NO. 89-231 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

IN THE MATTER OF THE WAGE CLAIM OF 

FREDERICK C. HOLBECK, 

Claimant and Respondent, 

-vsSTEVI-WEST, INC., 

Respondent and Appellant. 

APPEAL FROM: ~istrict Court of the Fourth ~udicial ~istrict, 

In and for the County of ~avalli, 

The Honorable Jack L. Green, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Noel K. ~arrivee, Missoula, Montana 

For Respondent : 

Melanie Symons, Dept. of Labor & Industry, Helena, 

Montana 

Filed: 

Submitted on ~riefs: Aug. 31, 1989 

Decided: December 1, 1989 * 

'Clerk ' .."* 
Justice William E. Hunt, Sr. , delivered the Opinion of the 

Court. 

The Department of Labor and Industry (DOLI) issued an 

order directing appellant, Stevi-West, Inc., to pay overtime 

wages of $3,288 and a statutory penalty of $3,288 to its 

former employee, Frederick C. Holbeck. The ~istrict Court of 

the Fourth Judicial ~istrict, ~avalli County, affirmed the 

DOLI order. Stevi-West appeals. We affirm. 

Stevi-West presents three questions for our 

consideration: 

1. Was ~rederick Holheck an executive employee within 

the meaning of S 39-3-406(1) (j), MCA, and, therefore, exempt 

from overtime compensation? 

2. Did Frederick Holbeck provide sufficient and 

accurate substantiation of his overtime hours? 

3. Did the District Court err in failing to allow 

Stevi-West to present additional evidence? 

In October, 1985, Stevi-West, Inc., owned primarily by 

Tom and Karen Bauer, opened an eight-lane bowling center, 

lounge and snack bar in Stevensville. A few months prior to 

the opening, the Bauers hired Dave Sears to manage the 

center. In August, 1985, Sears hired the claimant, ~rederick 

Holbeck, under an oral employment agreement. 

Holbeck's primary duties included attending the customer 

service counter, working on the automatic pinsetting machines 

and maintaining the bowling alleys. He also performed 

janitorial chores, drilled balls, organized leagues, promoted 

the alleys, instructed bowlers and closed the center after 

work hours. 

~tevi-west initially paid Holbeck $1,300 per month. In 

June, 1986, after the manager, Sears, was laid off, Holbeck's 
wages increased to $1,600 per month. In October, 1986, his 

wages again increased, this time to $1,900 per month. On 

December 31, 1986, Holbeck resigned from his position for 

personal reasons. 

On February 19, 1987, Holbeck filed a claim with the 

DOLI to collect overtime wages from stevi-west. After a 

hearing, the DOLI hearings officer entered findings of fact, 

conclusions of law and an order requiring stevi-west to pay 

Holbeck $3,288 as overtime wages due and owing and $3,288 as 

a statutory penalty. 

Stevi-West petitioned for judicial review. ~ollowing 

briefing of the issues, the ~istrict Court affirmed the DOLI 

order. Stevi-West appealed to this Court. 

The standard of review of an agency decision is 

delineated at S 2-4-704, MCA, as follows: 

(2) The court may not substitute its judgment for 

that of the agency as to the weight of the evidence 

on questions of fact. The court may affirm the 

decision of the agency or remand the case for 

further proceedings. The court may reverse or 

modify the decision if substantial rights of the 

appellant have been prejudiced because: 

(a) the administrative findings, inferences, 

conclusions, or decisions are: 

(v) clearly erroneous in view of the reliable, 

probative, and substantial evidence on the whole 

record; 

(vi) arbitrary or capricious or characterized by 

abuse of discretion or clearly unwarranted exercise 

of discretion. 

Thus, judicial review of factual matters is limited. 

The reviewing court will not overturn an agency's findings of 

fa.ct unless they are clearly erroneous. Facts supported by 
substantial credible evidence are not clearly erroneous. 

City of Billings v. Billings iref fighters Local No. 521 

(1982), 200 Mont. 421, 430-31, 651 P.2d 627, 632. 

Judicial review of legal issues is somewhat broader. 

The reviewing court will reverse an agency's legal 

conclusions if they are characterized by an abuse of 

discretion. ~illings Firefighters, 200 Mont. at 431, 651 

P.2d at 632. 

The first question raised on appeal is whether Holbeck 

was an executive employee within the meaning of S 

39-3-406 (1) (7) , MCA, and, therefore, exempt from overtime 

compensation. 

Generally, an employee is entitled to overtime 

compensation for any hours worked in excess of 40 per week. 

Section 39-3-405(1), MCA. Among the employees excluded from 

this general rule are those employed in a bona fide executive 

capacity. section 39-3-406 (1) (j) , MCA. A bona fide 

executive is defined in 5 24.16.201, ARM, which provides: 

(1) The term "employee employed in a bona fide 

executive * * * capacity" in section 39-3-406 (1) (j) 

MCA of the Montana ~inimum Wage and Overtime 

compensation Act shall mean any employee: 

(a) Whose primary duty consists of the management 

of the enterprise in which he is employed or of a 

customarily recognized department or subdivision 

thereof; - and 

(b) Who customarily and regularly directs the work 

of two or more other employees therein; and 

(c) Who has the authority to hire or fire other 

employees or whose suggestions and recommendations 

as to the hiring or firing and as to the 

advancement and promotion or any other change of 

status of other employees will be given particular 

weight; - and 
(d) Who customarily and regularly exercises 

discretionary powers; and 

(e) Who does not devote more than 20 percent or in 

the case of an employee of a retail or service 

establishment who does not devote as much as 40 

percent, of his hours of work in the workweek to 

activities which are not directly and closely 

related to the performance of the work described in 

subsections (a) through (d) of this section. 

(Emphasis added.) 

Before an individual will be deemed an executive 

employee exempt from overtime compensation, the employer must 

prove each of the elements of the above regulation. Rosebud 

County v. Roan (Mont. 1981), 627 P.2d 1222, 1228, 38 St.Rep. 

639, 646. In this case, ~tevi-west has failed to meet its 

burden. 

Substantial credible evidence supports the DOLI hearings 

officer's finding that Holbeck did not act in a managerial 

capacity. Although Holbeck was hired to assist the manager, 

Sears, the evidence demonstrates that his primary 

responsibilities related to customer service and maintenance 

of the bowling lanes and equipment. After Sears was laid 

off, Holbeck's responsibilities remained the same. The 

owners themselves, rather than Holbeck, filled the managerial 

void left by Sears' departure. 

Few factors indicate that Holbeck held a managerial 

position. He was not given the authority to make major 

business decisions. He did not schedule employees or set pay 

rates. He did not handle money except to collect it from 

customers at the customer service counter and to put it in 

safekeeping on the nights he closed the center. He was not 

responsible for any business recordkeeping. Apart from 

arranging for the exchange of free bowling for help from high 

school students, he did not hire or fire employees. He had 

little input regarding hiring, firing or promoting employees. 
Clearly, the record demonstrates that Stevi-West failed 

to prove elements (a) , (b) , (c) and (el of S 24.16.201, ARM. 

Consequently, Stevi-West failed to show that Holbeck was 

exempt from overtime compensation. The District Court did 

not err in affirming the DOLI order. 

The second issue is whether Holbeck provided sufficient 

and accurate substantiation of his overtime hours. 

The employer is required to record the hours worked by 

its employees. Garsjo v. Department of Labor and Industry 

(1977), 172 Mont. 182, 188-89, 562 P.2d 473, 476. If the 

employer fails to record the employee's hours, the employee's 

records may be used to determine the amount of time worked. 

The employee's records, however, need not be precise. The 

employee may substantiate his claim by proving "that he has 

in fact performed work for which he was improperly 

compensated and [producing] sufficient evidence to show the 

amount and extent of that work as a matter of just and 

reasonable inference. " ~arsjo, 172 Mont. at 189, 562 P. 2d at 

476 (quoting Anderson v. Mt. Clemens Pottery Co. (1946), 328 

U.S. 680, 687, 66 S.Ct. 1187, 1192, 90 L.Ed. 1515, 1523.) 

In the present case, ~tevi-west did not track the hours 

worked by Holbeck. Holbeck began recording his hours in 

October, 1986. To substantiate his claim prior to that time, 

he submitted exhibits reconstructing the approximate number 

of hours worked. The exhibits were based on weekly 

schedules, seasonal duties and common practice. Both Holbeck 

and the former manager, Sears, testified in support of the 

exhibits. Under the circumstances, substantial credible 

evidence supported the finding that Holbeck should be 

compensated for the hours reconstructed in the exhibits. 

~tevi-west also claims that Holbeck should not be 

compensated for overtime hours because he spent much of his 

time bowling while on duty. Testimony offered at the hearing 
indicated that much of the time Holbeck spent bowling was 

work related. Furthermore, Tom Bauer testified that he knew 

Holbeck bowled while working. As long as Bauer permitted 

Holbeck to bowl while on duty, Holbeck must be properly paid, 

even if the pay includes overtime compensation. 

The last issue is whether the ~istrict Court erred in 

failing to allow stevi-west to present additional evidence. 

After it petitioned for judicial review, ~tevi-west 

filed a motion to present additional evidence. Although the 

District Court granted the motion, the order was buried in 

the court record. The order was not served on stevi-West or 

noted on the court docket. Nor was the matter set for 

hearing. Nonetheless, we do not remand for further 

proceedings. 

The statute governing receipt of additional evidence 

provides : 

If, before the date set for hearing, application is 

made to the court for leave to present additional 

evidence and -- it is shown to the satisfaction of the .. - - -- court - that -- the addltlonal evidence is material and 

that there were good reasons for faizre - to present 

--- it in the proceedins before the agency, the court 

may order that the additional evidence be taken 

before the agency upon conditions determined by the 

court. The agency may modify its findings and 

decision by reason of the additional evidence and 

shall file that evidence and any modifications, new 

findings, or decisions with the reviewing court. 

(Emphasis added. ) 

section 2-4-703, MCA. 

The evidence sought to be introduced by ~tevi-west 

consisted of testimony of three individuals employed by the 

bowling center concerning the number of employees supervised 

by Holbeck. Even if the testimony were persuasive, it would 

not be material to the action because it t~ould affect only 

one of the six required elements of S 24.16.201, ARM. The 
result would not differ. Holbeck's classification would not 

change to that of an exempt executive employee. He would 

still be eligible for overtime compensation. 

Stevi-West also sought to introduce the testimony of 

Karen Bauer, one of the owners of the bowling center, who was 

not present at the administrative hearing. Although Karen's 

testimony regarding Holbeck ' s alleged managerial 

responsibilities and the number of hours he worked would be 

material to the outcome of this case, Stevi-West did not 

present good cause for its failure to introduce this evidence 

at the original hearing as is required by S 2-4-703, MCA. In 

his affidavit supporting the motion to present additional 

evidence, Stevi-West's attorney stated only that Karen was 

unavailable to attend the hearing. While such a conclusory 

assertion may be sufficient to show good cause for the 

failure of a disinterested witness to attend an agency 

hearing, it is insufficient when the witness is one of the 

owners of the entity that requested the hearinq in the first 

place. 

Stevi-West does not allege, nor does the record show, 

that it was given insufficient notice of the time and date of 

hearing. In fact, the administrative record demonstrates 

that the notice of the ~pril 20, 1988 hearing was mailed on 

March 14, 1988. Under the circumstances, we cannot say that 

Stevi-West has shown good cause for its failure to present 

Karen's testimony during the administrative hearing. 

~ff irmed.