AmeriGlobe, LLC. v. Victor Althoff (mem. dec.) ( 2018 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be Mar 27 2018, 8:35 am
regarded as precedent or cited before any
CLERK
court except for the purpose of establishing Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Paul C. Sweeney Richard D. Trainor
Derek R. Molter Law Office of Richard D. Trainor
Ice Miller LLP Michigan City, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
AmeriGlobe, LLC, March 27, 2018
Appellant-Defendant, Court of Appeals Case No.
46A05-1708-PL-1845
v. Appeal from the LaPorte Superior
Court 2
Victor Althoff, The Honorable Richard L.
Appellee-Plaintiff. Stalbrink, Jr., Judge
Trial Court Cause No.
46D02-1303-PL-361
Mathias, Judge.
[1] AmeriGlobe, LLC (“AmeriGlobe”) appeals the judgment of the LaPorte
Superior Court in favor of Victor Althoff (“Althoff”) in Althoff’s complaint
alleging breach of an employment contract and seeking damages under the
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Indiana Wage Claims Statute. On appeal, AmeriGlobe presents three issues,
which we consolidate, reorder, and restate as the following two: (1) whether the
trial court erred in denying AmeriGlobe’s motion for summary judgment on
grounds that Althoff’s claims under the Wage Claims Statute are barred
because Althoff failed to submit his claim to the Indiana Department of Labor
until after he had already filed his complaint; and (2) whether the trial court
clearly erred in determining that AmeriGlobe breached an employment contract
with Althoff.
[2] We reverse and remand.
Facts and Procedural History
[3] The basic facts underlying this case are relatively undisputed. Althoff was a
veteran sales representative, with over thirty years of experience selling a variety
of products, including filtration bags and bulk bags.1 In the first half of 2010,
Althoff worked for a competitor of AmeriGlobe. But when he learned that the
company that he then worked for might be sold, he became concerned about his
job security and started looking for other sales positions. Althoff was familiar
with AmeriGlobe and reached out to its co-owner and president, Dan Schnaars
(“Schnaars”). Schnaars informed Althoff that the standard compensation for
AmeriGlobe sales representatives was an annual salary of $36,000 plus the
1
“Bulk bags” are large bags made from the plastic polypropylene and are used to transport and store material
in large quantities, e.g., salt, sand, or concrete mix.
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company standard commission of 2% of “list” or base price, plus 30% of
“overage,” i.e., any price the sales representative could get over the list price.2
This scheme incentivized sales representatives to obtain a selling price higher
than the list price.
[4] In recognition of Althoff’s experience, he and Schnaars came to a different
agreement regarding Althoff’s compensation. Specifically, they agreed that
Althoff would initially earn $6,800 per month (instead of the standard $3,000)
and earn only one-half of the company standard commission, i.e., 1% of list
price plus 15% of overage.3 They also agreed that Althoff’s salary would be
reduced by $200 per month starting June 1, 2011, until it eventually reached
$3,000. Also starting June 1, 2011, Althoff would start earning the company
standard commission instead of one-half of the standard commission. This
would allow Althoff to earn a more comfortable salary as he built up his sales.
To memorialize this arrangement, the parties drafted a one-page written
agreement which reads as follows:
August 23, 2010
Employment Agreement
Between
Victor Althoff
And
2
Under this commission structure, for example, if the list price of a bag was $15 and the sales representative
sold the bag to a customer for $20, then he would earn a commission of 2% of $15 ($0.30) plus 30% of the
$5.00 overage ($1.50), for a total commission of $1.80 per bag.
3
Under this commission structure, for example, if the list price of a bag was $15 and the sales representative
sold the bag to a customer for $20, then he would earn a commission of 1% of $15 ($0.15) plus 15% of the $5
overage ($.75), for a total commission of $.90 per bag.
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AmeriGlobe, LLC
Employment Start Date: August 23, 2010
Position: Territorial Sales Representative
Territory: As defined from time to time. Initial
territory includes Upper Illinois,
Wisconsin, Minnesota, North and
South Dakota. (Territories are not
exclusive and will vary over time[.])
Compensation Salary Adjustable Salary and Commission.
From August 23, 2010 to May 30,
2011, salary will be $6800 per
month with first month pro-rated
according to days employed.
Starting on June 1, 2011 salary will
be adjusted downward by $200 per
month until standard salary of
$36,000 per year is reached.
Commissions From August 23, 2010 until June 1,
2011 commissions will be 50% of
company standard. Commissions
will be paid monthly according to
company standards.
Benefits Company Standard Health
Insurance benefits[.]
Vacation One week after January 1, 2011.
One more week after August 23,
2011. Starting January 1, 2012, Victor
is eligible for 2 weeks per year.
Expenses 100% reimbursement for approved
travel. Shared expenses based on
company standards once $110,000
per month in sales has been
achieved for 3 consecutive months.
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Equipment Company provides laptop and
printer.
Car Company provides $350 per month
in car allowance.
Exclusivity AmeriGlobe will be the only source
of income unless otherwise
approved in writing.
Term of Employment At the discretion of AmeriGlobe
and Victor’s satisfaction.
Appellant’s App. Vol. 2, p. 49. Although neither party signed this written
memorialization, both parties concede that this document accurately represents
their agreement.
[5] At the time Althoff was hired, in addition to selling bulk bags, AmeriGlobe was
also preparing to start marketing a new product known as the TrapBag.
Inventor Buzz Wade (“Wade”) had contacted AmeriGlobe in May of 2010 to
discuss the possibility of AmeriGlobe manufacturing and selling the soon-to-be-
patented TrapBag as a large-scale flood mitigation solution. Traditional sand
bags contain between 50 to 100 pounds of sand and are stacked to help hold
back flood waters, but have problems with leakage between the bags. In
contrast, TrapBags are five-sided bags that have thirty cells each and are sewn
together to form contiguous sections, usually 100 feet long. Each 100-foot
section of TrapBags can hold up to 200,000 pounds of sand and can be linked
together to form miles of contiguous flood barriers. Before being filled, a 100-
foot section of TrapBags can be compressed into just 6 feet and unfolded like an
accordion as it is deployed and filled with sand or other filler.
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[6] The following image of the TrapBag system is taken from the patent
application:
See Ex. Vol. 3, Defendant’s Ex. Y p. 3.
[7] Althoff first saw the TrapBag in October 2010, when he went to AmeriGlobe’s
headquarters in Lafayette, Louisiana for training. There, he saw a product
demonstration. Althoff began to sell bulk bags the following month and also
began to look for opportunities to sell the TrapBag. Althoff attended trade
shows to find potential buyers for the TrapBag. On February 14, 2011, Althoff
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received an order of TrapBags from the City of Fargo, North Dakota in the
amount of $860,038.72. This was AmeriGlobe’s first sale of the TrapBag.
[8] On February 17, 2011, Schnaars telephoned Althoff and told him that the
commission for the TrapBag sales would be different than for bulk bags.
Specifically, Schnaars stated that AmeriGlobe would pay sales representatives a
flat commission on sales of the TrapBag instead of the company standard of 2%
of list and 30% of overage, or in Althoff’s case, one half of the company
standard. AmeriGlobe paid a 5% flat commission to Althoff for the Fargo sale,
which amounted to $43,001.19. This was actually higher than the amount
Althoff would have received under the one-half company standard commission
rate for sales of bulk bags he claimed to be entitled to. Indeed, Althoff admitted
that, under the one-half company standard commission rate, his commissions
for the Fargo sale would have been $38,818.56.4
[9] When Althoff received his commission statement covering the Fargo sale, he
called Schnaars to complain. Schnaars informed him that AmeriGlobe was
going to use a flat commission rate for the sale of TrapBags. For the first two
4
Althoff sold Fargo 21,120 feet of four-foot TrapBags for $490,083.72, or $23.20 per foot. The list price for
the four-foot TrapBags was $18 per foot. Thus, under the one-half company standard commission rate,
Althoff would have earned 1% of the list price of $18 per foot, or $3,801.60 ($18 × 21,120 feet = $380,160 ×
1% = $3,801.60), plus 15% of the overage of $5.20 per foot, or $16,473.60 ($5.20 × 21,120 = $109,824 × 15%
= $16,473.60) for a commission of $20,275.20 for the four-foot bags. See Tr. Vol. 2 p. 161–62. Althoff also
sold Fargo 10,560 feet of six-foot TrapBags for $370,000, or $35.04 per foot. The list price for the six-foot
TrapBags was $25, for an overage of $10.04 per foot. Under the one-half company standard commission,
Althoff would have earned 1% of the list price of $25 per foot, or $2,640 ($25 × 10,560 = $264,000 × 1% =
$2,640), plus 15% of the overage of $10.04, or $15,903.36 ($10.04 × 10,560 = $106,022.40 × 15% =
$15,903.36) for a commission of $18,543.36 for the six-foot bags. See id. Thus, under the one-half company
standard, Althoff would have earned a commission of $38,818.56.
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sales, the flat rate was 5%, and for most others, it was 4%. Schnaars explained
that there were two main reasons for not using the company standard
commission for the TrapBag. First, the TrapBag was used in emergency
situations, and AmeriGlobe did not want to have in place a commission that
encouraged its sales representatives to get the highest possible price in such
situations. AmeriGlobe is based in Louisiana, and Schnaars had heard of
companies being sued as a result of price gouging during the aftermath of
Hurricane Katrina. Second, AmeriGlobe had to split its profits on the TrapBag
equally with Wade. Althoff later testified that, when informed of the change in
the commissions for the TrapBag, he had two choices: “I could quit. I could
continue to work.” Tr. Vol. 2, p. 150. Althoff continued to work.
[10] In April 2011, Althoff sold 5,280 feet of four-foot trap bags to Cass County,
North Dakota, for $140,701.22, or $26.64 per foot. AmeriGlobe paid Althoff a
flat commission of 5%, or $7,035.06. Under the one-half company standard
commission rate Althoff claims should have been used, he would have received
a commission of $7,793.28.5 Thus, Althoff claims that AmeriGlobe owes him
an additional $758.22 for this sale.
[11] At some point after this sale, AmeriGlobe changed the flat commission rate for
sales of the TrapBag to 4%, but Althoff continued to earn the one-half company
5
The list price of the four-foot TrapBags was $18. Althoff’s overage for this sale was $8.64 per foot ($26.64
− $18 = $8.64). Under the one-half company standard commission, Althoff would have earned a commission
of 1% of the list price, or $950.40 ($18 × 5,280 = $95,040 × 1% = $950.40), plus 15% of the overage, or
$6,842.88 ($8.64 × 5,280 = $45,619.20 × 15% = $6,842.88). Thus, Althoff’s total commission under a one-
half company standard would have been $7,793.28.
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standard commission on sales of bulk bags. On June 15, 2011, Althoff sold
9,500 feet of four-foot TrapBags to Burleigh County, North Dakota for
$334,590, or $35.22 per foot. AmeriGlobe paid Althoff a flat 4% commission of
$13,383.60 on this sale. The commission payable at the one-half company
standard would have been $26,248.50,6 a difference of $12,864.90.
[12] In July 2011, Althoff sold to the North Dakota Department of Emergency
Services 21,900 feet of four-foot TrapBags for a price of $711,318, or $32.48 per
foot, and 2,200 feet of six-foot TrapBags for $116,226, or $52.83 per foot.
AmeriGlobe paid Althoff a commission of only $8,533.36 on this $827,544 sale,
which is considerably less than even the 4% AmeriGlobe claims was the
commission rate for all TrapBag sales.7 By this time, under the terms of the
Employment Agreement, Althoff would have been earning the full company
standard commission rate of 2% of list price plus 30% of overage, or
$122,485.40.8 Accordingly, Althoff claims that AmeriGlobe still owes him
$113,952.04 in commissions for this sale.
6
Since the list price for the four-foot TrapBag was $18, Althoff’s overage on this sale was $17.22. One
percent of the list price was $1,710 ($18 × 9,500 = 171,000 × 1% = $1,710), plus 15% of the overage of
$24,538.50 ($17.22 × 9500 = $163,590 × 15% = $24,538.50), for a total of $26,248.50.
7
In fact, this constitutes 1.03% of the total sales price. Four percent of $827,544 is $33,101.76. Accordingly,
even under the 4% flat commission, AmeriGlobe underpaid Althoff $24,568.40 for this sale.
8
The overage for the sale of the four-foot bags was $14.48 ($32.48 − $18.00). Using the company standard
commission rate, the commission for the sale of the four-foot bags would have been 2% of list price, or $7,884
($18 × 21,900 = $394,200 × 2% = $7,884), plus 30% of overage, or $95,133.60 ($14.48 × 21,900 = $317,122
× 30% = $95,133.60), for a total commission of $103,017.60 for the four-foot bags. For the six-foot bags, the
overage was $27.83 ($52.83 − $25.00). Using the company standard commission rate, the commission for the
sale of the six-foot bags would have been 2% of list price, or $1,100 ($25 × 2,200 = $55,000 × 2% = $1,100),
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[13] Also in July 2011, Althoff sold to the Iowa Department of Transportation
49,400 feet of four-foot TrapBags for a total price of $1,976,000, or $40 per foot.
AmeriGlobe paid Althoff a commission of $70,080.9 Under the company
standard commission Althoff claims he should have paid, he would have
earned a commission of $343,824.10 Thus, Althoff claims AmeriGlobe still owes
him $273,744 in commissions for this sale.
[14] Lastly, on July 15, 2011, Althoff sold 6,000 feet of four-foot TrapBags to the
State of Nebraska for a price of $211,320, or $35.22 per foot. AmeriGlobe paid
Althoff a 4% commission of $8,452.80. The commission payable at the
company standard rate would have been $33,156.00.11 Thus, Althoff claims that
AmeriGlobe owes him the difference of $24,703.20.
[15] On August 11, 2011, AmeriGlobe terminated Althoff’s employment, citing his
failure to provide requested paperwork and failing to travel to company
headquarters when asked.12 During this term of employment, Althoff was paid
plus 30% of overage, or $18,367.80 ($27.83 × 2,200 = $61,266 × 30% = $18,367.80), for a total commission
of $19,467.80 on the six-foot bags. The total commission for this sale would have been $122,485.40.
9
We note that 4% of $1,976,000 is $79,040.00, not $70,080. AmeriGlobe’s commission statement shows that
it paid no commission on one of the invoices that was part of this order, amounting to a $8,960 shortfall.
10
The overage for this sale was $22 ($40 − $18). Using the company standard commission rate, the
commission for the sale of these bags would have been 2% of list price, or $17,784 ($18 × 49,400 = 889,200 ×
2% = $17,784), plus 30% of overage, or $326,040 ($22 × 49,400 = $1,086,800 × 30% = $326,040), for a total
commission of $343,824.
11
The overage for this sale was $17.22. Under the company standard overage, Althoff’s commission for this
sale would have been 2% of list price, or $2,160 ($18 × 6,000 = $108,000 × 2% = $2,160), plus 30% of
overage, or $30,996 ($17.22 × 6,000 = 103,320 × 30% = $30,996), for a total commission of $33,156.
12
Althoff alleged that AmeriGlobe terminated him so that it would not have to pay the full amount of the
commissions owed on the TrapBag sales, but the trial court rejected this contention.
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$317,000. Even though he was terminated, AmeriGlobe also paid Althoff a
bonus of $41,000.
[16] Althoff’s unemployment did not last long. Just a few weeks after terminating
him, Schnaars telephoned Althoff and rehired him on September 12, 2011.
During this second period of employment, AmeriGlobe agreed to pay Althoff a
base salary of $180,000 and a 4% commission on gross sales over $1,000,000.
Althoff focused on training other sales representatives to sell the TrapBag. On
September 24, 2012, just over a year after being rehired, AmeriGlobe again
terminated Althoff’s employment. Althoff does not claim he is owed any
additional amount for this period of employment.
[17] Once again, Althoff’s unemployment did not last long, as AmeriGlobe rehired
him yet again in November 2012 on a commission-only basis. This lasted until
January 13, 2013, when Althoff’s employment was terminated for the third and
final time.13
[18] On March 1, 2013, Althoff filed a complaint alleging that AmeriGlobe had
violated the Indiana Wage Claims Statute and that AmeriGlobe was unjustly
enriched by underpaying Althoff’s commissions. AmeriGlobe’s answer
included a defense that Althoff had not exhausted his administrative remedies
under the Wage Claims Statute and that Althoff’s claim under the Wage Claims
13
Althoff’s complaint alleged that he was owed an additional $33,000 in commissions for this period, but the
trial court found against Althoff on this claim, and Althoff does not cross-appeal the trial court’s resolution of
this matter.
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Statute was barred by a two-year statute of limitations. Althoff admitted during
discovery that he had not filed a claim against AmeriGlobe with the Indiana
Department of Labor but denied that this was required.
[19] AmeriGlobe subsequently moved for summary judgment on Althoff’s claim
under the Wage Claims Statute, arguing that it was entitled to judgment as a
matter of law due to Althoff’s failure to exhaust his administrative remedies.
Althoff opposed summary judgment, claiming that he was not required to
exhaust his administrative remedies because the Department of Labor would
not pursue a claim in excess of $6,000. He also claimed that pursuing an
administrative remedy would therefore be futile, as his claim was well in excess
of this amount. Althoff further argued that he had cured any failure to exhaust
his administrative remedies by attempting to submit his claim to the
Department of Labor’s online portal on October 9, 2013, only to have this
attempt rejected due to the amount involved. He also argued that the trial court
could still hear a claim for breach of contract and unjust enrichment.
[20] AmeriGlobe argued in reply that the $6,000 limit is for assigning claims to the
Department of Labor and does not limit who must first submit claims to the
Department of Labor to be investigated and vetted. It also argued that
submitting the claim to the Department of Labor would not have been futile, as
the Department was statutorily required to investigate the claim and, if
warranted, appoint private counsel to pursue the claim. AmeriGlobe also noted
that Althoff’s complaint did not include a claim for breach of contract.
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[21] The trial court held a summary judgment hearing on March 28, 2014, and took
the matter under advisement. On November 25, 2014, the trial court entered an
order granting AmeriGlobe’s motion, agreeing with AmeriGlobe that Althoff
had not exhausted his administrative remedies. The trial court determined that
“[t]he purpose of the Indiana Wage Claims Act’s requirement that claims first
be brought to the Department of Labor . . . is to create a barrier to claims to be
filed in court, and [a] claim must work its way through proper channels, the
[Department of Labor] and, if need be, [the] Attorney General, before it may be
brought into court.” Appellant’s App. Vol. 2, p. 93. The trial court ordered
Althoff to “formally file his claim with the Department of Labor and exhaust all
administrative remedies before further pursuing this matter in court.” Id. at 5.
[22] On December 23, 2014, Althoff, now represented by new counsel, filed a
consolidated motion for “Rehearing, Reconsideration, and Reinstatement of
Count I, Request for Leave to Amend the Complaint or Alternatively, Motion
for Certification of Interlocutory Order.” Id. at 95–97. In his motion, Althoff
averred that he had, as ordered, submitted an application for a wage claim to
the Department of Labor on November 26, 2014,14 and the Department
determined that it could not accept the assignment of his claim. Instead, the
Department authorized Althoff to pursue his claim with a private attorney. Id.
at 103. Althoff’s motion argued that his wage claim should be reinstated. It also
requested leave to amend his complaint to add a claim for breach of contract
14
In his Appellee’s Brief, Althoff claims that he submitted his claim with the Department of Labor on
December 1, 2014.
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claim. Alternatively, it requested that the trial court certify its summary
judgment order for interlocutory review.
[23] The trial court held a hearing on Althoff’s consolidated motion on March 23,
2015, and on June 23, 2015, the court entered an order which granted Althoff’s
motion for leave to amend his complaint to add a claim for breach of contract,
denied the motion to certify its order for interlocutory appeal, and ordered
Althoff to submit a new wage claim to the Department of Labor. The trial court
determined that Althoff had not given the Department of Labor an opportunity
to investigate his claim or refer it to the Attorney General until he submitted his
application on November 26, 2014. Thus, the court concluded that Althoff had
not exhausted his administrative remedies and that his wage claim was invalid.
The trial court ordered Althoff to file a new wage claim with the Department of
Labor.
[24] On July 17, 2015, Althoff submitted another application for wage claim to the
Department of Labor. On July 31, 2015, the Attorney General’s office wrote to
Althoff authorizing him to pursue his wage claim and authorizing his counsel
to represent him on this claim. Id. at 192. On August 4, 2015, the Department
of Labor sent Althoff a letter “authorizing [him] to pursue this matter with a
private attorney licensed in the State of Indiana.” Id. at 190.
[25] On August 11, 2015, Althoff filed an amended complaint with four counts. The
first count alleged a breach of the 2010 employment agreement; the second
count alleged a breach of his 2012 agreement to return to work for AmeriGlobe;
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the third count alleged unjust enrichment; and the fourth count asserted a claim
under the Indiana Wage Claims Statute. The complaint requested
compensatory damages, liquidated damages, attorney fees, and costs. Althoff
alleged that AmeriGlobe owed him $520,000 in unpaid commissions for the
employment period between August 23, 2010 and August 9, 2011, and $33,000
in unpaid commissions for the employment period between November 2012
and January 14, 2013.
[26] AmeriGlobe filed its answer to the amended complaint on August 31, 2015,
asserting that the wage claim was barred by the statute of limitations.
AmeriGlobe also moved for partial summary judgment on the issue of the
statute of limitations. The trial court held a hearing on this motion on March
17, 2017, and entered an order denying the motion on March 21, 2017.
[27] The trial court held a two-day bench trial on March 28–29, 2017. AmeriGlobe
requested that the trial court enter specific findings and conclusions under
Indiana Trial Rule 52. The parties submitted proposed findings and conclusions
on April 28, 2017, and the trial court entered its findings of fact and conclusions
of law on July 19, 2017. The trial court concluded that AmeriGlobe owed
Althoff $421,836.73 in unpaid commissions, and it doubled those damages
under the penalty provision of the Wage Claims Statute. The trial court further
held that AmeriGlobe was liable to Althoff for an unspecified amount of court
costs and attorney fees. On August 15, 2017, the court certified its order as a
final, appealable order pursuant to Trial Rule 54(B), finding that there is no just
reason to delay the entry of judgment. AmeriGlobe now appeals.
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I. Summary Judgment on Wage Claim
[28] AmeriGlobe contends that the trial court erred when it denied its motion for
summary judgment, which was based on AmeriGlobe’s contention that Althoff
had failed to exhaust his administrative remedies before filing his claim under
the Wage Claims Statute.15 On appeal from a trial court’s ruling on a motion for
summary judgment, we apply the same standard as the trial court. M.S.D. of
Martinsville v. Jackson, 9 N.E.3d 230, 235 (Ind. Ct. App. 2014), trans. denied.
That is, we consider only those facts that the parties designated to the trial court
to determine whether there is a genuine issue as to any material fact and
whether the moving party is entitled to judgment as a matter of law. Id. We
construe all factual inferences in favor of the non-moving party and resolve all
doubts as to the existence of a material issue against the moving party. Id. The
moving party bears the burden of making a prima facie showing that there are no
genuine issues of material fact and that the moving party is entitled to judgment
as a matter of law. Id. Once the movant makes this prima facie showing, the
burden shifts to the non-moving party to designate and produce evidence of
facts showing the existence of a genuine issue of material fact. Id. Still, the party
appealing a summary judgment decision bears the burden of persuading this
court that the grant or denial of summary judgment was erroneous. Id. Where
15
The Wage Claims Statute is applicable to employees who have been separated from work by their
employer and employees whose work has been suspended as a result of an industrial dispute. St. Vincent Hosp.
& Health Care Ctr., Inc. v. Steele, 766 N.E.2d 699, 705 (Ind. 2002) (citing Ind. Code § 22-2-9-2). In contrast, the
Wage Payment Statute references current employees and those who have voluntarily left employment Id.
(citing Ind. Code § 22-2-5-1(b)). Here, Althoff proceeds only under the Wage Claims Statute.
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the facts are undisputed and the issue presented is a pure question of law, we
review the matter de novo. Id.
[29] AmeriGlobe argues that Althoff’s failure to submit his complaint to the Indiana
Department of Labor before he filed suit bars his claim. AmeriGlobe’s
argument has support. For example, in St. Vincent Hospital & Health Care Center,
Inc. v. Steele, 766 N.E.2d 699 (Ind. 2002), our supreme court analyzed the Wage
Payment Statute and the Wage Claims Statute. With regard to the latter, the
court explained:
Claimants who proceed under this statute may not file a complaint with
the trial court. Rather, the wage claim is submitted to the Indiana
Department of Labor. It then becomes “the duty of the
commissioner of labor to enforce and to insure compliance with
the provisions of this chapter, to investigate any violations of any
of the provisions of this chapter, and to institute or cause to be
instituted actions for penalties and forfeitures provided under this
chapter.” I.C. § 22-2-9-4(a). To that end, the commissioner “may
hold hearings to satisfy himself as to the justice of any claim, and
he shall cooperate with any employee in the enforcement of any
claim against his employer in any case whenever, in his opinion,
the claim is just and valid.” Id. Further, the commissioner may
take assignments of wage claims under $800[16] and refer wage
claims to the Attorney General, who may then initiate a civil
action on behalf of the wage claimant or refer the wage claim to a
private attorney. I.C. §§ 22-2-9-4(b), -5. Claimants whose lawsuits
have been initiated by the Attorney General or the Attorney
General’s designee are entitled to recover liquidated damages and
16
This amount has since been increased to $6,000. See I.C. § 22-2-9-5(a) (as amended by P.L.165-2007 § 2).
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attorney fees as set forth in Indiana Code section 22-2-5-2. I.C. §
22-2-9-4(b).
Id. at 705 (emphasis added).17
[30] And in Naugle v. Beech Grove City Schools, 864 N.E.2d 1058, 1062 (Ind. 2007),
the court held that although claimants under the Wage Payment Statute may
proceed by filing a complaint, “the Wage Claims Statute requires that a wage
claim be submitted to the Department of Labor for administrative
enforcement.” Yet again, in Quimby v. Becovic Management Group., Inc., 962
N.E.2d 1199, 1200 (Ind. 2012), the court held that “an employee who has a
claim under the Wage Claims Statute must first exhaust an administrative
remedy with the DOL before filing a lawsuit.” (citing I.C. § 22-2-9-4) (emphasis
added); see also Hollis v. Def. Sec. Co., 941 N.E.2d 536, 540 (Ind. Ct. App. 2011)
(holding that trial court properly dismissed complaint filed by plaintiff who was
involuntarily separated from his employment where, instead of submitting his
claim to the Department of Labor under the Wage Claims Statute, he filed suit
under the Wage Payment Statute), trans. denied.
[31] As this court explicitly stated Lemon v. Wishard Health Services, 902 N.E.2d 297,
300 (Ind. Ct. App. 2009), trans. denied, “the Wage Claims [Statute]
contemplates that a claimant must approach the [Department of Labor] before
17
We note that a claim for unpaid wages under the Wage Claims Statute may include a claim for unpaid
commissions. See Ind. Code § 22-2-9-1(b) (“The term ‘wages’ means all amounts at which the labor or service
rendered is recompensed, whether the amount is fixed or ascertained on a time, task, piece, or commission
basis, or in any other method of calculating such amount.”).
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he or she is entitled to file a lawsuit in court to seek unpaid wages or penalties.”
(emphasis added). In Lemon, the named plaintiff met the exhaustion
requirements of the Wage Claims Statute by submitting her claim to the
Department of Labor before she filed suit. Id. at 301. In that case, however, the
named plaintiff sought to convert her complaint into a class action. Id. The
question before the Lemon court was “whether the act of seeking class
certification somehow enables the putative class members to avoid compliance
with the statute.” Id. We answered this question in the negative. See id. at 301–02
(“we cannot conclude that the purpose of the Wage Claims [Statute] is satisfied
by permitting a putative class representative’s claim to act as a proxy for the
claims of the putative class members. ”).
[32] Still, the plaintiff in Lemon argued that even if putative class members needed a
letter of referral from the Department of Labor to proceed with their respective
claims, they could obtain those letters after the lawsuit was filed. Id. at 302. We
flatly rejected this claim, noting that the plain language of the Wage Claims
Statute “requires that the letter be obtained—and the administrative process
followed—before the lawsuit is filed.” Id. We agreed that obtaining permission
to sue after the complaint had already been filed would be “the emptiest of
gestures,” and held that “to get the letter of referral after the fact would be to
render the statute a nullity, which we cannot and will not do.” Id. (emphasis
added).
[33] We are therefore compelled to agree with AmeriGlobe that the trial court erred
in denying its motion for partial summary judgment on Althoff’s claims under
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the Wage Claims Statute. The Wage Claims Statute, as interpreted by our
supreme court clearly requires that a complainant obtain the permission of the
Department of Labor and/or Attorney General before filing suit under the Wage
Claims Statute. And we held in Lemon that a plaintiff may not seek such
permission after having already filed suit, which is precisely what the trial court
permitted here.
[34] We also note that a two-year statute of limitations applies to claims made under
the Wage Claims Statute. Lemon, 902 N.E.2d at 302 (citing Ind. Code § 34-11-2-
1).18 Althoff did not submit any claim with the Department of Labor until
November 26, 2014. This is more than two years after August 11, 2011, when
AmeriGlobe terminated Althoff’s employment and the latest date his claim
under the Wage Claims Statute could have accrued. Thus, even if Althoff could
have cured his failure to exhaust his administrative remedies by submitting his
claim to the Department of Labor after having already filed suit, he did not do
so until after the applicable statute of limitations had expired.
[35] Althoff argues that a ten-year statute of limitations should apply because his
claim was based on a written contract. See I.C. § 34-11-2-1 (excepting actions
based on written contracts from two-year statute of limitations). Assuming
Althoff’s breach of contract claim may be based on a written contract, his claim
18
Indiana Code section 34-11-2-1 provides, “An action relating to the terms, conditions, and privileges of
employment except actions based upon a written contract (including, but not limited to, hiring or the failure
to hire, suspension, discharge, discipline, promotion, demotion, retirement, wages, or salary) must be
brought within two (2) years of the date of the act or omission complained of.”
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under the Wage Claims Statute is not. See Lemon, 902 N.E.2d at 302 (holding
that claims under the Wage Claims Statute are subject to the two-year statute of
limitations set forth in Indiana Code section § 34-11-2-1); see also Reel v. Clarian
Health Partners, Inc., 917 N.E.2d 714, 720 n.5 (Ind. Ct. App. 2009) (noting that
claims under the Wage Claims Statute are subject to a two-year statute of
limitations), trans. denied.19
[36] Because Althoff did not submit his claim under the Wage Claims Statute to the
Department of Labor until after he had already filed suit, and well after the
applicable statute of limitations had run, the trial court should have granted
AmeriGlobe’s motion for summary judgment on Althoff’s claims under the
Wage Claims Statute. We therefore reverse the trial court’s judgment on
Althoff’s claim under the Wage Claims Statute.20
II. Breach of Contract
[37] AmeriGlobe also argues that the trial court erred in granting judgment in favor
of Althoff on his claim that AmeriGlobe breached its employment agreement
19
Both parties agree that the written employment agreement embodied the terms of their agreement.
However, this document was not signed by either party. In a “hypertechnical” sense, then, the terms of the
parties’ contract was an “oral adoption” of the terms stated in the written agreement. See Knutson v. UGS
Corp., 526 F.3d 339, 341 (7th Cir. 2008) (noting that where document titled “Compensation Program”
contained no space for signatures and was unsigned, it was merely a statement of terms, and that the contract
between the employer and employee was therefore “an oral adoption of the terms stated in” the written
terms). But whether the contract between the parties here was written or oral does not alter our conclusion.
The fact remains that his claim under the Wage Claims Statute is subject to a two-year statute of limitations.
20
Because we conclude that the trial court erred in awarding damages under the Wage Claims Statute, we
need not address AmeriGlobe’s argument that the trial court further erred by awarding double damages
without a finding of bad faith.
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with Althoff.21 When a trial court enters findings and conclusions pursuant to
Indiana Trial Rule 52, we apply a two-tiered standard of review on appeal.
Anderson v. Ivy, 955 N.E.2d 795, 800 (Ind. Ct. App. 2011), trans. denied. We first
determine whether the evidence supports the findings. Id. Second, we determine
whether the findings support the judgment. Id. “‘In deference to the trial court’s
proximity to the issues, we disturb the judgment only where there is no
evidence supporting the findings or the findings fail to support the judgment.’”
Id. (quoting Smith v. Smith, 938 N.E.2d 857, 860 (Ind. Ct. App. 2010)). We do
not reweigh the evidence, and we consider only the evidence favorable to the
trial court’s judgment. Id. The party appealing the trial court’s judgment must
establish that the findings are clearly erroneous. Id. Findings of fact are clearly
erroneous when the record lacks any reasonable inference from the evidence to
support them, and the trial court’s judgment is clearly erroneous if it is
unsupported by the findings and the conclusions which rely upon those
findings. Infinity Products, Inc. v. Quandt, 810 N.E.2d 1028, 1031 (Ind. 2004). We
do not defer to conclusions of law, which are evaluated de novo. Anderson, 955
N.E.2d at 800.
21
Ameriglobe makes no argument that a claim under the Wage Claims Statute was Althoff’s exclusive
remedy. Even if it did, we are unable to find any authority to suggest that an employee plaintiff may not
plead alternative theories of relief, i.e., both a claim under the Wage Claims Statute and a claim for breach of
contract. To the contrary, our research has revealed cases in which plaintiffs brought claims for a breach of
contract and under the Wage Claims Statute, and nothing in these cases suggests that this is impermissible or
that a claim under the Wage Claims Statute is an exclusive remedy. See e.g., Sheaff Brock Inv. Advisors, LLC v.
Morton, 7 N.E.3d 278, 285 (Ind. Ct. App. 2014), trans. denied; Herremans v. Carrera Designs, Inc., 157 F.3d 1118,
1122 (7th Cir. 1998).
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[38] AmeriGlobe claims that because Althoff was an at-will employee, it could
change the terms of his employment, including the commission rate, and if
Althoff continued to work after being informed of this change in employment
terms, he tacitly agreed to them. AmeriGlobe’s position has support in case
law.22
[39] For example, in Wheeler v. Balemaster, 601 N.E.2d 447 (Ind. Ct. App. 1992),
Wheeler, the employee, worked for the employer as a salesman. At the time he
started, the employer had a written incentive plan which stated that
commissions would be paid after shipment of the order. Id. at 448. Later,
however, the employer altered the commission plan to make payment of
commission contingent upon employment with the company; that is, it would
not pay commission on a sale if the salesperson was not still employed with the
company, even if that salesperson had made that particular sale. Wheeler
objected to this change, but nevertheless continued to work for the employer
until he resigned to run a competing business. Pursuant to its revised policy, the
employer did not pay Wheeler for any commissions on orders that shipped after
he left. Wheeler then filed a complaint to recover the unpaid commissions. The
22
Althoff argues that AmeriGlobe waived this argument by failing to present it to the trial court. We
disagree. Althoff admits that AmeriGlobe’s argument before the trial court was that the written employment
agreement “did not entitle Mr. Althoff to the same commission rate structure for Trap bag sales. . . and [that]
Ameriglobe was free to change the commission rate.” Appellee’s Br. at 19. This is essentially the same
argument AmeriGlobe presents on appeal. That AmeriGlobe did not cite to the same particular cases, or that
it has cited new authority to support its position, is not fatal to its claim on appeal. See Moryl v. Ransone, 4
N.E.3d 1133, 1136 (Ind. 2014) (“Questions within the issues and before the trial court are before the appellate
court, and new arguments and authorities may with strict propriety be brought forward.”).
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trial court granted summary judgment in favor of the employer. Wheeler
appealed, but this court made short work of Wheeler’s argument, writing:
This Court has held that, when an employer unilaterally changes
agreed-upon employment terms, the employee may either (1)
accept the changes and continue employment under the new
terms or (2) reject the changes and quit work. Although
[Wheeler] objected to the revised incentive plan, he continued to
work for Employer for over six months before voluntarily
resigning; therefore, he must abide by the revised plan.
Id. (citing Quillen v. Review Bd. of Ind. Emp’t Security Div., 468 N.E.2d 238, 241
(Ind. Ct. App. 1984)).
[40] And in Todd v. Stewart, 566 N.E.2d 1077 (Ind. Ct. App. 1991), trans. denied, the
plaintiff Todd was hired in 1983 by the defendant Stewart to work as a legal
secretary for his law office and title insurance company. The parties originally
agreed that Todd would be entitled to a bonus. But in May 1987, Stewart
announced that he was cancelling the bonus agreement. Todd told Stewart that
this was unacceptable but nevertheless continued to work for Stewart until July
1987, when he terminated her employment. Todd filed suit seeking damages,
including for the unpaid bonus. On appeal, we held that the trial court did not
err in denying recovery for the bonus after Stewart unilaterally cancelled it. Id.
at 1079 (citing Quillen, 468 N.E.2d at 241). The court noted that, although Todd
did not agree to, and in fact protested, the change, she continued to work for
Stewart after he announced the change. She was therefore bound by the new
terms of her employment. Id.; see also Sweet v. Indianapolis Jet Ctr., Inc., 918 F.
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Supp. 2d 801, 807 (S.D. Ind. 2013) (citing Wheeler for the proposition that, in
the absence of an enforceable employment contract, the employer could change
the terms of the employment and that when the employee was presented with a
new salary, he could either accept it or resign).
[41] At first blush, these cases might appear to be distinguishable in that, here, there
was a written employment agreement. However, that agreement was
terminable at the discretion of either party. See Appellant’s App. Vol. 2, p. 49
(term of employment was at the discretion of either AmeriGlobe or Althoff).
Indeed, Althoff himself testified on direct examination by his own counsel that
his employment was “at will,” meaning “[t]hat I could quit. They could fire
me.” Tr. Vol. 2, p. 108. Thus, despite having written down the terms of
Althoff’s employment, Althoff was still an at-will employee. Accordingly, when
AmeriGlobe informed Althoff that it was unilaterally changing the terms of his
employment, i.e., that the commission rate for sales of the TrapBag would be a
flat 4%, he had two choices under Indiana law: he could quit, or he could
continue to work, thereby accepting the new terms of his employment. Wheeler,
601 N.E.2d at 448. Althoff admittedly chose the latter, as he testified on direct
examination:
Q. Now, after [Schnaars] told you that that’s what he was
going to pay you, in your mind, what choices did you
have?
A. I could quit. I could continue to work.
Q. And did you continue to work?
A. Yes, I did.
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Tr. Vol. 2, p. 150.
[42] Thus, when Althoff continued to work after AmeriGlobe changed the terms of
his employment, he effectively agreed to new terms of employment and he must
abide by the revised terms. Wheeler, 601 N.E.2d at 448; Todd, 566 N.E.2d at
1077. These revised terms were a 4% flat commission on the sales of the
TrapBag and the company standard commission on bulk bags. Althoff’s claim
that he is owed the company standard commission on sales of the TrapBag
therefore fails.
[43] We note, however, that even under AmeriGlobe’s unilaterally revised terms of
a 4% commission on TrapBag sales, AmeriGlobe underpaid Althoff by
$33,528.40. See notes 7, 9 supra. Accordingly, although the trial court erred as a
matter of law in concluding that Althoff was entitled to the commission rate set
forth in the written agreement, Althoff is entitled to $33,528.40, which
represents the 4% commission that AmeriGlobe unilaterally changed and which
Althoff agreed to by continuing to work for AmeriGlobe.23 We therefore reverse
the trial court’s award of damages for breach of the employment agreement and
remand for entry of judgment in favor of Althoff in the amount of $33,528.40.
23
Absent some other arrangement, when an employer makes an agreement to provide compensation for
services, the employers right to this compensation vests when the employee renders the service, and the
employee is entitled to be compensated pursuant to the terms of employment in effect at the time the service
was rendered. Sheaff Brock, 7 N.E.3d at 284 (citing Highhouse v. Midwest Orthopedic Institute, P.C., 807 N.E.2d
737 (Ind. 2004); Wells Fargo Ins., Inc. v. Land, 932 N.E.2d 195, 200 (Ind. Ct. App. 2010)). Thus, Althoff was
entitled to a 4% commission for sales of the TrapBag when he completed the sales transactions.
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Conclusion
[44] The trial court erred by denying AmeriGlobe’s motion for partial summary
judgment on Althoff’s claims under the Wage Claims Statute, as Althoff did not
submit his wage claim to the Department of Labor and receive permission to
file his claim before he filed suit against AmeriGlobe. Althoff’s action of
submitting his claim to the Department of Labor after he filed suit does not
remedy his failure to do so before having filed suit. The trial court also erred as
a matter of law in concluding that Althoff was entitled to the commission rate
set forth in the written employment agreement. Because Althoff was admittedly
an at-will employee, AmeriGlobe could unilaterally change the terms of
Althoff’s employment. When AmeriGlobe did so, Althoff had two options
under Indiana law: quit, or continue to work under the new terms. By
continuing to work for AmeriGlobe, Althoff effectively agreed to the new
commission structure. Althoff is, however, entitled to $33,528.40, which
represents the 4% commission rate that AmeriGlobe unilaterally imposed and
to which Althoff agreed by continuing to work for AmeriGlobe. We therefore
reverse the judgment of the trial court and remand for entry of judgment in
favor of Althoff in the amount of $33,528.40.
[45] Reversed and remanded.
Najam, J., and Barnes, J., concur.
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