No. 12495 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

STATE OF MONTANA, ex re1 WILMER C. NEISS 

and HELEN M. NETSS, Husband and Wife, 

individually and d/b/a the Carlin Hotel, 

Petitioners, 

DISTRICT COURT OF THE THIRTEENTH JUDICIAL 

DISTRICT OF TIIE STATE OF MONTANA and the 

HONORABLE ROBERT H . WI LSON , Judge thereof, 

and SIDNEY T. SMITH, Commissioner of Labor 

and Industry and HONORABLE ROBERT L. WOODAHL, 

Attorney General of Montana. 

Respondents. 

ORIGINAL PROCEEDING: 

Counsel of Record: 

For Petitioners: 

Berger, Anderson, Sinclair and Murphy, Billings, Montana 

Arnold A. Berger argued, Billings, Montana 

For Respondents: 

Honorable Robert L. Woodahl, Attorney General, Helena, 

Montana 

Jonathan B. Smith argued, Assistant Attorney General, 

Helena, Montana 

Harold F. Hanser, County Attorney, Billings, Montana 

Ernest F. Boschert argued, Billings, Montana. 

Submitted: May 22, 1973 

Decided : JUL 1 0 1973 

Filed: JUL I0 1973 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court, 

This is an original proceeding brought by petitioners Wilmer 

C. and Helen M. Neiss, husband and wife, seeking a writ of supervisory control directed to the respondents to appear and show 

cause why petitionersf motion for summary judgment in the district 

court should not be granted, The district court of the thirteenth 

judicial district, Yellowstone County, was the original respondent. 

The Montana Commissioner of Labor and Industry and the Montana 

Attorney General were made parties, pursuant to an order of this 

Court. 

The dispute concerns a complaint received by the Montana 

Commissioner of Labor and Industry, hereinafter referred to as the 

Commissioner, regarding alleged failure of petitioners to pay the 

minimum wageas prescribed by statute. Petitioners operate and do 

business as the Carlin Hotel in Billings, Montana, In conducting 

such business, petitioners hire desk clerks and room maintenance 

employees. 

Involved here are four categories of employees: 

1. Two casual employees whose last names are unknown to the 

State of Montana and to petitioners; they are unidentifiable. 

2. Seven employees who did not assign any claim for wages 

to the Commissioner, but settled their own claims with petitioners. 

3. One employee who made complaint to the Commissioner and 

duly assigned such claim. 

4, One employee who asked the county attorney to represent 

her in the action, 

Following the Commissioner's receipt of the one complaint 

in September 1971, he conducted an audit of petitonersf books. 

The audit revealed petitioners had, in fact, failed to pay the 

minimum wage to certain employees. Subsequently the Commissioner 

ordered petitioners to pay the former employees the difference 

between the amount actually paid and the minimum wage. Petitioners 

did not comply. 

-2- 
The Gommissioner then requested the Yellowstone County 

Attorney to institute action against petitioners. Petitioners 

discovered that only one claim of the several mentioned in the 

complaint was assigned to the Commissioner. Petitioners then compromised certain of the claims with some of their former employees 

for amounts less than the amounts due under the minimum wage statute. 

In answering the Commissioner's complaint, petitioners alleged 

satisfaction of the claims, having procured releases from some 

former employees. Petitioners moved the district court for summary 

judgment on the basis of the releases obtained from those certain 

employees, The district court denied petitioners' motion for summary judgment and petitioners now seek a writ of supervisory control in this Court. 

We accept jurisdiction and deny petitioners' request for a 

supervisory writ. The basic issue is whether minimum wage claims 

may be compromised by petitioners and then established as a defense 

to proceedings seeking enforcement of minimum wage laws. Our 

answer is in the negative. 

Section 41-2306, R.C.M. 1947, provides that all actions 

regarding enforcement of minimum wages are commenced in accordance 

with sections 41-1301 through 41-1324, R.C.M, 1947, Two of those 

sections are significant here. Section 41-1314.1, R,C,M. 1947, 

authorizes the commissioner of labor to conduct all operations 

necessary to determine whether any statutory minimum wage provi- -. ,p'g* sions have been violated, Section 41- 3 -2, R.C.M. 1947, provides 

in pertinent part: 

It Whenever the commissioner determines that one or 

more employees have claims for unpaid wages, he shall, 

upon the written request of the employee, take an 

assignment of the claim in trust for such employee, 

and may maintain any proceeding appropriate to enforce 

the claim, including liquidated damages pursuant to this 

act. With the written consent of the assignor, the 

commissioner may settle or adjust any claim assigned 

pursuant to this section," (Emphasis added) 

It is petitioners' position that if the Commissioner, with 

the written consent of the employee, can settle and adjust any 

assigned claim, as the statute authorizes, then the individual may 
settle and adjust his own claim in absence of any assignment, 

petitioners' argument is untenable. The Commissioner has the 

authority to compromise claims because he does so not only for the 

best interest of the claimant, but for the public as well. That 

situation is quite apart from the instance where the party failing 

to pay the minimum wage attempts to compromise the claimant's 

demand. The best interest of neither the public nor the claimant 

is pursued by the party at fault; a compromise sought by the party 

at fault serves only that party. 

In considering the purpose of the Fair Labor Standards Act, 

the United States Court of Appeals, Ninth Circuit, in Wirtz v. 

Malthor, Inc., 391 F.2d 1, 3, sai.d: 

"~t must be remembered that restraining appellees 

from withholding the minimum wages and overtime 

compensation is meant to vindicate a public, rather 

than a private right, and that the withholding of 

i the money due is considered a continuing public 

offense. r I1 

The court then went on to note that the purpose of enforcement 

procedures is twofold: (1) to increase the effectiveness of 

enforcement by depriving the violator of his gain; and (2) to 

protect employers who do comply with the Act from having to 

compete unfavorably with those who do not comply. We find these 

purposes analogous to the declaration of policy embodied in 

section 41-2301, R.C,M, 1947, 

Petitioners urge that the Commissioner's failure to obtain 

assignments from all the claimants proves fatal to the ~ornmissioner's 

authority to act on the claimants' behelf and that those nonassigned 

claims may be settled by the claimants themselves, Again, we do 

not agree. This is a first impression case before this Court, 

In the future this problem can be avoided if the Commissioner 

obtains assignments from all claimants. 

However, since we are dealing with a public right, public 

policy demands the minimum wage shall be paid. Minimum wage provisions exist for the benefit of the whole public and a claimant 

of his own accord may not bargain away his statutory minimum wage. 
It is elementary that a law established for a public reason 

cannot be compromised by private agreement, Section 49-105, R.C.M. 

1947. 

As concerns the first category of employees, listed heretofore, petitioners (employers) complied with the prayer of the 

original complaint and deposited the amount due those unidentifiable 

employees with the district court. Having fully complied with the 

prayer of the state's complaint, there is no penalty or forfeiture 

owing by petitioners. 

As concerns category 2, those who settled their claims for 

less than the minimum wage, we direct that the amount owing between 

the settlement made and the minimum wage be paid into district 

court to be paid over to those employees. These employees having 

been represented by the county attorney, we find the provisions 

for attorney fees and costs provided for in section 41-1322, R.C,M. 

1947, are not applicable. Under the circumstances here, liqui-- 

dated damages are likewise not applicable. 

As concerns category 3 and category 4, the employees who 

brought action either through the Commissioner or county attorney, 

petitioners herein have asserted a counterclaim which must be 

disposed of by the district court, 

petitioners' request for a writ of supervisory control i-s 

denied on the merits. The cause is remanded to the district court 

for whatever further action is necessary, which action shall be 

consistent with the directions provided herein. 

C\/ 

Chief Justice 
Mr, Justice Wesley Castles dissenting: 

I dissent. The fact statement in the majority opinion is 

not complete, The complaint filed by the Commissioner of Labor 

sought payment of underpaid wages, a bond or a cessation of 

business, Defendants complied by settling the claims not represented by the Commissioner and by depositing in the district 

court the amounts due two casual employees neither party was able 

to find. 

A.s to two claimants or employees, one was represented by 

the Commissioner after an assignment; the other merely asked the 

county attorney to represent her. As to these two claimants, 

the defendants filed counterclaims. The validity and good faith 

of the counterclaims we should accept as true at this stage. 

Then and only then, did the Commissioner, without authority as 

to part of the claimants under the statute, assert liquidated 

damages. 

Keep in mind here that we are being asked to accept jurisdiction by way of supervisory control, We accept jurisdiction 

but deny petitioners' request for a supervisory writ and then 

go on to rule on the merits, We have ruled that there is no 

defense. 

Montana statutes state plainly that the Commissioner shall 

take an assignment in trust. With the written consent of the 

assignor, he may settle or adjust. Then,it follows, under our 

statute, the beneficiary or claimant can settle for himself, 

I dissent to the ruling as made here. The majority opinion 

has at least recognized that no penalties should apply, With 

this, I agree, I would grant the writ, 

*. 

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Associate Justice