PER CURIAM.
Plaintiff, Mark H. Foshee, filed suit against Georgia Gulf Chemical & Vinyls, L.L.C. ("Georgia Gulf") seeking to recover certain profit-sharing distributions, as well as penalties and attorney fees. The district court rendered partial summary judgment in favor of Georgia Gulf on the issue of penalties and attorney fees, and the matter proceeded to trial on the merits. At the conclusion of trial, the district court awarded plaintiff $17,263.35 in profit sharing, with legal interest from date of demand. On appeal, the court of appeal affirmed the district court's judgment granting partial summary judgment in favor of Georgia Gulf on the issue of penalties and attorney fees, but reversed the district court's judgment awarding plaintiff $17,263.35 in profit sharing. Foshee v. Georgia Gulf Chemicals and Vinyls, L.L.C., 09-0530 (La.App. 1 Cir. 10/21/09), 24 So.3d 1029. Upon plaintiff's application, we granted certiorari to consider this ruling. Foshee v. Georgia Gulf Chemicals and Vinyls, L.L.C., 09-2477 (La.2/26/10), 28 So.3d 263.
After hearing oral arguments and reviewing the record, we conclude there is no error in the judgment of the court of appeal. Accordingly, we affirm that judgment.
KNOLL, J., dissents and assigns reasons.
WEIMER, J., dissents.
CIACCIO, Justice ad hoc, dissents for the reasons assigned by KNOLL, J.
KNOLL, J., dissenting.
I respectfully dissent. Plaintiff Mark Foshee met all stated requirements to participate in Georgia Gulf's 2004 profit sharing plan, and Georgia Gulf's decision to fire him in 2005 does not give it license to retroactively take away a bonus he had already earned. Moreover, the court of appeal opinion and our recall of the writ do not give proper deference to the credibility and factual findings of the trial court, which found Foshee's performance as a Georgia Gulf employee acceptable. I would therefore reverse the appellate court ruling and enter judgment for plaintiff.
The basic requirements for participating in the Georgia Gulf profit sharing plan were set forth in a three-page Georgia Gulf brochure and a letter to Foshee dated May 7, 2004. These documents set forth the three basic requirements for earning a share of the profit plan: (1) the employee
Georgia Gulf introduced a document titled "Profit Sharing Program Description and Administrative Process," which it claims gives its managers permission to reduce a bonus payout based on performance. This document makes no part of the official bonus plan documents and is irrelevant. It is undisputed that this document was not disseminated to Georgia Gulf non-managerial employees, and Foshee was never given a copy of the document. Georgia Gulf cannot provide its employees with one set of plan documents, then secretly disseminate a separate, more restrictive set of rules which it does not provide to its employees.
Moreover, when asked during discovery to produce a "full and complete copy of the Ga Gulf Employee Profit Sharing Plan," Georgia Gulf did not provide a copy of the "Profit Sharing Program Description and Administrative Process." This admits this document made no part of the profit sharing plan governing documents.
I have carefully reviewed both the May 7, 2004 letter and the profit sharing plan brochure. Neither document permits Georgia Gulf to unilaterally reduce an employee's bonus award based on individual poor performance. Highly significantly, the May 7, 2004 letter tells Foshee "[y]ou have been awarded a total of 10,215 Profit Sharing points for 2004." (Emphasis added). The letter does not say that Foshee "may" be awarded a certain number of points, contingent on his manager's belief that he performed his job adequately. This is confirmed by the brochure, which states that an employee's "[t]otal points are determined by your job function and salary level," not based on his performance at work.
The May 7, 2004 letter also states to be "eligible for a payment, you must remain an employee through December 31, 2004." Foshee continued working for Georgia Gulf past this deadline.
The Court of Appeal Opinion relies on a passage of the Georgia Gulf brochure stating the profit sharing plan "motivates employees by creating the potential for increased compensation tied directly to company operating results and individual performance." Foshee v. Georgia Gulf Chemicals & Vinyls, LLC, 09-530 (La. App. 1 Cir. 10/21/09), 24 So.2d 1029.
I disagree. The quoted passages do fairly put Foshee on notice that his bonus is not guaranteed, as the plan is expressly contingent on Georgia Gulf's success as a company: "[b]ecause profit sharing payments are based on corporate profitability, there's no guarantee that you will receive a share every year—only in years that Georgia Gulf reaches a specified profit level."
The plan documents must be strictly construed against Georgia Gulf, the party who drafted them. Civ.Code arts. 2056-57; U.S. Abatement Corp. v. Mobil Exploration & Producing U.S., 79 F.3d 393, 400 (5th Cir.1996)("Under Louisiana law, ambiguous clauses are construed against the drafter"); Kuhn v. Stan A. Plauche Real Estate Co., 249 La. 85, 185 So.2d 210, 213 (1966)(Any "ambiguity or contradiction which existed in the language of the contract must be construed against the party who prepared the contract.") If the ambiguity "arises from lack of a necessary explanation that one party should have given... the contract must be interpreted in a manner favorable to the other party." Civ.Code art. 2057.
The court of appeal ignores these well-settled rules of construction by liberally construing the plan documents in favor of Georgia Gulf. It puts the onus on Foshee to draw an inference from what are, at best, ambiguous and tangential references to his individual job performance. If Georgia Gulf wished to make profit sharing payments contingent on the employee meeting certain performance standards, it could have unambiguously stated that requirement in the plan documents.
Georgia Gulf did have an available remedy for Foshee's alleged incompetence. As an at will employee, he could have been fired at any time. If Georgia Gulf had fired him for poor performance prior to December 31, 2004, he would not have been entitled to a bonus under the plan documents. But Georgia Gulf did not fire him in 2004, at the time of his alleged poor performance; it waited until March 2005 to do so. Georgia Gulf cannot punish Foshee for his 2005 termination by requiring him to forfeit monies he earned during 2004.
Moreover, this is directly contrary to Louisiana's unpaid wages act, which does not permit an employer to require an employee to forfeit unpaid wages for any reason, even alleged incompetence. "Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment." La. Rev.Stat. § 23:631. "No person ... shall require any of his employees to sign contracts by which the employees shall forfeit their wages if discharged before the contract is completed ... but in all such cases the employees shall be entitled to the
Even assuming Foshee's performance as an employee was a relevant factor to his bonus payments, Foshee would still be entitled to the bonus payment. After a full trial on the merits the district court found, as a matter of fact, Foshee had performed adequately enough in 2004 to earn his bonus. The trial court noted that, far from being fired in 2004, Foshee received a 3% raise in November 2004, just prior to his termination, and awarded him the full amount of his requested bonus.
The appeals court reversed and granted summary judgment for Georgia Gulf. The appeals court surprisingly found there was "no real conflict" in the testimony because "[a]ll of the Georgia Gulf witnesses testified that there were problems with Mr. Foshee's work." Foshee v. Georgia Gulf Chemicals & Vinyls, LLC, 09-0530, p. 14 (La.App. 1 Cir. 10/21/09), 24 So.3d 1029.
There is a clear conflict between the testimony of Georgia Gulf employees and the testimony of Foshee himself, who testified "that his work performance was satisfactory." Id. at * 14-15. The trial court's decision to favor Foshee's testimony over Georgia Gulf's testimony is a classic credibility call left to the discretion of the trial judge, who ruled in favor of Foshee. A trial court's ruling on a witness's credibility is entitled to "great deference" and will not be overturned "unless there is no evidence to support those findings." State v. Hunt, 09-1589 (La.12/1/09) 25 So.3d 746, 751. The appellate court erred in substituting its own credibility judgment for that of the trial court.
Louisiana law provides a clearly stated statutory public policy against the forfeiture of wages:
La.Rev.Stat. § 23:634 (emphasis added).
Foshee "actually earned" his bonus payment on December 31, 2004. He was not notified of his pending termination until January 2005, and he was not terminated until March 2005. The bonus payments were earned prior to his discharge, and La.Rev.Stat. § 23:634 sets forth a clear legislative intent that such payments cannot be forfeited or rescinded for any reason. Although an employer is free to terminate
Georgia Gulf argues the bonus payment is not "wages actually earned" at the time of Foshee's termination because it is contingent and therefore uncertain. I disagree. This Court has held the accrued benefits of a employee profit sharing plan are "earned income—property within legal contemplation." T.L. James & Co. v. Montgomery, 332 So.2d 834, 841 (La.1976). We recognized a profit sharing plan is not, as Georgia Gulf claims, a wholly gratuitous endeavor:
Id. at 841 (Emphasis added, citations omitted).
Similarly, in Knecht v. Board of Trustees for State Colleges and Universities, 591 So.2d 690 (La.1991), we unanimously held that an employee has a "vested right" to an employment benefit when he meets the requirements set forth in the plan documents. Importantly, "nearly every state has determined, using precepts similar to our civilian principles, that when an employer promises a benefit to employees, and employees accept by their actions in meeting the conditions, the result is not a mere gratuity or illusory promise but a vested right in the employee to the promised benefit." Id. at 695 (collecting cases). Foshee reasonably relied upon the statements made in the plan documents as an inducement to remain with Georgia Gulf. "A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying." Civ. Code art. 1967.
In Pender v. Power Structures, Inc., 359 So.2d 1321 (La.App. 4 Cir.1978) (Lemmon, J.), the employer paid quarterly bonuses based on a profit sharing plan. It was defendant's policy that employees had to continue to work for at least 30 additional days after the end of the quarter to receive a payment. Plaintiffs were fired the day after the quarter ended, and were not paid their bonuses. Id. at 1322. The court held this policy violated the non-forfeiture provisions of La.Rev.Stat. § 23:634, and entered judgment for plaintiffs because "the bonus was part of the employee's bargained-for compensation for services rendered during this period." Id. at 1322-23. Moreover, the "public policy of this state expressed in R.S. 23:634 prohibits an employer from forfeiting such compensation when the employee works for the entire period of profits upon which the bonus was based, but does not work for the required additional 30 days." Id. at 1323. In Pender, as in the present case, the plaintiff employees were terminated for "misconduct." Id. at 1323. However, the Pender court held that alleged misconduct
Here, Georgia Gulf presented Foshee with an uncomplicated deal: if he continued to work for Georgia Gulf through December 31, 2004, and the company reached a certain profit level, he would earn a bonus. This is "an inducement to employees to remain in the service of the company" through the end of the year. T.L. James & Co. v. Montgomery, 332 So.2d 834, 841 (La.1976). Foshee upheld his end of the bargain; Georgia Gulf did not. I would reinstate the judgment of the trial court as to the unpaid wage claim.
Foshee also seeks recovery of attorneys' fees and penalties under La.Rev.Stat. § 23:631 et seq. The relevant portion of § 23:631 states:
La.Rev.Stat. § 23:632 mandates an award of penalties and attorneys' fees against employers who violate § 23:631:
The money Foshee was owed under the profit sharing plan is an amount "due under the terms of employment" under La.Rev.Stat. § 23:631. An employee becomes eligible for the payment by earning a number of points according to the Georgia Gulf system and by continuing to work for Georgia Gulf through December 31, 2004. Under the plain meaning of the phrase, Georgia Gulf's profit sharing bonuses are earned "under the terms of employment" with the company.
This holding is well-supported by the jurisprudence, as several cases broadly define unpaid wages under § 23:631 to include bonus payments, including discretionary bonuses and profit sharing plans. Penalties and attorneys' fees have been awarded to plaintiffs seeking payment of annual bonuses,
Because La.Rev.Stat. § 23:632 states that an employer who fails to timely pay unpaid wages "shall be liable" for penalties and attorneys' fees, an award of penalties and fees is not permissive but mandatory. La.Rev.Stat. § 1:3. I would therefore award Foshee his bonus under the profit sharing plan in the amount of $17,263.35; as well as statutory penalties and reasonable attorneys' fees to be determined by the district court on remand.
