pursue. Presumptively, however, the lodestar represents a
10
See RCW 2.08.180. To serve as a judge pro tempore, a retired judge must have
retained his or her membership in the bar. See id.
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reasonable fee. A party who seeks an upward adjustment bears the burden
of proving it is warranted by arguments rooted in the record.
Id. at 678.
Because the refusal to apply a multiplier is unexplained, preventing us from
reviewing for any abuse of discretion, Mr. Peiffer may renew his argument for a
multiplier on remand. He is entitled to argue from the trial court’s findings 27, 28, and
29.
Finally, the trial court failed to explain why it refused to award all the costs
requested by Mr. Peiffer. That, too, is remanded for reconsideration and the entry of
findings. While the trial court was not required to award travel expenses, they are a cost
that can be allowed by the court in a wage case. McConnell v. Mothers Work, Inc., 131
Wn. App. 525, 531-32, 128 P.3d 128 (2006) (RCW 49.46.090 authorizes expanded costs
“as may be allowed by the court.”).
Fees on Appeal
Mr. Peiffer requests an award of reasonable attorney fees on appeal. RAP 18.1
permits recovery of reasonable attorney fees or expenses on review if applicable law
grants that right. Mr. Peiffer relies on RCW 49.46.090, RCW 49.48.030, and RCW
49.52.070 for his request. RCW 49.46.090 provides that an employer who pays an
employee less than wages entitled to shall be liable to the employee for full amount of
wage rate, costs, and attorney fees. RCW 49.48.030 provides for reasonable attorney fees
34
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when a person successfully recovers wages owed to him or her. Additionally, RCW
49.52.070 provides civil liability for double damages in wage withholding cases along
with reasonable attorney fees and costs.
Mr. Peiffer has prevailed on appeal on every issue other than (1) Pro-Cut’s
challenge to the amount awarded to offset his increased tax liability and (2) his request
that we direct the trial court to apply a multiplier to his fee award. We award him
reasonable attorney fees and costs on appeal subject to his compliance with RAP 18.1(d).
We affirm the trial court’s rulings that the statute of limitations for Charles
Peiffer’s wage claim was tolled during the period his wage complaint was under
investigation by the Department of Labor and Industries and that Mr. Peiffer was entitled
to an award of his reasonable attorney fees and costs.
We reverse the trial court’s dismissal of Mr. Peiffer’s claim for constructive
wrongful termination in violation of public policy, reverse its award of an amount to
compensate Mr. Peiffer for an increased tax liability, reverse its finding that Mr. Peiffer
knowingly submitted to withholding of his wages, and reverse and remand the
inadequately-explained attorney fee and cost award.
We remand for a new trial on the constructive wrongful termination claim, for
reconsideration of the award of reasonable attorney fees and costs and the entry of
sufficient findings, and with directions to enter a supplemental judgment that will afford
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Mr. Peiffer double damages for his wage claim less the $8,784 tax-related amount that
was awarded in error.
WE CONCUR:
Lawrence-Berrey, C.J.
36