Crystal Haxton (Haxton)
1) Whether Haxton was entitled to her regular rate of pay after she terminated her employment with McClure, even though an employment agreement reduced her pay;
2) Whether Haxton was entitled to her regular rate of pay for earned vacation time; and
3) Whether Haxton was entitled to recover treble damages and attorney's fees under Indiana Code Section 22-2-5-1.
We affirm in part and reverse and remand in part.
Haxton took a cashier's job with McClure on October 19, 1995. As a condition of her employment, she signed an Employment Agreement (Agreement). The Agreement contained the following relevant provisions:
C. Upon resignation, the Employee does not give the required written two weeks notice to their immediate supervisor.
R. at 18-19.
On January 29, 1997, Haxton gave McClure a two-week written notice of her resignation. She quit working on February 2, 1997, four days after she gave notice. McClure paid Haxton a total of $459 .11, which consisted of payment at $4.75 per hour
Haxton brought a small claims action against McClure, seeking $110.48 in wages plus statutory penalties, attorney fees and costs. After a trial, the court entered judgment against Haxton. In its judgment, the trial court noted Haxton had entered into a valid employment agreement with McClure and had violated the terms of that agreement when she terminated her employment without working the full two weeks after she gave her written notice.
DECISION AND DISCUSSION
On review, we will not reweigh the evidence and will affirm the trial court's decision unless the evidence, when viewed in the light most favorable to the judgment, points incontrovertibly to an opposite conclusion. Metcalf v. Houk, 644 N.E.2d 597, 599 (Ind. Ct.App.1994). Concerning employment contracts,
1. Reduction in Pay
Haxton argues McClure was not entitled to reduce her rate of pay for hours she had already worked. In support of this argument, she contends the Agreement constitutes an assignment of wages in violation of Indiana Code Section 22-2-6-1, which states:
Indiana Code Section 22-2-6-2(a) defines the requirements for making a deductible assignment of wages:
These statutes are inapplicable in this case. The Agreement, in which Haxton agreed to accept a reduced amount of pay under certain circumstances, is not a "deduction from the wages to be earned" as contemplated by the wage assignment statutes. The Agreement also does not contain language which would allow Haxton to revoke the terms of the Agreement by giving written notice. Further, Haxton does not cite any authority to support her contention that the Agreement should be construed as an assignment of wages.
Haxton also asserts that by reducing her pay, McClure has assessed a fine against her in violation of Indiana Code Section 22-2-8-1. This section provides:
We disagree, as the reduction of Haxton's pay is a term of her employment under the agreement, not a fine. Haxton also cites no authority that the reduction in her regular pay should be considered as a fine.
Haxton further argues that she complied with the Agreement by giving two weeks written notice, even though she did not work the full two weeks. She claims she is entitled to be paid at her regular rate because the Agreement is unclear as to whether she was required to work the full two weeks after her notice.
A contract is ambiguous if reasonable people would find it subject to more than one interpretation. Commercial Union Ins. v. Moore, 663 N.E.2d 179, 181 (Ind.Ct. App.1996), trans. denied. Courts should make all attempts to construe language in the contract so as not to render any words, phrases, or terms ineffective, or meaningless. Robinson v. Century Personnel, Inc., 678 N.E.2d 1268, 1270 (Ind.Ct.App.1997). The intention of parties should not only be gathered from the terms of the contract itself but also should be considered against the background of circumstances which existed at the time of its execution. Real Estate Support Servs., Inc. v. Nauman, 644 N.E.2d 907, 911 (Ind.Ct.App.1994), reh'g denied.
In this instance, we agree with the trial court that, considering the intention of the parties at the time the contract was formed, the two-week notice provision in the Agreement should be construed as requiring an employee to work for the period of his or her two-week notice. To hold otherwise would render the two-week notice element of the contract completely meaningless. Thus, we uphold the trial court's judgment in favor of McClure on this portion of Haxton's claim.
2. Vacation Pay
Haxton contends her pay for the one week of vacation she had earned at the time she terminated her employment should not have been reduced. We agree. An agreement to give vacation pay to employees
3. Attorney's Fees
Haxton claims she is entitled to treble damages under Indiana Code Section 22-2-5-2, which states as follows:
In Huff v. Biomet, Inc., 654 N.E.2d 830, 835 (Ind.Ct.App.1995), we noted this statute only addresses the frequency with which an employer must pay its employees, not the amount it must pay. See also Hendershot v. Carey, 616 N.E.2d 412, 415 (Ind.Ct.App. 1993). As such, we find Haxton is not entitled to treble damages and attorney's fees under this statute. McClure did not dispute that wages were owed to Haxton, only the amount thereof.
Affirmed in part and reversed and remanded in part.
SHARPNACK, C.J., and GARRARD, J., concur.