6 Reasons Why Claims for Improper Pay Deductions Do Not Depend on Underlying Employer-Worker Contract

We have been seeing more and more lawsuits, in which workers assert that the company has violated the Pennsylvania Wage Payment and Collection Law (“PWPCL”) by making improper “deductions” from their pay. The company often responds by arguing that, as a matter of law, the PWPCL claim must fail unless the worker can demonstrate a preexisting contractual right to the wages that were the subject of the deduction. This argument is predicated on the notion that a worker’s PWPCL rights always are defined by and limited to her contractual rights. As discussed below, this proposition is incorrect both as a general matter and, more specifically, in the context of a PWPCL wage deduction case.

First, the PWPCL’s text contains no language requiring – or even suggesting – that wages owed must be based on a contract or agreement. See generally 43 P.S. §§ 260.1, et seq.

Second, the PWPCL’s text flatly contradicts a rule that wages owed must be based on a formal contract. In particular, the PWPCL states: “No provision of this act shall in any way be contravened or set aside by private agreement.” 43 P.S. § 260.7. As Judge Wettick has observed, this provision reaches “any contractual provisions that interfere with enforcement of the legislation” and prevent courts from enforcing written agreements “that make it more difficult for workers to enforce their statutory rights.” Watson v. Prestige Delivery Systems, Inc., 27 Pa. D. & C. 5th 449, 456 (Pa. C.C.P., Allegheny Cty. Feb. 7, 2013) (emphasis supplied). This statutory mandate – that PWPCL rights cannot “be contravened or set aside by private agreement” – cannot be reconciled with the false argument that workers’ PWPCL rights are defined exclusively by private agreements. Indeed, the whole point of PWPCL § 260.7 is to create a rule that prohibits private agreements from dictating the parameters of a worker’s PWPCL rights.

Third, the caselaw contradicts any bright-line rule that PWPCL claims cannot extend beyond a contract between the worker and the company. In Lugo v. Farmers Pride, Inc., 967 A.2d 963 (Pa. Super. 2009), the Superior Court held that a class of poultry workers could assert PWPCL claims that were predicated entirely on the employer’s violation of statutory minimum wage and overtime laws. See id. at 969. The Lugo decision contains no indication or suggestion that these at-will poultry workers had any employment contract or any contractual basis for their PWPCL claims. See id. Thus, as Judge Rufe has observed: “Lugo adopts a broader interpretation of the WPCL as a vehicle for employees to recover unpaid wages, regardless of the source of their employer’s obligation to pay the wages.” Moser v. Papadopoulos, 2011 U.S. Dist. LEXIS 64716, *12 (E.D. Pa. June 15, 2011). Other judges agree. See Galloway v. George Junior Republic, 2013 U.S. Dist. LEXIS 134014, *43-44 (W.D. Pa. Sept. 19, 2013) (Mitchell, M.J.); Hilvey v. Allis-Chalmers Energy, Inc., 2013 U.S. Dist. LEXIS 80800, *8-9 (W.D. Pa. June 10, 2013) (Fischer, J.); Turner v. Mercy Health System, 2010 Phila. Ct. Com. Pl. LEXIS 146, *13-14 (Pa. C.C.P., Phila. Cty. Mar. 10, 2010) (Fox, J.).

Fourth, the PWPCL’s wage deduction regulation contradicts any rule that PWPCL claims require a contract or agreement between the plaintiff and defendant. At almost every turn, the regulation requires particular categories of deductions to be “authorized in writing” in order to be legal. See 34 Pa. Code §§ 9.1(2)-(7), (10)-(13). Thus, with respect to these deductions, a PWPCL violation arises if the deductions are not authorized in writing, a reality that cannot be reconciled with the false argument that PWPCL wrongful deduction claims must be predicated on the existence of contract. Indeed, the regulatory language commands the opposite: it is the absence of an agreement that triggers the PWPCL violation. See id.[2]

Fifth, the PWPCL’s wage deduction regulation contains other requirements that further contradict any notion that PWPCL claims must be defined by contract. Most significantly, even if an agreement is reached between the plaintiff and defendant regarding a particular deduction, the PWPCL is still violated if the deduction is not “for the convenience of employees.” Id. at § 9.1. This requirement exists because the regulators “would not have intended to give employers a free pass as long as the job-seeking worker would sign a piece of paper authorizing a deduction.” Watson, 27 Pa. D. & C. 5th at 465.

Sixth, even though Plaintiff’s PWPCL claim is expressly based on Ressler v. Jones Motor Co., Inc., 487 A.2d 424, 427-29 (Pa. Super. 1985), see Am. Cpl. (Doc. 18) at ¶ 69, DIRECTV entirely ignores the decision and the rule it creates. Ressler explains that, in order to be permissible, wage deductions must either (i) fall within one of 12 categories of authorized deductions described at 34 Pa. Code § 9.1(1)-(12) or (ii) be covered by the “catch-all” provision described at 34 Pa. Code § 9.1(13). See Ressler, 487 A.2d at 427-28. Moreover, the catch-all provision is very narrow. Under that provision, a deduction “is unlawful absent a showing of Department of Labor & Industry approval and written authorizations by employees.” Id. at 429. Ressler’s rule cannot be reconciled with the false argument that PWPCL wage deduction claim must necessarily stem from a contract. In fact, like the deduction regulation itself, Ressler says the opposite: it is the absence of an agreement that triggers the violation. (Moreover, even if there is an agreement, the deduction still is illegal absent L&I authorization.)

In sum, the argument that the worker cannot bring a PWPCL claim in the absence of a contract between her and the company cannot be reconciled with statutory text, regulatory text, or existing caselaw.

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