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Weil v. Metal Technologies, Inc.

United States District Court, S.D. Indiana, Terre Haute Division

November 6, 2019

Brian A. Weil and Melissa D. Fulk, individually and on behalf of others similarly situated, Plaintiffs,
v.
Metal Technologies, Inc., Defendant.

          ENTRY

          Hon. Jane Magnus-Stinson, Chief Judge

         On May 29, 2019, this matter was remanded from the Seventh Circuit Court of Appeals. [Filing No. 435 at 3.] The Seventh Circuit instructed this Court to determine whether the May 1, 2019 amendment to Indiana Code § 22-2-6-2(b) can be applied retroactively to the Plaintiff Class's wage-deduction claims; and, if so, whether this Court's June 13, 2018 determination regarding attorneys' fees and costs should be revised. [Filing No. 435 at 10.] These issues are fully-briefed by the parties and are ripe for the Court's decision.

         I.

         Factual Background

         The relevant part of Plaintiffs' action is the claim based on I.C. § 22-2-6-2, which provides that an employee's wages can be deducted and assigned if such assignment is: (1) in writing; (2) signed by the employee; (3) by its terms, revocable by the employee at any time; and, (4) agreed to by the employer in writing. I.C. § 22-2-6-2(a). This statute also provides that a wage assignment may be made for certain purposes found in subsection (b) of the statute. As of July 1, 2015, one of the permissible uses for a wage deduction and assignment was “[t]he purchase of uniforms and equipment necessary to fulfill the duties of employment. . . .” I.C. § 22-2-6-2(b)(14).

         Plaintiffs filed this action seeking, among other things, damages for violation of I.C. § 22-2-6-2. Specifically, Plaintiff Brian A. Weil, individually, and the Plaintiff Class alleged that their employer, Metal Technologies, Inc. (“Metal Technologies”), impermissibly made deductions from their wages to pay for the rental of uniforms. From January 20, 2013 through April 10, 2016, Metal Technologies used a certain form for this wage assignment, and that form did not include the required language indicating that the wage assignment agreement was revocable by an employee at any time upon written notice to the employer. [Filing No. 395 at 3-4.] Metal Technologies conceded that this omission of the revocation language on the wage assignment form was a violation of I.C. § 22-2-6-2, [Filing No. 395 at 3-4], and the parties stipulated to the amount of damages to which Mr. Weil and the Plaintiff Class were entitled, [Filing No. 395 at 11]. The Court accepted the parties' stipulation, with a slight modification, finding that Metal Technologies owed the Plaintiff Class $31, 039.96 for improper wage deductions. [Filing No. 395 at 11.] The Court then trebled those damages, by stipulation of the parties, making the total amount of damages owed to the Plaintiff Class for wage deductions $93, 152.58. [Filing No. 395 at 11.] The parties also stipulated that Metal Technologies deducted a total of $43.10 from Mr. Weil's wages for uniform rental, and the Court trebled that amount and found that Mr. Weil was owed $129.30 in damages for the improper deduction of wages for uniform rental. [Filing No. 380 at 4; Filing No. 395 at 12.]

         After April 10, 2016, Metal Technologies amended the wage assignment form, adding the required revocation language. [Filing No. 395 at 4.] Using this amended form, Metal Technologies continued to deduct wages for uniform rental from employees that chose to rent their uniforms. [Filing No. 395 at 12.] Although the wage assignment form had been corrected, Plaintiffs argued at trial that the wage deduction uniform rental was still unlawful because uniform rental was not one of the permissible uses listed in I.C. § 22-2-6-2(b). [Filing No. 395 at 12.] As noted above, at that time, one of the permissible uses for a wage assignment was “[t]he purchase of uniforms and equipment necessary to fulfill the duties of employment. . . .” I.C. 22-2-6-2(b)(14). Plaintiffs argued that “purchase” and “rental” are not synonymous, and uniform rental is not a permissible use of a wage assignment, and is in violation of wage assignment statute. [Filing No. 395 at 12.] On the other hand, Metal Technologies argued that “rental” is synonymous with “purchase, ” and therefore the wage deduction was permissible because the employees agreed to such wage assignment. [Filing No. 395 at 12.]

         Following a bench trial, the Court concluded that although “purchase” was listed as a permissible use in I.C. § 22-2-6-2(b), “rental” was not listed. [Filing No. 395 at 12.] The Court disagreed with Metal Technologies' reading of the statute, reasoning that “[i]n ordinary usage, the terms purchase and rental are not used synonymously.” [Filing No. 415 at 13.] The Court concluded that the wage deductions for uniform rental were in violation of the wage assignment statute, and it granted the Plaintiff Class $8, 102.04 in damages for the deductions made using the revised wage assignment form, an amount that was stipulated to by the parties. [Filing No. 415 at 7.] On June 13, 2019, the Court awarded Plaintiffs $99, 229.58 in attorneys' fees for the wage deduction claims. [Filing No. 415 at 17.]

         The parties filed cross-appeals on several issues, including the Court's interpretation and application of I.C. § 22-2-6-2(b)(14). [Filing No. 421; Filing No. 426]. Oral argument at the Seventh Circuit was held on January 18, 2019. [Filing No. 435 at 4.] After oral argument, on May 1, 2019, the Indiana legislature amended the statute to explicitly allow wage deductions for the rental of uniforms, and the legislature made this amendment retroactive. [Filing No. 435 at 5; I.C. § 22-2-6-2(b)(14).] As of May 1, 2019, I.C. § 22-2-6-2(b)(14) now provides: “A wage assignment under this section may be made for the purpose of paying [for] . . . (14) [t]he purchase, rental, or use of uniforms, shirts, pants, or other job-related clothing. . . .” I.C. § 22-2-6-2(b)(14) (emphasis added).

         On May 29, 2019, the Seventh Circuit Court of Appeals entered its opinion affirming in part and vacating in part this Court's decision. [Filing No. 435 at 3.] The Seventh Circuit stated,

If the law remained as it stood on the day that the case was argued, we would affirm the district court across the board. After argument, however, the Indiana legislature introduced a wrinkle: it amended its wage-deduction law to authorize withholding for uniform rentals, and it made that amendment retroactive. Given this turn of events, we affirm the district court's decertification order but vacate the judgment and remand the case for the district court to reconsider the wage-deduction claim in light of the new law. That will likely also require the district court to recalculate attorneys' fees and costs.

[Filing No. 435 at 5.]

         Based on the Seventh Circuit's opinion, the Court ordered the parties to submit briefs on the issues of whether the amended law could be applied retroactively to the Plaintiff Class's wage-deduction claim and, if so, whether the Court's award of attorneys' fees and costs needed to be revised. [Filing No. 435 at 10.] These issues are now ripe for the Court's review.

         II.

         Parties' Arguments

         In Plaintiffs' opening brief on these issues, Plaintiffs argue that the amendment to I.C. § 22-2-6-2 cannot be applied retroactively because that would deprive them of their “legally vested right in their earned wages” and would violate the United States Constitution's and Indiana Constitution's prohibitions against ex post facto laws. [Filing No. 442 at 2.] Plaintiffs argue that the $8, 102.04 part of the judgment is earned wages and, if the amended statute is applied retroactively and those damages are taken away, it will amount to an unconstitutional taking. [Filing No. 442 at 3; Filing No. 442 at 6.] Plaintiffs argue that their at-will employment constitutes a contract and, therefore, retroactive application of the new law would impair the parties' contract obligations because it would release Metal Technologies of its obligation to pay its employees their earned wages. [Filing No. 442 at 3.] Plaintiffs also argue that the new law amounts to a bill of attainder and an ex post facto law because it is clear that the Indiana legislature was aware of the judgment in this case and it was enacting the new law to “undo this judgement.” [Filing No. 442 at 7-8.] Plaintiffs also argue that there would be significant consequences if the Court applies the amendment retroactively, including the necessity for extensive discovery and an entirely new trial, because Metal Technologies was impermissibly “taking deductions for uniform costs that were in excess of 5% of an employee's disposable earnings, ” which is unlawful. [Filing No. 442 at 8-9.] Finally, Plaintiffs argue that the amount of attorneys' fees and costs should be increased because: (1) Plaintiffs have incurred additional attorneys' fees and costs due to the continued litigation of this ...


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