Weems v. Citigroup, Inc.

Opinion

In this case, which comes to us upon our acceptance of a certified question of law from the United States District Court for the District of Massachusetts (District Court) pursuant to General Statutes *772 § 51-199b (d), 1 we consider whether the forfeiture provisions of three different capital accumulation plans (plans) that the named defendant, Citigroup, Inc., and its defendant subsidiaries, 2 have offered to their employees both through voluntary payroll deductions (payroll plan) and for the payment of bonuses (bonus plan), violate Connecticut’s wage statutes, General Statutes § 31-71a et seq. The plaintiffs in this class action, who are former employees of the defendants, argue that the forfeiture provisions of the plans violate the wage statutes because: (1) they enable the defendants to withhold accrued wages, including bonuses, from their employees; (2) the plaintiffs did not knowingly and voluntarily authorize the deductions; and (3) the state department of labor (department) never approved the deduction form. We answer the certified question in the negative.

The record certified by the District Court reveals the following undisputed facts and procedural history. 3 The plaintiff class representative, William Lomas, 4 was *773 employed in Connecticut as a broker for the defendant Salomon Smith Barney, Inc., formerly Smith Barney Shearson, from 1994 until 1998, whenhe resigned to join Merrill Lynch. Lomas, like other financial consultants employed by the defendants, participated in the various plans. The March 10, 1994 payroll plan election document that Lomas signed provides in relevant part: “I elect to participate in the Capital Accumulation Plan (CAP) subject to all of the provisions and administrative rules of the Plan. I hereby irrevocably direct my employer, Smith Barney Shearson, to pay me the percent indicated below in the form of restricted stock out of all cash compensation paid to me during the period indicated below. I understand if I leave Smith Barney Shearson voluntarily or am terminated with Cause before the restrictions lapse on shares of restricted stock received under the Plan, I will forfeit the stock as well as the money I am hereby authorizing to be paid in the form of such restricted stock. I further understand and agree that, in the sole discretion of the Committee, the shares to be awarded to me may be issued under another similar plan, on the same terms and conditions as described in the CAP enrollment package sent to me. . . .” (Emphasis altered.) The payroll plan permitted the participating employees to elect to receive 5, 10, 15 or 20 percent of their compensation in the form of restricted stock, and to make that election effective for six month periods, including January through June, 1994, and July through December, 1994.

Once the employees elected to participate in the payroll plan, the defendants would deduct the selected percentage from their gross pay and award them restricted stock shares twice each year, with the awards being evidenced by restricted stock award agreements. The number of shares awarded is determined by using the monetaiy value of the employee’s contribution to purchase restricted shares of stock at a 25 percent *774 discount from their fair market value. 5 That discount reflects the risk of forfeiture and the restrictions on the sale or assignment of the stock, which last for two years from the date of the award. During that two year period, the payroll plan participant may not sell, transfer or assign the restricted shares, and, as stated on the election form, forfeits any unvested shares and the cash compensation used to pinchase those shares if he or she terminates his or her employment voluntarily or is terminated for cause. 6 The participant does, however, receive dividend or dividend payment equivalents for those restricted shares, and may direct his or her votes even before they vest. Furthermore, under the Internal Revenue Code, 26 U.S.C. § 83, the participant may defer the payment of taxes on the award of the stock until after the expiration of the restriction period, because the shares are subject to a “substantial risk of forfeiture ...."

Other employees participated in the bonus plan that paid portions of discretionary bonuses to employees in the form of restricted stock. The percentages of the bonuses paid in restricted stock as opposed to cash varied over time, depending on the amount of the bonus and the employee’s total compensation. 7 As with the *775 payroll plans, the bonus amounts were used to purchase the restricted shares at a 25 percent discount from the fair market value, and the restricted shareholders could vote their shares and receive dividends and equivalents, as well as defer taxes until after vesting; see 26 U.S.C. § 83; but would forfeit the shares and their cash value in the event of termination, either voluntary or for cause. Bonus plans in effect prior to 1994 had a two year restriction period, plans after 1994 had a three year restriction period, and current plans now have staggered vesting schedules that vest 25 percent of the stock on each one year anniversary for four years following the initial award. Smith Barney Shearson retail branch managers participated in similar bonus plans as well.

By way of example, Lomas elected to participate in the payroll plan and receive varying percentages of his compensation in the form of restricted stock during his employment, including 20 percent of his compensation during the two six month periods from January through June, 1994, and July through December, 1994. He received 10,981.46 shares of vested Citigroup, Inc., stock, with a market value of $183,536.42 upon vesting, as a result of his participation. When Lomas terminated his employment, however, he forfeited 3105.08 shares of restricted stock. Had he not participated in the plans, Lomas would have received $35,965.96 in cash compensation, rather than forfeiting those shares and the funds used to purchase them.

Lomas filed this class action complaint on behalf of himself and all other similarly situated former employees of the defendants in the Superior Court, alleging that the forfeiture provisions of the plans: (1) violated the wage statutes, specifically General Statutes §§31- *776 71b (a), 8 31-71c 9 and 31-71e; 10 (2) constituted conversion; (3) required the imposition of a constructive trust; (4) breached the fiduciary duty owed to the plaintiffs; (5) violated the covenant of good faith and fair dealing; and (6) constituted unjust enrichment. The defendants removed the action to the United States District Court *777 for the District of Connecticut pursuant to the federal court’s diversity jurisdiction, and the judicial panel on multidistrict litigation transferred the case to the United States District Court for the District of Massachusetts for coordinated pretrial proceedings. Thereafter, the District Court, Keeton, J., certified a class of “all former employees of Citigroup [Inc.], Salomon Smith Barney [Inc.], Travelers Group, Inc., or related and affiliated companies in Connecticut who participated in the Capital Accumulation Plan of Citigroup, Inc., Travelers Group, Inc., Travelers, Inc., and/or Primerica Corporation who resigned or who were terminated on or after March 13, 1994 and as a consequence lost the right to receive shares of stock and/or options and/or other earned income under the terms of the plan upon termination.” 11

The defendants subsequently moved for summary judgment pursuant to rule 56 of the Federal Rules of Civil Procedure on the first count of the complaint, which alleged violations of Connecticut’s wage statutes. The District Court, Keeton, J., denied that motion, noting that the plaintiffs’ claim presented a question of first impression under Connecticut law. Thereafter, the District Court, Gertner, J., certified the following question of law to this court: “Does the forfeiture provision of the Citigroup [Inc.] Capital Accumulation Plan violate ... § 31-71a et seq.?”

The plaintiffs claim that the forfeiture provisions of the payroll, bonus and branch manager plans violate the wage statutes because: (1) the defendants did not pay their employees the wages due, but, rather, made payroll deductions that are unauthorized by the wage statutes; (2) the wage deductions were not knowingly and voluntarily authorized by the employees; and (3) *778 the department did not approve the wage deduction form. We conclude that the bonuses, including those paid to branch managers, are discretionary merit bonuses not subject to Connecticut’s wage statutes. With respect to the payroll plan, we conclude that the plaintiffs’ consent to the deductions was knowing and voluntary, and that the defendants’ failure to receive the department’s approval of the form does not invalidate the deductions or provide a right of action for the employees.

I

Analysis of the certified question in this case requires us to begin with the threshold question of whether the various plan deductions are themselves “ '[w]ages,” as defined by General Statutes § 31-71a (3). 12 We begin with the bonus and branch manager plans. Citing numerous Superior Court decisions; see footnote 14 of this opinion; the plaintiffs claim that these bonus plans constitute wages subject to § 31-71a et seq. In response, the defendants argue that the bonuses were not wages because they were not linked to the ascertainable work performed by an individual, but rather, were discretionary and tied to the performance and profitability of the defendants’ firms. We agree with the defendants, and conclude that the bonus and branch manager plans did not constitute wages under the wage statutes.

Whether a bonus constitutes a wage under § 31-71a (3) “raises a question of statutory construction, which is a [question] of law, over which we exercise plenary review. . . . The process of statutory interpretation involves the determination of the meaning of the statutory language as applied to the facts of the case, includ *779 ing the question of whether the language does so apply. . . .

“When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. ... In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. ... In seeking to determine that meaning, General Statutes § l-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. . . . The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation.” (Internal quotation marks omitted.) State v. Marsh & McLennan Cos., 286 Conn. 454, 464-65, 944 A.2d 315 (2008).

We begin with the text of § 31-71a (3), which defines “ ‘[w]ages’ ” as “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation . . . .’’In our view, the statutory language is ambiguous because it is subject to two different reasonable readings: A bonus, even if discretionary or not specifically tied to identifiable extra work performed by an employee, could be considered “compensation for labor or services rendered” by that employee; General Statutes § 31-71a (3); it similarly is reasonable to read that language as linked expressly to identifiable extra work or services performed by a particular employee. Accordingly, § l-2z permits us to consult extratextual sources in making this determination.

*780 We first note that the legislative history from when § 31-71a (3) was enacted as No. 714, § 1, of the 1967 Public Acts, is silent about whether a bonus constitutes a wage. We find, however, the New York Court of Appeals’ decision in Truelove v. Northeast Capital & Advisory, Inc., 95 N.Y.2d 220, 738 N.E.2d 770, 715 N.Y.S.2d 366 (2000), to be highly persuasive. In that case, the plaintiff brought an action against his former employer to recover the unpaid balance of a profit sharing bonus. Id., 222. The distribution of the bonus was subject to the chief executive officer’s sole discretion, with the payments contingent on the recipient’s continued employment with the firm. Id., 222-23. After the plaintiff had resigned from the firm, the firm refused to make any further bonus payments, and the plaintiff brought an action claiming that the firm had violated New York’s wage statutes by failing to pay him. Id., 223.

The court concluded that the plaintiffs bonus was not subject to the wage statutes because it was not a wage, as defined by N.Y. Labor Law § 190 (1) (McKinney 2002), which is similar to § 31-71a (3), in that it defines wages, in relevant part, as “the earnings of an employee for labor or services rendered, regardless of whether the amount of earnings is determined on a time, piece, commission or other basis. ...” (Emphasis added.) The court emphasized that the “terms of the [firm’s] bonus compensation plan did not predicate bonus payments upon [the employee’s] own personal productivity nor give [the employee] a contractual right to bonus payments based upon his productivity. To the contrary, the declaration of a bonus pool was dependent solely upon his employer’s overall financial success. In addition, [the employee’s] share in the bonus pool was entirely discretionary and subject to the non-reviewable determination of his employer.” Id., 224. Thus, the court concluded that “the wording of the statute, in expressly linking earnings to an employee’s labor or services per *781 sonally rendered, contemplates a more direct relationship between an employee’s own performance and the compensation to which that employee is entitled. Discretionary additional remuneration, as a share in a reward to all employees for the success of the employer’s entrepreneurship, falls outside the protection of the statute.” 13 Id.; see Whiting-Turner Contracting Co. v. Fitzpatrick, 366 Md. 295, 303-305, 783 A.2d 667 (2001) (profit sharing bonus not “wage,” despite inclusion of “bonuses” under statutory definition of “wage,” when award of bonus was dependent on employer discretion or factors other than employee’s efforts); see also Marsh v. Prudential Securities, Inc., 1 N.Y.3d 146, 154, 802 N.E.2d 610, 770 N.Y.S.2d 271 (2003) (distinguishing “golden handcuffs” forfeiture provisions in bonuses from those applicable to payroll deduction programs); 14 *782 cf. Murphy v. First Union Capital Markets Corp., 152 N.C. App. 205, 208-209, 567 S.E.2d 189 (2002) (bonus paid in form of restricted stock was wage, despite fact that it had not vested, because state statute specifically defined “wages” as including “bonuses”). We agree with the analysis in Truelove, and we conclude, therefore, that bonuses that are awarded solely on a discretionary basis, and are not linked solely to the ascertainable efforts of the particular employee, are not wages under § 31-71a (3).

Accordingly, we further conclude that the terms of the regular and branch manager bonuses in this case are not wages subject to Connecticut’s wage statutes. Payments under both the bonus and branch manager programs are purely discretionary. Although the plaintiffs argue that the branch managers had to achieve “specific goals” to receive the bonuses, thus rendering them compensation for services rendered, a review of the bonus plans cited in the parties’ joint appendix, as well as the deposition of Robin Leopold, human resources director for Salomon Smith Barney, Inc., indicate that the bonus awards are tied to subjective factors such as diversity within a branch, and the profitability of the particular branches, which are factors not entirely predictable or within the control of the specific employee. Thus, we conclude that the bonus and branch manager programs are not wages contemplated by § 31-71a (3), and, therefore, the wage statutes are inapplicable to these particular claims.

II

We next turn to the payroll plan. The plaintiffs claim that their pay stubs prove that the payroll plan was funded by deductions from the amount paid as “cash *783 compensation” for the relevant pay period, compensation for which ordinarily would be due in full under § 31-7!c upon the termination of their employment, absent valid deductions under § 31-71e (2). See footnote 10 of this opinion. Accordingly, the plaintiffs contend that the forfeiture provision of the payroll plan violates § 31-71e (2) because they did not knowingly and voluntarily authorize those deductions, and the department never approved the election form. 15

We begin by assuming, without deciding, that the contributions to the plans were deductions from wages under § 31-71a(3), as explained by Mytych v. May Dept. Stores Co., 260 Conn. 152, 159-60, 793 A.2d 1068 (2002). 16 Specifically, we assume that, under the plain *784 tiffs’ employment agreement with the defendants, the wages due to them would be the gross compensation amount that had accrued during the relevant pay period, with the contribution to the plans being, therefore, a deduction from that gross amount. 17 See Marsh v. Prudential Securities, Inc., supra, 1 N.Y.3d 154 (rejecting argument that investment contributions are not deductions from wages because “it is clear that plaintiff authorized periodic withholdings from his compensation to finance the eventual purchase of fund shares”). *785 Accordingly, we address in turn the plaintiffs’ contentions that the deductions violated the wage statutes, and specifically § 31-71e (2), because: (1) they were not knowingly and voluntarily authorized; and (2) the department never approved the election form prior to its use by the defendants.

A

We begin with the plaintiffs’ claim that the forfeiture provision in the plan violated § 31-71e (2) because the deductions were not knowing and voluntary. Specifically, the plaintiffs contend that, because authorized deductions from wages amount to a waiver of the employee’s right under the wage statutes to receive payment of earned wages in full and on time, established case law on the topic of waiver requires that the deductions be voluntary and with the understanding of the consequences thereof. They then claim that the information provided about the forfeiture provision in the plans fails to render the deductions knowing and voluntary. In response, the defendants argue that other courts have rejected challenges under their states’ wage statutes to the forfeiture provisions of the same and other similar plans. The defendants also emphasize that the plan participants clearly gave informed written authorization for any deductions, and understood the benefits and risks attendant to the plans. We agree with the defendants.

Prior to its amendment by No. 08-118, § 1, of the 2008 Public Acts, which does not affect the claims in this case; see footnote 10 of this opinion; § 31-71e provided: “No employer may withhold or divert any portion of an employee’s wages unless (1) the employer is required or empowered to do so by state or federal law, or (2) the employer has written authorization from the employee for deductions on a form, approved by the commissioner, or (3) the deductions are authorized by *786 the employee, in writing, for medical, surgical or hospital care or service, without financial benefit to the employer and recorded in the employer’s wage record book.” (Emphasis added.) The plaintiffs contend, and the defendants do not extensively dispute for the purpose of this argument, 18 that a wage deduction that is not knowing, informed and voluntary does not satisfy the written authorization requirement of § 31-71e (2). Indeed, other states’ case law, including that addressing these or similar plans, appears to import such a requirement into their wage statutes. See Caviness v. Andes & Roberts Bros. Construction Co., 508 S.W.2d 253, 255 (Mo. App. 1974) (Discharged employee failed to state a claim under the wage statute for the recovery of sums in his employer’s payroll savings fund because the “[p]laintiff by his voluntary choice elected to have [$20] of his wages deducted each week for deposit into the payroll saving fund. When that money was deducted weekly and invested, it was separated and changed in character from wages just as effectively as if the deduction were for the purchase of United States [g]ovemment [sjavings [b]onds.”); Coast Hotels & Casinos, Inc. v. State Labor Commission, 117 Nev. 835, 842-43, 34 P.3d 546 (2001) (wage statute “contemplates a written authorization that is voluntary” and requires employee to execute “knowing and intelligent waiver of . . . right to receive full pay” with respect to deductions to compensate casino for shortages in employee’s cash drawer); Rosen v. Smith Barney, Inc., 393 N.J. Super. 578, 586, 925 A.2d 32 (App. Div. 2007) (no statutory violation when “[w]ithout question, the [capital *787 accumulation plan] terms were fully disclosed and plaintiffs’ participation was pursuant to a written agreement”), aff'd, 195 N.J. 423, 425, 950 A.2d 205 (2008) (no statutory violation when “the plan in which these plaintiffs participated, was entirely voluntary and its terms were fully disclosed to each of them”); Marsh v. Prudential Securities, Inc., supra, 1 N.Y.3d 156 (rejecting wage statute claims and concluding that “the disclosed risks do not negate the multiple benefits that these knowledgeable employees receive from their voluntary participation in the program”); see also Kim v. Citigroup, Inc., 368 Ill. App. 3d 298, 306, 856 N.E.2d 639 (2006) (noting that text of Illinois wage statute, 820 Ill. Comp. Stat. 115/9 [West 2002], requires “ ‘express written consent of the employee, given freely at the time the deduction is made’ ”), appeal denied, 222 Ill. 2d 609, 862 N.E.2d 235 (2007).

We conclude that the written authorization herein was informed and voluntary. The payroll plan election document recited in the statement of undisputed facts, signed by the class representative, is a model of clarity, providing in relevant part: “I elect to participate in the Capital Accumulation Plan (CAP) subject to all of the provisions and administrative rules of the Plan. I hereby irrevocably direct my employer, Smith Barney Shearson, to pay me the percent indicated below in the form of restricted stock out of all cash compensation paid to me during the period indicated below. I understand if I leave Smith Barney Shearson voluntarily or am terminated with Cause before the restrictions lapse on shares of restricted stock received under the Plan, I will forfeit the stock as well as the money I am hereby authorizing to be paid in the form of such restricted stock. . . .” (Emphasis altered.) Indeed, after reading this statement, Lomas elected to receive 20 percent of his compensation in the form of restricted stock, and renewed that election in varying percentages until he *788 left the defendants’ employ in 1998. 19 Accordingly, we conclude that the payroll plans complied adequately with the written authorization requirement of § 31-71e (2). 20

B

We next address the plaintiffs’ claim that they are entitled to damages under the wage statutes because the deductions were not “on a form approved by the commissioner” of the department, as is required by § 31-71 e (2). The plaintiffs rely on Engle v. Personnel Appeal Board, 175 Conn. 127, 394 A.2d 731 (1978), and contend that this portion of the statute is a mandatory provision, which “invalidates any wage deductions that resulted from the use of an unapproved form.” In *789 response, the defendants contend that their failure to seek the department’s approval of the form does not invalidate the deductions because the violation did not fall within the scope of General Statutes § 31-72, 21 which affords employees a private right of action for the failure to pay wages. The defendants also argue that the statute is directory, rather than mandatory, because it is drafted in affirmative, rather than negative terms, and does not explicitly provide a penalty or a right of action for noncompliance, or provide guidance for the department’s decision to approve or deny a particular form. We agree with the defendants, and conclude that this portion of § 31-71e (2) is directory.

We begin by noting that the narrow question presented by this aspect of this case is whether the failure to obtain the department’s approval of a wage deduction form invalidates and requires a refund of the deductions, even when, as we concluded in part II A of this *790 opinion, the written authorization itself is legally sufficient. The language of § 31-71e provides in relevant part: “No employer may withhold or divert any portion of an employee’s wages unless ... (2) the employer has written authorization from the employee for deductions on a form approved by the commissioner . . . .” The key, then, is whether the requirement that the commissioner approve of the form is mandatory or directory, which raises a question of statutory interpretation. See General Statutes § l-2z.

“The test to be applied in determining whether a statute is mandatory or directory is whether the prescribed mode of action is the essence of the thing to be accomplished, or in other words, whether it relates to a matter of substance or a matter of convenience. ... If it is a matter of substance, the statutory provision is mandatory. ... If, however, the . . . provision is designed to secure order, system and dispatch in the proceedings, it is generally held to be directory . . . .” (Citation omitted; internal quotation marks omitted.) Teresa T. v. Ragaglia, 272 Conn. 734, 746, 865 A.2d 428 (2005). Linguistically, a statutory provision generally is considered directory if “the requirement is stated in affirmative terms unaccompanied by negative words.” 22 (Internal quotation marks omitted.) Lostritto v. Community Action Agency of New Haven, Inc., 269 Conn. 10, 19, 848 A.2d 418 (2004); see also Santiago v. *791 State, 261 Conn. 533, 534 n.1, 540, 804 A.2d 801 (2002) (relying on negative language, specifically, “ ‘[n]o appeal may be taken from a judgment denying a petition for a new trial’ ” without judicial certification, as well as statute’s policy objective of avoiding frivolous appeals, in concluding that General Statutes § 54-95 [a] appeal certification requirement is mandatory). Furthermore, the lack of a penalty provision or invalidation of an action as a consequence for failure to comply with the statutory directive is a significant indication that the statute is directory. See, e.g., Teresa T. v. Ragaglia, supra, 746-47 (“[t]he absence of a penalty if the commissioner fails to invoke the ninety-six hour hold after making a finding of probable cause further suggests that [General Statutes] § 17a-101g [c] does not impose a mandatory duty”); United Illuminating Co. v. New Haven, 240 Conn. 422, 466, 692 A.2d 742 (1997) (statute directory because “although [it] uses the word, ‘shall,’ there is no language expressly invalidating a defective notice”); Crest Pontiac Cadillac, Inc. v. Hadley, 239 Conn. 437, 446-47, 685 A.2d 670 (1996) (“Neither [General Statutes] § 4-180 [c] nor [General Statutes] § 4-183 [c] contains language that would invalidate an action that failed to comply strictly with the mailing provisions of § 4-180 [c]. This omission indicates a legislative intent that the provisions operate to secure order, system and dispatch in the proceedings.”).

The statute at issue in this case is drafted at least partially in negative language, which supports the plaintiffs’ argument. 23 See General Statutes § 31-71e (“[n]o *792 employer may withhold or divert any portion of an employee’s wages unless ... [2] the employer has written authorization from the employee for deductions on a form approved by the commissioner” [emphasis added]). The statute does not, however, expressly invalidate deductions made on unapproved forms, and the only penalty provision that arguably is implicated by the failure to seek department approval is General Statutes § 31-71g, 24 which does not invalidate the transaction, but provides merely for fines, a term of imprisonment or both. 25 Even the applicability of § 31-71g is doubtful, however, because even the most minor penalties available under that statute contemplate the presence of “unpaid wages,” a predicate not present herein, inasmuch as the plaintiffs gave knowing and voluntary consent to specific deductions from the gross wages owed to them. See General Statutes § 31-71g (“[a]ny employer *793 or any officer or agent of an employer or any other person authorized by an employer to pay wages who violates any provision of this part may be . . . [4] fined not less than two hundred nor more than five hundred dollars or imprisoned not more than three months or both for each offense if the total amount of all unpaid wages owed to an employee is five hundred dollars or less” [emphasis added]). Indeed, those employees who intelligently elected to participate in the plans and adhered to their terms by maintaining their employment until the restricted shares vested received the benefits of discounted shares, as well as a tax deferral. Thus, a review of the statutory language, which lacks a provision holding deductions on unauthorized forms invalid per se, indicates that the department approval requirement is directory. 26

*794 Moreover, as the defendants point out, an interpretation of § 31-71 e requiring the automatic invalidation and refund of any wage deductions made on unapproved forms conceivably could result in unwarranted windfalls for employees, such as in the hypothetical posited by the defendants of an employer deducting money from an employee’s paycheck to pay for homeowner’s insurance offered as a voluntary employee benefit. Invalidating and requiring a refund of those deductions based on the employer’s failure to seek the department’s approval of the form would give the employee the windfall of free insurance. Although it is well established that the wage collection statutes are “remedial in nature,” namely, intended “to prevent the employer from taking advantage of the legal agreement that exists between the employer and the employee”; Mytych v. May Dept. Stores Co., supra, 260 Conn. 160-61; and should be construed liberally in the employees’ favor; see, e.g., Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210, 240, 828 A.2d 64 (2003); that construction does not require windfalls for technical violations. Accordingly, we conclude that the defendants’ failure to seek the department’s approval of the plan election form does not, by itself, require the invalidation of the authorized payroll plan deductions.

The certified question is answered in the negative.

No costs will be taxed in this court to either party.

In this opinion the other justices concurred.