Argued February 11, 2004.
Daniel R. Case (of Larson Berg & Perkins PLLC ), and Toby J. Marshall (of Terrell Marshall Daudt & Willie PLLC ), for petitioner.
Karin D. Jones and James M. Shore (of Stoel Rives LLP ); and Leonard J. Feldman (of Peterson Wampold Rosato Luna Knopp ), for respondents.
Lindsay L. Halm and Joseph R. Shaeffer on behalf of Washington Employment Lawyers Association, amicus curiae.
AUTHOR: Justice Charles K. Wiggins. WE CONCUR: Chief Justice Barbara A. Madsen, Justice Susan Owens, Justice Mary E. Fairhurst, Justice Sheryl Gordon McCloud. AUTHOR: Justice Steven C. Gonzalez. WE CONCUR: Justice Charles W. Johnson, Justice Debra L. Stephens, James M. Johnson, Justice Pro Tem.
[181 Wn.2d 737] ¶ 1 We must decide in this case whether a portion of the wages paid to plaintiff Shaun LaCoursiere was rebated to his employer or its agent in violation of Washington's wage rebate act, chapter 49.52 RCW.  LaCoursiere's employer, CamWest Development Inc. (CamWest), paid LaCoursiere three discretionary bonuses during the course of his employment. Pursuant to his employment agreement, a portion of LaCoursiere's bonus money was directly invested in a related
company, CamWest Managers LLC (the LLC). When CamWest terminated LaCoursiere's employment before the investment fully vested, LaCoursiere lost a portion of his investment in the LLC. We affirm the Court of Appeals' dismissal of LaCoursiere's claim. Even though the bonuses constituted " wages," there was no rebate of those wages because LaCoursiere's unvested interest reverted to the LLC and not to LaCoursiere's employer, CamWest. However, we reverse the award of attorney fees to CamWest because LaCoursiere's claim is grounded in the wage rebate act (WRA), under which reasonable attorney fees and costs are available only to prevailing employees.
[181 Wn.2d 738] FACTS
¶ 2 CamWest specializes in residential construction. CamWest uses its related company, the LLC, to finance building projects. It is the sole business of the LLC to loan money to CamWest. Eric Campbell is the founder and president of CamWest and also the manager of the LLC.
¶ 3 In 2003 CamWest hired Shaun LaCoursiere as an assistant project manager. In 2005 LaCoursiere accepted a promotion to project manager. As part of this promotion, LaCoursiere voluntarily signed both an employment agreement (governing his employment and pay) and an LLC agreement (governing his participation in a profit sharing plan).
¶ 4 The employment agreement provided tat in addition to LaCoursiere's annual salary, LaCoursiere may receive a discretionary bonus. If CamWest decided to issue a bonus, the bonuses were based on net profits from individual projects that LaCoursiere worked on and LaCoursiere's performance as a manager. CamWest would be free to weigh each of the work performance criteria differently as long as it evaluated all project managers using the same standards and gave each manager a point score (100 points being the maximum score). After CamWest calculated the bonus, the employment agreement provided that after taxes, 44 percent of the bonus would be distributed to LaCoursiere and the remaining 56 percent would be distributed directly to the LLC (as part of the LLC bonus structure). Lastly, the employment agreement contained an attorney fee provision, which mandated that the prevailing party in any legal dispute arising under the agreement would be entitled to attorney fees and costs.
¶ 5 Upon his first capital contribution on May 15, 2006, LaCoursiere signed the LLC agreement and became a member in the LLC. Under the LLC agreement, the portion of LaCoursiere's bonus that went to the LLC served as [181 Wn.2d 739] capital to be lent to CamWest. In return, he received one " unit" of membership in the LLC for every dollar paid into the LLC and annual interest payments based on his relative ownership in the LLC as compared to other members. The LLC members accrue 20 percent of a full membership interest annually until they fully vest as members.
¶ 6 The LLC agreement also provided that if CamWest terminated LaCoursiere for cause, his interest in the LLC would be immediately sold. Upon sale, LaCoursiere would be entitled to the fair market value of the LLC divided by the total number of units held by the members as of the date of the fair market valuation, multiplied by the percentage of the member's vesting in the LLC. In other words, if LaCoursiere was 60 percent vested, he would receive 60 percent of his proportional interest in the LLC. The LLC agreement further provided that in the event of a sale, Eric Campbell, the founder and president of CamWest, would have the first right to purchase the units and CamWest the second right to purchase. Any remaining units " shall be purchased by all of the Members on a pro rata basis."
¶ 7 In his first year as a manager, CamWest paid LaCoursiere an after-tax bonus of $ 80,217.05, with $ 49,961.80 of that bonus distributed directly to the LLC. The full details of LaCoursiere's net, after-tax bonuses are detailed below:
Year of Bonus
Portion Paid to LaCoursiere
Portion Paid to the LLC
LaCoursiere also received three yearly interest payments from the LLC, totaling $ 16,468.
¶ 8 The construction industry took a downturn in 2008, and CamWest demoted LaCoursiere to senior laborer and reduced his salary on December 12, 2008. Then, on March 6, [181 Wn.2d 740] 2009, CamWest terminated LaCoursiere due to his consistent tardiness. At this point, LaCoursiere's membership interest in the LLC was 60 percent vested.
¶ 9 Over the next eight months, LaCoursiere received payments for his 60 percent vested membership interest; before the final payout, he sued CamWest under the WRA. LaCoursiere argued that the profit sharing plan was a rebate under the WRA because the bonuses were " wages" once they were paid and the plan was really a mechanism for CamWest to divert some of those wages back to itself. He sought statutory double damages of $ 323,387.14 plus costs and attorney fees.
¶ 10 The trial court granted summary judgment in favor of CamWest but denied CamWest's motion for attorney fees and costs. The Court of Appeals affirmed the summary judgment order, holding that (1) the bonuses were not wages, (2) the bonuses were not rebated, and (3) LaCoursiere was not entitled to relief under RCW 49.52.070 because he knowingly submitted to alleged violations of the WRA. LaCoursiere v. CamWest Dev., Inc., 172 Wn.App. 142, 151-53, 289 P.3d 683 (2012). Additionally, the Court of Appeals reversed the ...