Hisle v. Todd Pacific Shipyards Corp.

Fairhurst, J. In this case, we determine that Washington’s Minimum Wage Act (MWA), ch. 49.46 RCW, applies to a collective bargaining agreement (CBA) containing a onetime retroactive payment based on an hourly wage of actual hours worked, and that this lawsuit is not preempted by section 301 (§ 301) of the Labor Management Relations Act of 1947, Pub. Law No. 101, ch. 120, 61 Stat. 136 (1947) (LMRA), codified at 29 U.S.C. § 185(a), or barred by res judicata. We affirm the Court of Appeals and grant respondents costs and attorney fees. I. FACTS Petitioner, Todd Pacific Shipyards Corporation, constructs and repairs marine vessels. Respondents, Jerry L. Hisle, Michael D. Nicholas, Dale A. Riccetti, Jerry Roth, and Ron L. Shoup are employees of Todd (hereinafter collectively Hisle). Todd and Puget Sound Metal Trades Council (PSMTC), a union representing Todd’s employees, entered into a CBA covering all production, repair, and maintenance performed at Todd’s Seattle facility. In February 1996, Todd and PSMTC commenced negotiations for a CBA to succeed the one due to expire later that year. After the Todd employees rejected three different agreements proposed by Todd and the unions representing its employees,1 Todd and PSMTC referred the matter to an arbitrator. Based upon a stipulation by Todd and PSMTC, the arbitrator authorized one of the agreements that the Todd employees previously rejected.2 The agreement contained the following provision: — 858 — Wage and Fringe Increase Effective 8-1-98 $.61/hour Wage/Fringe This increase will be applied to all Schedule “A” rates listed above except Firewatch. Retroactive payments of $.60 for each non-Washington State Ferry Project attendance hour from August 1, 1996 until the execution date of the contract (less applicable employee deductions) shall be made to all non-Washington State Ferry Project employees that were actively employed on the execution date of the contract or had seniority rights as of the execution date of the contract. Clerk’s Papers (CP) at 232. Todd issued checks to eligible employees at the rate of $.60 per attendance hour3 without regard to whether the hours were regular or overtime. Two hundred Todd employees (including the named respondents in this case) then filed a complaint against PSMTC and Todd in the United States District Court seeking to nullify the CBA. Adams v. Puget Sound Metal Trades Council, AFL-CIO & Todd Pac. Shipyards Corp., No. C98-0205R (hereinafter Adams). The first cause of action asserted that PSMTC “violated membership ratification requirements of applicable union constitutions and bylaws” when it submitted to the arbitrator a CBA that the employees previously rejected, and that Todd knew or should have known that PSMTC exceeded its authority in submitting the agreement. CP at 21. The second cause of — 859 — action asserted that PSMTC (or PSMTC’s actions) breached its duty of fair representation. Todd counterclaimed, alleging that if the employees prevailed, it was entitled to repayment of all wage increases and benefits it had paid under the new CBA. Similarly, PSMTC’s answer asserted that the Todd employees were estopped from nullifying the new CBA because they had already received material benefits thereunder. PSMTC and the Todd employees signed a settlement agreement and release whereby the employees agreed to dismiss with prejudice the “Action, and all claims or other causes of action asserted therein,” CP at 140, PSMTC agreed not to ratify an agreement without the approval of Todd’s employees, and both PSMTC and Todd’s employees agreed to release “all claims, demands, liabilities, and causes of action of every kind stemming from or any way related to the claims raised in this Action.” CP at 141. In response to the settlement, Todd dismissed its counterclaim. Respondents and 877 other like-situated employees worked overtime hours during the period covered by the retroactive payment, August 1, 1996, until the execution date of the CBA. Hisle brought this action against Todd in King County Superior Court alleging that Todd’s failure to pay time and one-half for overtime hours violated the MWA and sought class certification. The parties mainly disagreed about the characterizations and/or effect of the retroactive payment. Todd argued that it and PSMTC, as the parties to the CBA, intended the retroactive payment to be a ratification inducement4 and that no overtime pay was due be — 860 — cause the MWA does not apply to a ratification inducement. Hisle argued that regardless of the retroactive payment’s characterization, the MWA overtime provisions applied to the retroactive payment as a matter of law because it was tied to hours worked. Both parties moved for summary judgment. The trial court rejected Hisle’s motions for class certification and summary judgment and granted Todd’s motion for summary judgment. It also dismissed Hisle’s lawsuit with prejudice, finding that it was preempted by § 301 of the LMRA, and barred by res judicata and the Adams settlement agreement. Hisle appealed and the Court of Appeals reversed the trial court orders on the competing summary judgment motions. Hisle v. Todd Pac. Shipyards Corp., 113 Wn. App. 401, 54 P.3d 687 (2002). The Court of Appeals found the MWA entitled Hisle to overtime pay for the retroactive period, id. at 421-26, found that the case was not preempted by § 301 of the LMRA, id. at 417-20, or barred by res judicata. Id. at 410-14. The Court of Appeals also remanded the motion for class certification and awarded Hisle attorney fees on appeal. Id. at 427, 430.5 We granted Todd’s motion for discretionary review. Hisle v. Todd Pac. Shipyards Corp., 149 Wn.2d 1017, 72 P.3d 761 (2003). We affirm the Court of Appeals on all three issues and award Hisle attorney fees. II. STANDARD OF REVIEW This court reviews summary judgment orders de novo, performing the same inquiry as the trial court. Kruse v. Hemp, 121 Wn.2d 722, 853 P.2d 1373 (1993). In conducting this inquiry, this court must view all facts and reasonable inferences in the light most favorable to the nonmoving party. City of Lakewood v. Pierce County, 144 Wn.2d 118, — 861 — 125, 30 P.3d 446 (2001). Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). “A material fact is one upon which the outcome of the litigation depends, in whole or in part.” Barrie v. Hosts of Am., Inc., 94 Wn.2d 640, 642, 618 P.2d 96 (1980). III. ANALYSIS A. The Overtime Provisions of the MWA Apply to the Retroactive Payment Contained in the CBA Signed by Todd and PSMTC Whether the MWA applies to retroactive payments contained in collective bargaining agreements is an issue of first impression in Washington. Hisle, 113 Wn. App at 429. Consistent with Washington’s status as a pioneer for protection of employee rights, Drinkwitz v. Alliant Tech-systems, 140 Wn.2d 291, 300, 996 P.2d 582 (2000), the MWA provides that “no employer shall employ any of his employees for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.” RCW 49.46.130(1). “Regular rate” is “the hourly rate at which the employee is being paid, but may not be less than the established minimum wage rate.” WAC 296--128-550. This court found that the legislature “intended to allow a broad and flexible interpretation of the term [regular rate] so long as the purposes of the Washington Minimum Wage Act are satisfied.” Inniss v. Tandy Corp., 141 Wn.2d 517, 532, 7 P.3d 807 (2000). Although employees and employers may not bargain away these minimum requirements, they are free to bargain collectively “in order to establish wages or other conditions of work in excess of the applicable minimum.” RCW 49.46.110. Wages are defined as “compensation due to an employee by reason of employment.” RCW 49.46.010(2). To support their opposing positions, both Todd and Hisle cite Minizza v. Stone Container Corp., a Fair Labor — 862 — Standards Act of 1938 (FLSA) case.6 Minizza v. Stone Container Corp. Corrugated Container Div. E. Plant, 842 F.2d 1456 (3d Cir. 1988). Todd argues that Minizza explains that the purpose of the retroactive payment supersedes the manner in which it is calculated. Pet. for Review at 10. Hisle argues that Minizza explains that payments tied to hours worked are subject to overtime requirements. Answer to Pet. for Review at 13. Minizza involved a ratification inducement of two lump-sum payments ($750 and $500). Minizza, 842 F.2d at 1458. To be eligible for the first payment, an employee had to have active employee status for three months prior to the payment. Id. To be eligible for the second payment, an employee had to have such status for six months prior to the payment. Id. Because the payments were not tied to hours worked or services rendered, the Minizza court found that the payments were not made as compensation for hours of employment which satisfied the 29 U.S.C. § 207(e)(2) exception. Id. at 1462. Therefore, overtime did not apply. Id. Minizza is not directly on point because it limited itself to its facts, id. at 1463, involved lump-sum payments, id. at 1458, and was based on 29 U.S.C. § 207(e)(2), an exception that does not exist in the MWA. Id. at 1461. However, Minizza’s dictum indicates that the overtime provisions of the MWA do apply to the retroactive payment. Id. at 1460 (“This sum can be allocated solely as compensation on an hourly basis (in which event the payment would be fully includable in the ‘regular rate’)”), id. at 1462 (“If the payments were made as compensation for hours worked or services provided, the payments would have been conditioned on a certain number of hours worked or on an amount of services provided.”). Id. We agree with Hisle and find that the retroactive payment contained in the new CBA is tied to hours worked — 863 — and, therefore, is subject to the overtime provisions of the MWA. We reject Todd’s and PSMTC’s assertion that the payment was a ratification inducement. The CBA to which they stipulated, and which the arbitrator ordered, makes no indication that the payment is a ratification inducement, lists the hourly retroactive payment increases under the heading “Wage and Fringe Increase,” and specifically ties the hourly retroactive payment to hours worked. CP at 232. But even if properly characterized as a ratification inducement, under the facts of this case, the retroactive payment is subject to the MWA overtime provisions. We affirm the Court of Appeals determination that the overtime provisions of the MWA apply to the retroactive payment. B. Section 301 of the LMRA Does Not Preempt Hisle’s Claim Section 301 of the LMRA provides federal court jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization,” and enables federal courts to establish common law to address such issues. 29 U.S.C. § 185(a); Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448, 450-51, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957). LMRA supremacy “ensure[s] uniform interpretation of collective-bargaining agreements, and thus . . . promote [s] the peaceable, consistent resolution of labor-management disputes.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 404, 108 S. Ct. 1877, 100 L. Ed. 2d 410 (1988). In furtherance of these supremacy policies, § 301 preemption occurs where the state claim “is inextricably intertwined with consideration of the terms of the labor contract,” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213, 105 S. Ct. 1904, 85 L. Ed. 2d 206 (1985), and application of state law “requires the interpretation of a collective-bargaining agreement.” Lingle, 486 U.S. at 413; see also Atchley v. Heritage Cable Vision Assocs., 101 F.3d 495, 500-02 (7th Cir. 1996) (claim based on delinquent payment of wages is preempted by § 301 of the LMRA because claim required interpretation of a CBA to determine when employer was required to pay the wage increases and bonuses). — 864 — Preemption is the exception, not the rule in Washington: In Washington, there is a strong presumption against finding preemption. Pioneer First Fed. Sav. & Loan Ass’n v. Pioneer Nat’l Bank, 98 Wn.2d 853, 659 P.2d 481 (1983). Preemption may be found only if federal law “clearly evinces a congressional intent to preempt state law”, or there is such a “ ‘direct and positive’ ” conflict “that the two acts cannot ‘be reconciled or consistently stand together’...” Pioneer, at 856-57 (quoting State v. Williams, 94 Wn.2d 531, 538, 617 P.2d 1012, 24 A.L.R. 4th 1191 (1980)). Dep’t of Labor & Indus. v. Common Carriers, Inc., 111 Wn.2d 586, 588, 762 P.2d 348 (1988). Moreover, § 301 generally does not preempt the MWA. Schneider v. Snyder’s Foods, Inc., 95 Wn. App. 399, 401, 976 P.2d 134 (1999). “[T]he general preference for arbitration is outweighed by the statutory requirements of the Minimum Wage Act and the strong public policy. . . against depriving union employees of statutory rights that undeniably would be available to nonunion employees.” Ervin v. Columbia Distrib., Inc., 84 Wn. App 882, 891, 930 P.2d 947 (1997). In Commodore v. University Mechanical Contractors, Inc., 120 Wn.2d 120, 839 P.2d 314 (1992), this court adopted a preemption model finding that “section 301 should not preempt nonnegotiable or independent negotiable claims.”7 Id. at 131. The right to overtime under the MWA is a nonnegotiable state statutory right. See RCW 49.46.110, .130(1). Therefore, consistent with our state Courts of Appeal which have consistently held that § 301 of — 865 — the LMRA does not preempt MWA claims,8 Hisle’s claim— one involving the nonnegotiable state right to overtime under the MWA—is not preempted by § 301 of the LMRA. C. Res Judicata Does Not Bar Hisle’s Claim The party asserting the defense of res judicata9 bears the burden of proof. Civil Serv. Comm’n v. City of Kelso, 137 Wn.2d 166, 172, 969 P.2d 474 (1999). Res judicata is the rule, not the exception: “ ‘The general doctrine is that the plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.’ ” Schoeman v. N.Y. Life Ins. Co., 106 Wn.2d 855, 859, 726 P.2d 1 (1986) (quoting Sayward v. Thayer, 9 Wash. 22, 24, 36 P. 966, 38 P. 137 (1894)). However, res judicata does not bar claims arising out of different causes of action, or intend “to deny the litigant his or her day in court.” Id. at 860. The threshold requirement of res judicata is a final judgment on the merits in the prior suit.10 Id. Once that threshold is met, res judicata requires sameness of subject — 866 — matter, cause of action, people and parties, and “the quality of the persons for or against whom the claim is made.” Rains v. State, 100 Wn.2d 660, 663, 674 P.2d 165 (1983). The trial court found that Adams was res judicata to Hisle’s claim. The Court of Appeals disagreed, finding that the subject matter and causes of action were not the same. We first turn to the res judicata requirement of identity of subject matter. This court has held that the same subject matter is not necessarily implicated in cases involving the same facts. See Hayes v. City of Seattle, 131 Wn.2d 706, 712, 934 P.2d 1179 (1997) (finding different subject matter in cases involving a master use permit where the initial case sought to nullify the city council decision and the second case sought damages); Mellor v. Chamberlin, 100 Wn.2d 643, 646, 673 P.2d 610 (1983) (finding different subject matter in cases involving the sale of property where the initial case sought to establish misrepresentation and the second case sought to establish a breach of the covenant of title). We find that this case involves a different subject matter than Adams. Whereas Adams concerned the procedures used to adopt the new CBA and sought to invalidate the new CBA, the current claim presumes the validity of the agreement and seeks to apply the MWA to it. Because we find that identity of subject matter does not exist, and because the res judicata test is a conjunctive one requiring satisfaction of all four elements, we do not analyze the other res judicata requirements. D. Respondents Are Entitled to Costs and Attorney Fees The remedies provision of the MWA states: Any employer who pays any employee less than wages to which such employee is entitled under or by virtue of this chapter, shall be liable to such employee affected for the full amount of such wage rate, less any amount actually paid to such em — 867 — ployee by the employer, and for costs and such reasonable attorney’s fees as may be allowed by the court. RCW 49.46.090(1) (emphasis added). RAP 18.1 addresses the procedures for requesting attorney fees and expenses. Former RAP 18.1 (2002), which was effective until September 1, 2003, caused confusion as to whether cost and fee requests asserted in the Court of Appeals continued at this court.11 Changes to RAP 18.1 effective September 1, 2003, resolved this confusion by stating that expenses and attorney fee requests made in an opening brief at the Court of Appeals continue at this court.12 Hisle requested costs and attorney fees pursuant to RAP 18.1(b) and RCW 49.46.090(1) in a February 26, 2002, motion to supplement their brief to the Court of Appeals. In its September 16, 2003, ruling, the Court of Appeals granted the motion, as well as the costs and attorney fees. Hisle, 113 Wn. App at 430. We affirm this award. At this court, Hisle requested attorney fees for preparing the answer, but did not reassert a request for costs and attorney fees. Answer to Pet. for Review at 20. Consistent with the liberal interpretation we must afford court rules, RAP 1.2(a), we find that the recent amendments to the Rules of Appellate Procedure apply and grant Hisle’s costs and attorney fees in this court. IV. CONCLUSION We affirm the Court of Appeals determination that the overtime provisions of the MWA apply to the retroactive — 868 — payment contained in the new CBA. The MWA provisions apply as a matter of law because the retroactive payment was tied to hours worked. We affirm the Court of Appeals determination that this lawsuit is not preempted by § 301 of the LMRA. As a nonnegotiable state right, overtime is not subject to federal preemption. We affirm the Court of Appeals determinátion that res judicata does not bar this lawsuit. Whereas Adams attacked the validity of the new CBA, the case at bar presumes its validity and seeks to apply the MWA overtime provisions to it. Finally, we award Hisle costs and attorney fees. Alexander, C.J., and Madsen, Ireland, and Chambers, JJ., concur. Footnotes [1] Negotiations initially occurred on a coordinated basis with Pacific Coast Metal Trades Council, another union representing the Todd employees and two other facilities. Todd and Pacific Coast proposed the first agreement rejected by the Todd employees, while Todd and PSMTC proposed the latter two agreements rejected by the Todd employees. [2] The parties and the Court of Appeals incorrectly cite one of the proposed CBAs as if it were the agreement ordered by the arbitrator. They cite: WAGE AND FRINGE INCREASE Effective upon Ratification $.60/hour Wage/Fringe Effective 8-1-98 $.61/hour Wage/Fringe Effective 7-31-99 Collective Bargaining Agreements terminates — 858 — Retroactive payments of $.60 for each non-Washington State Ferry Project attendance hour from August 1, 1996 until the execution date of the contract (less applicable employee deductions) shall be made to all non-Washington State Ferry Project employees that were actively employed on the execution date of the contract or had seniority rights as of the execution date of the contract. Clerk’s Papers (CP) at 64; Hisle v. Todd. Pac. Shipyards Corp., 113 Wn. App. 401, 421, 54 P.3d 687 (2002), review granted, 149 Wn.2d 1017, 72 P.3d 761 (2003). The pertinent language in the CBA ordered by the arbitrator is properly quoted in the main text. [3] “Attendance hour” is undisputedly defined as actual hours worked in the shipyard on something other than one of the Washington State ferries. CP at 160. [4] Tbdd supported its characterization of the payment with a declaration from Todd’s secretary and general counsel, Michael Marsh, as well as the deposition of PSMTC business representative Robert Scott. Michael Marsh declared: This payment was not a retroactive pay raise; nor was it compensation for services previously provided by the employees. The lump sum payment was over and above any wage rates or increases to the wage rates previously agreed to by the parties and exceeded any payments otherwise required by law. Although the tentative agreement refers to “Retroactive payments .. ..”, this language meant only that the lump sum payment was to be calculated in part by looking at the hours worked during a prior period of time. CP at 15. Mr. Scott testified that Todd and PSMTC agreed that overtime would not be paid on the retroactive payment. CP at 153-56. [5] Whether the class will be certified remains to be determined because Hisle did not raise the issue to this court. [6] The FLSA is persuasive authority because the MWA is based on the FLSA. Drinkwitz, 140 Wn.2d at 298. Like the MWA, the FLSA requires overtime pay of one and one-half times the regular rate for every hour worked beyond 40. 29 U.S.C. § 207(a)(1). [7] In Commodore, we explicitly rejected the preemption model that the dissent urges us to apply—a model asserting that “ ‘nonnegotiable’ [or state] rights should only be preempted when their resolution depends upon the interpretation of any express or implied term of the CBA.” Commodore, 120 Wn.2d at 129. We had the following to say about the Lingle footnote that the dissent quotes: This rather cryptic footnote, which is dicta, gives no examples to illustrate the foregoing “conceivable” situations. We are at a loss to explain or apply such rules, other than on a fact-specific, case-by-case basis. Indeed, we are unable to fashion a practicable, systematic method of evaluating state law claims under [this] model. Id. at 131. [8] Huntley v. Frito-Lay, Inc., 96 Wn. App 398, 402, 979 P.2d 488 (1999); Schneider, 95 Wn. App. at 401-02; Ervin, 84 Wn. App. at 891; United Food & Commercial Workers Union Local 1001 v. Mut. Benefit Life Ins. Co., 84 Wn. App. 47, 50, 925 P.2d 212 (1996). Although many of these cases held that MWA claims were not preempted by § 301 of the LMRA because the MWA is an independent nonnegotiable state right, we note that requiring a nonnegotiable state right to also be independent is redundant. “The [preemption] model [adopted by this court] classifies nonnegotiable state law rights — those that cannot be waived in contract — as independent of CBA’s by definition: They cannot be altered by CBA negotiations.” Commodore, 120 Wn.2d at 131. [9] Todd raised the defense of res judicata (claim preclusion), not the defense of collateral estoppel (issue preclusion). We must be vigilant in preserving the distinction between these two defenses. “The doctrine of collateral estoppel differs from res judicata in that, instead of preventing a second assertion of the same claim or cause of action, it prevents a second litigation of issues between the parties, even though a different claim or cause of action is asserted.” Seattle-First Nat’l Bank v. Kawachi, 91 Wn.2d 223, 225-26, 588 P.2d 725 (1978). [10] Although the Court of Appeals did not expressly address whether the Adams dismissal was a final adjudication on the merits, Hisle, 113 Wn. App at 410-14, — 866 — this threshold res judicata requirement is satisfied because Adams was dismissed with prejudice. Maib v. Md. Cas. Co., 17 Wn.2d 47, 52, 135 P.2d 71 (1943) (a dismissal with prejudice constitutes a final judgment on the merits). [11] Former RAP 18.1(a) (2002) stated, “[i]f applicable law grants to a party the right to recover reasonable attorney fees or expenses on review, the party must request the fees or expenses as provided in this rule, unless a statute specifies that the request is to be directed to the trial court.” Former RAP 18.1(b) (2002), stated that “[t]he party must devote a section of the brief to the request for the fees or expenses.” [12] RAP 18.1(a) was amended on September 1, 2003, to add “before either the Court of Appeals or Supreme Court,” after “expenses on review.” RAP 18.1(b) states, “[t]he party must devote a section of its opening brief to the request for the fees or expenses. Requests made at the Court of Appeals will be considered as continuing requests at the Supreme Court.” (Emphasis added.)