Failla v. FixtureOne Corp.

In 2009, Kristine Failla, a Washington resident and experienced salesperson, was looking for a job she could perform from her Gig Harbor home. She e-mailed Kenneth Schutz looking for such a position. Schutz was the founder and chief executive officer (CEO) of FixtureOne Corporation, which sells fixtures, casework, and displays for use in retail stores. Both FixtureOne and Schutz are based in Pennsylvania, and at the time of Failla's email, FixtureOne had no physical presence or customers in Washington. FixtureOne hired Failla as an account executive. In December 2010, Failla requested a promotion and a raise. Schutz agreed and promoted her to FixtureOne's vice president of sales, increased her yearly salary. Although there were outstanding commissions owed, Failla accepted the promotion and salary increase based on the assurances that the commissions would be paid. Schutz provided a draft employment agreement for Failla to sign in connection with the promotion. Among other things, the agreement contained a provision that it would be interpreted in accordance with Pennsylvania law. Failla proposed revisions to the agreement, but for reasons unknown neither Failla nor Schutz ever signed it. Failla continued working for FixtureOne from her Washington home until May 2011. She received regular paychecks, and the only issue in this case was the sales commissions owed to her that were not paid. In May 2011, Schutz emailed Failla to tell her that FixtureOne was "clos[ing] its doors" and ended her employment the following day. He assured Failla that FixtureOne would "pay your commissions and expenses asap in the next several weeks." For two months following her termination, Schutz returned Failla's requests for payment with various explanations as to why the commissions remained unpaid. Schutz eventually advised Failla that she would not receive a commission check and for the first time disputed whether such commissions were even owed. Failla filed suit against FixtureOne and Schutz for the wilfull withholding of wages, including an allegation that Schutz was individually liable under Washington's wage laws. Failla served Schutz in Pennsylvania but was unable to serve FixtureOne. Consequently the suit proceeded against Schutz alone. Failla and Schutz cross moved for summary judgment. Schutz argued that the trial court lacked personal jurisdiction because he did not have the requisite minimum contacts with the state, and even if Washington could exercise jurisdiction over him, there were genuine issues of material fact preventing the entry of summary judgment. The trial court concluded it had personal jurisdiction and denied Schutz's summary judgment motion. The court granted summary judgment to Failla, awarding double damages. The Court of Appeals reversed, holding that Washington's long-arm statute did not reach Schutz because the employment relationship between Failla and FixtureOne was inadequate to confer jurisdiction over Schutz. The Washington Supreme Court disagreed with the appellate court, and reversed. View "Failla v. FixtureOne Corp." on Justia Law