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Sornsin v. Scout Media, Inc.
Court of Appeals of Washington, Division 1
October 14, 2019
WILLIAM SORNSIN, an individual, MARC T. BECK, an individual, ROBERT GOREE, an individual, AARTI VARMA, an individual, EVAN W. LEWIS, an individual, BENJAMIN G. JOLDERSMA, an individual, BRIAN N. KU, an individual, DAMIEN JOLDERSMA, an individual, DONALD J. CLORE, an individual, JOSEPH C. WRIGHT, an individual, Appellants,
SCOUT MEDIA, INC., a Delaware corporation, CRAIG and JANE DOE MALLITZ, and their marital community, CRAIG AMAZEEN, an individual, JOE and JANE DOE ROBINSON, and their marital community; TAMMER and JANE DOE FAHMY, and their marital community, PILOT GROUP GP, LLC, a Delaware corporation, and JANE and JOHN DOES 1 through 8, Respondents.
former employees of Scout Media Inc. appeal the trial
court's summary dismissal of their failure to pay wages
claim. They claim an affirmative statutory entitlement to
payment for accrued paid time off (PTO) that they did not use
before they voluntarily quit. Because they have no statutory
right to payment and do not claim a contractual right, we
10, 2016, many members of the technology team of Scout Media
Inc., including appellants, resigned at the same time without
prior notice. The parties agree that Scout Media paid
appellants all salary earned as of their date of resignation
and did not pay appellants for their accrued and unused PTO.
Scout's employee manual addresses "PTO Pay Upon
Termination." It states, in relevant part,
"Employees will be paid out 70% of PTO they have accrued
at employment end. . . . Scout reserves the right to withhold
any and all PTO time if an employee neglects to give a two
week notice of termination regardless of position or length
early December 2016, Scout Media filed Chapter 11 bankruptcy
proceedings. Later that month, appellants filed a
lawsuit against Scout Media, Scout Media's former
president and former directors, and Pilot Group GP LLC, a
former investor in Scout Media's parent company (together
Scout), claiming failure to pay wages and unjust enrichment.
Appellants later dismissed their claim of unjust enrichment
and their claim against Pilot Group. Both parties filed
motions for summary judgment. The court denied
appellants' motion and granted Scout's motion.
court reviews an order granting summary judgment de novo and
performs the same inquiry as the trial court. It considers all
facts and reasonable inferences in the light most favorable
to the nonmoving party. And it affirms summary judgment only
when the evidence presented demonstrates no genuine issue of
material fact and the moving party is entitled to judgment as
a matter of law.
make three claims: (1) they have an affirmative statutory
right to payment of their accrued PTO, (2) the individual
respondents are liable to them for the balance of their
accrued PTO and for double damages because Scout's board
of directors instructed Scout not to pay them for their
accrued PTO, and (3) they are entitled to prejudgment
interest on their unpaid PTO. We disagree.
assert that they have an affirmative statutory entitlement to
payment for their accrued PTO because hours worked determines
the amount of accrued PTO, placing PTO within the definition
of "wages" under former RCW 49.46.010(2) (2011).
Scout responds that an employee's right to PTO is only
rely on cases where Washington courts have looked to former
RCW 49.46.010(2)'s definition of "wages" to
define "wages" in other statutory
provisions. RCW 49.46.010(7), formerly RCW
49.46.010(2),  defines "wages" as
"compensation due to an employee by reason of
employment." Appellants assert that McGinnity v.
AutoNation, Inc. shows that unpaid vacation benefits are
wages under this definition and Naches Valley School
District No. JT3 v. Cruzen shows that a sick leave cash-out
represents wages. These cases do not establish an affirmative
statutory entitlement to payment for accrued PTO for two
each case examined whether the contested benefit was
"wages" within the meaning of RCW 49.48.030, a fee
shifting statute allowing an employee to recover attorney
fees in any action in which the employee successfully
recovers wages or salary owed to him. RCW 49.48.030 is a remedial
statute that must be construed liberally in favor of the
employee. McGinnity's and
Cruzen's characterization of unpaid vacation and
sick leave as wages is specific to this remedial attorney
fees statute. It is not at issue here.
the contested benefits were contractual, not statutory. In
McGinnity, plaintiffs prevailed on their breach of
contract claim for loss of vacation benefits. And in
Cruzen, the language of the collective bargaining
agreement (CBA) at issue required that the school district
pay teachers for their sick leave accrued for the contract
period. Neither case involved failure to pay a
statutorily required amount, like a minimum wage or overtime.
appellants note a statement in Hisle v. Todd Pacific
Shipyards Corp. that RCW 49.46.010(7)'s definition
of "wages" includes payments that are "tied to
hours worked." But our Supreme Court cited former RCW
49.46.010(2)'s definition of "wages" only as
context to explain that the Washington Minimum Wage Act
(MWA) prohibits employees and employers from
bargaining collectively to establish wages or other
conditions less than the statutory minimum but does not
otherwise restrict their freedom to bargain. The court
ultimately held that the CBA provision for a retroactive
payment, tied to hours worked, was subject to the overtime
provisions of the MWA.Hisle does not concern
accrued PTO or a statutory right to PTO. Instead, it involves
a contractual wage entitlement to which the ...