Las Vegas POA

Bargaining Obligation Prevails Over Wage Recoupment Statute

Written on 01/06/2021
Will Aitchison

On November 1, 2016, an audit at a county in Washington uncovered an accounting software error had caused Benton County Sheriff’s Office employees, including 85 corrections officers, to be overpaid from June 2016 through September 2016. Benton County Auditor Brenda Chilton sent Sheriff Steven Keane a memo that notified him of the error. The memo explained how the error occurred and that the County had the right under a state statute to recoup overpayments by deducting up to five percent of gross earnings from employee wages.

On November 15, the Sheriff’s Office served its employees with a “Wage Overpayment Repayment Demand” letter. The letter stated the County had begun the statutory process for overpayment recovery and requested that the employee select one of three options for repayment and sign the letter. The options were: (1) deduct the full overpayment amount from the employee’s next paycheck, (2) deduct an employee-specified amount from future paychecks, or (3) deduct an amount that would not exceed five percent of the employee’s disposable earnings in a pay period from future paychecks.

The letter provided no option for contesting the County’s assertion that overpayment occurred or the County’s calculation of the overpaid amount. The letter stated if the employee did not respond within 20 days, and if the amounts were not disputed, the County would begin deducting the statutory five percent of disposable earnings beginning with the employee’s January 2017 paycheck. The County did not send a copy of the letter to Teamsters Local 839, which represents the corrections officers.

Local 839 demanded to bargain over the recoupment and how it was to be accomplished. However, in January 2017, the County began deducting from employee wages and accrued leave. These deductions occurred without bargaining with or the agreement of Teamsters.

Local 839 filed two unfair labor practice complaints with Washington’s Public Employment Relations Commission, one of which contended that the County failed to bargain before unilaterally implementing the recoupment process. When PERC found for the Teamsters, the County appealed to the Washington Court of Appeals.

The Court upheld PERC’s finding that the County had illegally refused to bargain. The Court began with the proposition that “recovery of overpaid wages is a mandatory subject of bargaining. There is no question that payment of wages is a mandatory subject of bargaining. The decision requiring members to forfeit paid wages represents a unilateral change that should have been bargained. The Union was presented with a ‘fait accompli’ as the Employer did not provide notice to the Union and made a unilateral decision to recoup wages.”

The Court then turned to the heart of the case – the state statute allowing an employer to recoup overpayments or the state collective bargaining statute. The Court conceded that “generally, it is true that a more specific statute controls over a more general one. However, this argument ignores an important part of the collective bargaining law. The legislature, in crafting the bargaining law, decided it should be construed liberally and ‘if any provision of this chapter conflicts with any other statute, ordinance, rule or regulation of any public employer, the provisions of this chapter shall control.’

“If the legislature intended to make the wage overpayment statutes control over the bargaining law, it would have specifically provided for this. We presume that the legislature, when writing legislation, knows the area of law it is legislating within. We, therefore, presume the legislature knew the bargaining law would control over the wage overpayment statutes. Without an express intention otherwise, the bargaining law must control over other legislation.

“Here, the County circumvented Teamsters by directly dealing with its members about repayment of overpaid wages, it refused Teamsters’ request to bargain over repayment options, and it deducted amounts from union member wages and accrued leave without providing Teamsters an opportunity to bargain. The wage overpayment statutes do not insulate the County from these actions.

“The remedy applied in this case – to return its union member employees to status quo ante by repaying the withheld wages plus interest – is the standard remedy in cases where an employer commits a unilateral change. This is clearly within PERC’s authority to effectuate bargaining agreements, and our limited review ends there. Once the County returns its employees to status quo ante, plus interest, it may then recover the overpaid wages by following the correct procedure.”

Teamsters Local 839 v. Benton County, 2020 WL 6602939 (Wash. Ct. App. 2020).

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