No. 80-236 

IN THE SUPFW!lE COURT OF THE STATE OF MONTANA 

1980 

ROSEBUD COUNTY, Montana a body 

Politic and Corporate, 

Petitioner and Respondent, 

LYNDON W. ROAN and LABOR STANDARDS 

DIVISION, Department of Labor & 

Industry, State of Montana, 

Respondents and Appellants. 

Appeal from: District Court of the Sixteenth Judicial District, 

In and For the County of Rosebud, Montana 

Honorable Alfred B. Coate, Judge presiding. 

Counsel of Record: 

For Appellants: 

Lucas and Monaghan, Miles City, Montana 

A. Lance Tonn argued, Miles City, Montana 

James Gardner, Jr. argued, Dept. of Labor, Helena, 

Montana 

For Respondent: 

John S. Forsythe argued, County Attorney, Forsyth, Montana 

Submitted: November 24, 1980 

Decided: hP!? 30 19BI 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

Lyndon Roan, a wage claimant, and the Department of 

Labor and Industry, appeal the decision of the Rosebud 

County District Court which reversed a ruling of the Department awarding Roan overtime pay as an employee of Rosebud 

County, and also reversing the penalty award for failure to 

pay the overtime. 

Lyndon Roan left the employ of Rosebud County on January 

17, 1979. On February 3, 1979, he filed a claim with the 

Department of Labor and Industry alleging that Rosebud 

County failed to pay him for 426.75 hours worked as overtime. 

At the hearing on June 21, 1979, Roan reduced his claim to 

358 overtime hours. The hearings officer ruled that Roan 

had worked and was entitled to 277.25 hours worked as overtime 

between February 1, 1978 and August 21, 1978. The hearings 

officer also ruled that Roan's position with the County did 

not exempt the County from the duty to pay him overtime, 

although he ruled that from August 21, 1978 until the end of 

his employment, Roan was a bona fide executive and the 

County had no duty to pay him overtime. Under section 39-3- 

206, MCA, the hearings officer also ruled that the County 

must pay the penalty in the amount of the overtime wages 

owed. The overtime amounted to $2,606.50 and the penalty was 

$2,606.50, and this combined amount was awarded to Roan. 

The County appealed this decision to the Rosebud County 

District Court and there obtained a reversal of the Department's 

ruling. The County alleged in District Court that Roan's 

method of keeping track of his overtime hours was inadmissible 

as a matter of law and that absent this evidence, the award 

of overtime could not be sustained. The County also alleged 
that the penalty was improper as a matter of law, in essence 

arguing that the County acted in good faith and therefore 

was not subject to the penalty provision. 

The District Court ruled that the calendar on which 

Roan kept track of his overtime hours was properly admitted 

at the agency hearing to prove his overtime hours. It also 

appears that the District Court found nothing wrong with the 

method by which Roan proved the overtime hours worked. But 

the District Court nonetheless ruled on three separate 

grounds that Roan was not entitled to collect overtime pay. 

Although not necessary to its decision reversing the award 

of overtime, the District Court also ruled that the County 

had acted in good faith, and therefore, that the penalty 

provision under section 39-3-206, MCA, cannot be enforced. 

We attempt here to summarize the District Court's 

rulings that Roan cannot collect overtime. First, the trial 

court ruled that Roan failed to demand the overtime at the 

time he did the work and that he failed to fill out the 

overtime forms, and therefore is precluded from collecting 

overtime. Second, Roan cannot collect overtime because 

"there is no evidence that the employer ever demanded, 

requested or even suggested that the employee work any 

overtime . . ." On this ground, the District Court ruled 

that because Roan had never been directed to work the overtime 

hours, and in doing it anyway Roan had illegally created his 

own employment contract. Third, without analyzing the required 

factors, the District Court ruled that Roan was at all times 

a bona fide executive and therefore, exempt from application 

of the overtime laws. Fourth, although not necessary to its 

decision, the District Court ruled that the County did not 

have to pay the statutory penalty under section 39-3-206, MCA, 

because the coun'ty had acted in good faith. 
Both Roan and the Department of Labor and Industry 

appeal from these rulings reversing the order of the agency. 

The County also alleges that the trial court erred in ruling 

that Roan's calendar was properly admitted to prove overtime 

hours. We note that when the County appealed to the District 

Court, Roan also appealed from the ruling of the hearings 

officer that Roan became a bona fide executive on August 21, 

1978 and therefore could not collect overtime wages between 

then and January 17, 1979, when his employment ended. But 

Roan does not raise this issue in this appeal. 

Roan's status as an employee of Rosebud County centers 

around three time periods: First, from February 1, 1978 to 

March 14, 1978, when he was employed as a mechanic and was 

paid a monthly salary of $1,022 per month. He was one of 

two mechanics in the shop and he was supervised by Virgil 

Ferris, the county road foreman. Second, from March 14, 

1978 to August 21, 1978, when Roan acted as foreman of the 

county shop and supervised,to an extenbthe work of one 

mechanicrand also supervised 20 to 25 percent of the time 

of a secretary who divided her time between county shop matters 

and county road foreman matters. Roan's salary as foreman 

was increased by $50 per month to $1,072 per month on April 

1, 1978 and on July 1, 1978, Roan's salary was increased 

another $50 per month to $1,122 per month. His salary increase 

amounted to a 5 percent higher salary than the other mechanic 

who worked in the shop. Third, the period between August 21, 

1978, when a third mechanic started working in the county 

shop, and January 17, 1979, when Roan's employment ended. 

The hearings officer ruled that Roan was not a bona 

fide executive until August 21, 1978, and therefore that 

between February 1, 1978 and August 21, 1978, the County 
owed him overtime for all overtime hours worked during this 

period. The District Court's ruling is unclear as to when 

Roan became a bona fide executive, but it is clear to the 

extent that Roan was effectively declared a bona fide executive 

for all of the time periods in which he claimed overtime. 

Lyndon Roan started working for Rosebud County in 

November 1977 when he was hired as a truck driver. His 

employment ended on January 17, 1979. As a truck driver, he 

was paid an hourly wage plus time and a half for overtime. 

Three months later, on February 1, 1978, the county commissioners hired him as a mechanic and changed his pay to a 

monthly salary. Roan was then one of two mechanics in the 

shop who had the duty of maintaining about 75 vehicles and 

assorted pieces of heavy machinery belonging to the County. 

The repair shop also housed the office and general headquarters 

of the road and bridge supervisor. Roan and the other 

mechanic worked under the direction of the road foreman. 

Roan started at a salary of $1,022 per month. 

Because the County had a policy of not paying overtime 

to salaried employees, the County did not keep hourly records 

for salaried employees. Salaried employees, including Roan, 

were required to sign a handful of blank time sheets and the 

payroll clerk later filled in these time sheets--apparently 

to the effect that each salaried employee worked a 40-hour 

week. The county commissioners were aware of and approved 

of this procedure. Roan, however, kept a record of his 

overtime hours by writing them on a calendar he kept at 

home. He did so because he thought he would still be paid 

overtime even though he was a salaried employee. 

Within two or three months of starting work as a mechanic 

on salary, Roan asked the county commissioners to be paid 

for his overtime. He was told that the County did not pay 
overtime to salaried employees. Later, he gave one of the 

county commissioners a list of the overtime hours worked, 

but still the County did not pay him. Roan continued as a 

fulltime mechanic until March 14, 1978. 

On March 14, 1978, the county commissioners created the 

job of shop-foreman and hired Roan. They gave him a $50 per 

month salary increase which put his salary 5 percent above 

the other mechanic in the shop. The shop foreman was in charge 

of all mechanic work in the shop. Although Roan started as 

shop-foreman on March 14, his salary increase did not become 

effective until April 1. 

After his appointment as shop-foreman, Roan's day-today activities did not change much. He supervised to an 

extent, the other mechanic in that he told him which equipment to work on, but both mechanics independently ordered 

parts as needed. They had no discretion where they purchased 

parts; the county commissioners told them where to purchase 

them. 

Roan had no power to hire and fire, although on one or 

two occasions, the commissioners may have relied in part on 

Roan's recommendation when more help was hired for the 

county road department. In addition to supervising somewhat 

the work of the other mechanic, Roan also supervised the 

work of a secretary who spent 20 to 25 percent of her time 

on shop-related work. The remaining 75 to 80 percent of her 

time was spent on county road department matters and she was 

directed by Virgil Ferris, the county road foreman. 

During times of equipment breakdown or bad weather, 

road crew employees stayed at the county shop and did minor 

repair and mechanical work on their equipment. But Roan had 

no control over these employees; the county road foreman 
directed their activities. 

This situation continued until August 21, 1978, when 

the county commissioners hired a third mechanic for the 

shop. It was only then that Roan actually began supervising 

the work of at least two mechanics and devoting more than 50 

percent of his time to supervisory work rather than mechanic 

work. Roan continued to direct 20 to 25 percent of the 

secretary's time. Roan's employment with Rosebud County 

ended on January 17, 1979. 

In early February 1978, Roan filed with the Department 

of Labor and Industry, an overtime wage claim against the 

County. For the period between. February 1, 1978 and March 

14, 1978, the hearings officer ruled that Roan was a fulltime 

mechanic and was entitled to overtime for this period. For 

the period between March 14, 1978 and August 21, 1978, the 

hearings officer ruled that although Roan was a foremanmechanic with some management functions, he was not a bona 

fide executive within the meaning of the regulations and was 

also entitled to overtime pay for this period. But for the 

period between August 21, 1978 and January 17, 1979, the 

period during which a third mechanic worked in the shop, the 

hearings officer ruled that Roan was a bona fide executive 

and was not able to collect overtime. The hearings officer 

ordered that Roan be paid for 277.25 overtime hours, which 

translated into $2,606.50, and also ordered the County to 

pay the statutory penalty in the same amount, as provided 

for in section 39-3-206, MCA. 

We emphasize first that the trial court impliedly 

upheld the sufficiency of the evidence to establish the 

number of overtime hours worked. Roan introduced a calendar 

into evidence which contained his record of overtime hours 

worked during his employment with the County. In addition, 
several witnesses supported his testimony that he worked 

overtime. The trial court, over the Court's objection, 

upheld the introduction of this calendar into evidence. The 

County now asks us to reverse the District Court on this 

ruling. The ruling was correct. Where the employer fails to 

keep adequate records of an employee's hours, it is permissible 

for the employee to introduce his own evidence of the hours 

worked. Garsjo v. Dept. of Labor and Industry (1977), 172 

Mont 182, 189, 562 P.2d 473, 476. There we set out the 

policy on introduction of employee evidence to support a 

wage claim, and this case creates no violation of that 

policy. The testimony and evidence was clearly admissible. 

The first ground on which the trial court reversed 

the agency ruling appears to be because Roan had not filed 

an overtime pay claim with the County for each pay period 

and because he did not claim any overtime until the end of 

his employment with the County. We are aware of no law 

(and the trial! court cited none) that permits such a ruling. 

The trial court cited regulation M.A.C. section 24-3.14BII(38) 

-S14320 (2) (1979), now A.R.M. 24.16.2505 (2) , in support of 

its ruling, but did not say what it is or attempt to apply 

it to the facts. This regulation states only when overtime 

must be paid by the employer, but it does not make liability 

for overtime compensation contingent on the employee submitting 

records of time worked. It does not support the trial court's 

ruling cutting off liability for overtime because a claim 

was not submitted. 

Furthermore, the trial court cited and quoted from 

cases that do not support the trial court's ruling. See, 

Gahagan v. Gugler (1935), 100 Mont. 599, 52 P.2d 150; ~irtz 

v. Harrigill (S.D. Miss. 1963), 214 F.Supp. 813; Jackson v. 

Derby Oil Co. (1943), 157 Kan. 53, 139 P.2d 146. These 
cases discuss recordkeeping requirements of employers and 

employees and have nothing to do with the proposition for 

which they are cited. 

The duty of the employer to keep a record of an employee's 

time is set out in regulation M.A.C. section 24-3J4BII(50)- 

S14670 (1979), now A.R.M. section 24.16.61(01). The County 

claims it did not keep a record of Roan's hours worked 

because it did not pay overtime to salaried employees and so 

there was no need to keep the records. But the duty to keep 

records is that of the employer and the employer fails to 

keep the records at its own peril. If it later turns out 

that the employer is exempt from recordkeeping requirements, 

that is one thing; but it is yet another if it turns out 

that the employer thought he was exempt but in fact has not 

exempt. Here, the County attempted to qualify Roan as a 

bona fide executive and therefore exempted itself from 

recordkeeping requirements as well as a duty to pay overtime. 

But the County was wrong. 

Although the issue was not raised by the parties in the 

appeal to the District Court from the agency ruling, the 

second ground on which the court reversed the agency order 

is because "there is no evidence that the employer ever 

demanded, requested or even suggested that the employee work 

any overtime except for Exhibit E at p. 5 [not involved in 

the issues on appeal.]" The court cited and paraphrased 

regulation M.A.C. section 24-3.14BII(14)-S14040 (1979), now 

A.R.M. section 24.16.1002, to the effect that "hours worked" 

must be shown by the employee as hours that he "is - required 

------ to be on duty on the employer's premises." (Emphasis added.) 

In effect, the District Court reversed the agency ruling 

because Roan had not proved at the hearing that the County 
had ordered him to work overtime, even though that was never 

an issue before the agency. The court ruled that Roan 

worked the overtime hours to suit his own convenience rather 

than to further the demands of his employer. 

The County neither raised this issue before the hearings 

officer nor in its appeal to the District Court from the 

agency ruling. Although the District Courts do not have to 

blind themselves to issues not raised by the parties, we do 

not think this is the kind of issue on which a reversal 

should be grounded if it was not raised before the hearings 

officer or before the District Court by the County. It is 

unfair to permit the County to take advantage of this ruling 

where it never raised the issue in the first instance. We 

hold, therefore, that the County waived any right to take 

advantage of this ruling by not first raising it before the 

hearings officer. 

Aside from the waiver holding, the record establishes 

that the County knew Roan was working overtime and that Roan 

had to work overtime to get the mechanic work done. If he 

did not on many occasions come to work an hour earlier in 

the morning and leave work an hour later in the evening, the 

equipment would not have been ready for the road crew when 

they arrived at 8:00 a.m. The demands of the job required 

that Roan work overtime. The county commissioners knew that 

Roan worked overtime and at no time directed him to stop 

working overtime; they were quite willing to reap the 

benefits of Roan's overtime work, but balked only when he 

asked to be paid. We cannot adhere to a rule as imposed by 

the District Court which arbitrarily denies overtime unless 

the employer expressly ordered the employee to work overtime. 

Such a rule would effectively defeat many legitimate overtime 

wage claims. 
Here, two mechanics were required to maintain a fleet 

of 75 pieces of equipment. Roan felt that his supervisors 

required him to do all things necessary to keep this equipment 

running. His early arrival and late departure from work was 

his effort to fulfill the terms of his employment rather 

than an attempt to create his own employment contract. The 

third mechanic, who was hired on August 21, 1978, testified 

that he came to work early in the morning so he could do the 

mechanical work needed to have the equipment ready by 8:00 

a.m. when the road crew operators came to work. To offset 

this 7:00 a.m. arrival, the third mechanic left work an hour 

earlier in the afternoon. But until the third mechanic was 

hired, Roan performed this early morning function as well as 

often remaining after 5:00 p.m. in the evening. The county 

commissioners did not object to Roan putting in the extra 

time to keep the equipment operating; their objections came 

only when he claimed compensation for these compensation 

hours. Under these circumstances, the commissioners are in 

no position to complain. They willingly reaped the benefit 

of Roan's overtime hours. 

The trial court's ruling on whether Roan was a bona 

fide executive is also difficult to understand. It appears 

to be a two part ruling: First, that Roan should be judged 

on the "sole charge" exception set out in regulation M.A.C. 

section 24-3.14BII (2) -S1450 (13) (1979) , now A.R.M. section 

24 .I6204 (13). But assuming the trial court to be correct, 

it did not explain why Roan fit into this "sole charge" 

classification. Further, the trial court neglected to 

apply the remaining criteria of the regulation which still 

must be satisfied before one can be classified as a bona 

fide executive. 
Second, the trial court ruled that the supervision of 

other employees requirement in the regulation, is satisfied 

if the employee "had two employees under his supervision" 

and that it did not have to be the same two employees. It 

appears the court ruled that Roan supervised a mechanic and 

a parttime secretary, and therefore, fulfilled this requirement. 

The trial court properly quoted the test to be whether the 

employee's duties "includes the customary and regular direction 

of the work of two or more other employees therein . . ." 

But, in ruling that Roan fit the test, the court ignored 

another regulation further defining this test. Regulation 

M.A.C. section 24-3.14BII(2)-S1450(5) (1979), now A.R.M. 

section 24.16.204(5), requires that the employee must "customarily and regularly supervise - at least two fulltime 

employees -- or the equivalent." Until August 21, 1978, when 

the third mechanic was hired, Roan did not meet this requirement. 

Further, assuming that Roan did supervise at least 

"two fulltime employees or the equivalent", he still could 

not be classified as a bona fide executive because regulation 

M.A.C. section 24-3.14BII(2)-S1450(3) (1979), now A.R.M. 

section 24.16.204(3), further requires that this supervision 

be the primary duty of the employee. The testimony establishes 

that until August 21, 1978, Roan devoted less than 50 percent 

of his time to management responsibilities; that is, he 

devoted more than 50 percent of his time to his own work as 

a mechanic. Until August 21, Roan's secondary duty was 

management and his primary duty was work as a mechanic. 

Still another reason we must reverse the District Court 

is because it applied the "short test" but should have 

applied the "long test" in determining whether Roan was a 
bona fide executive. Both tests are in regulation M.A.C. 

section 24-3.14BII (2) -S1420 (1979) , now A.R.M. section 

24.16.201. The "short test" is the last paragraph of this 

regulation and applies if the employee is paid a salary of 

at least $200 per week, exclusive of board, lodging, or 

other facilities . . .I1 Although Roan made well in excess 

of $200 a week in salary, this "short test" is qualified by 

regulation M.A.C. section 24.3.14BII(2)-S1450(19) (b) (1979), 

now A.R.M. section 24.16.204(19) (b), which expressly exempts 

mechanics (among other trades) from the short test "no 

matter how highly paid they may be." Therefore, the short 

test cannot apply to Roan who is a mechanic. 

We note that the hearings officer also erroneously 

applied the "short test" in determining that Roan was not a 

bona fide executive until August 21, 1978. But there was no 

prejudice to the County because the short test is more 

favorable to the employer than is the long test. 

Where the long test applies, in addition to the factors 

set out in the short test, the employer must prove additional 

facts before the employee can be classified as a bona fide 

executive. See, Garsjo, supra, 172 Mont. at 185, 562 P.2d 

at 474-475, where we list the factors in the regulation that 

must be considered. Two factors are common to the long test 

and the short test. First, it must be the primary work of 

the employee to manage and supervise rather than to perform 

the work itself. Second, the employee must customarily and 

regularly direct two or more employees. We have already 

ruled that the employer failed the short test and he also 

must fail the long test for the same reasons. Because the 

employer has clearly failed these two factors in the long 

test, there is no need to set out and apply the additional 
requirements of the long test. 

Finally, we reverse the District Court's ruling that 

the penalty provision of section 39-6-206, MCA, does not 

apply. The opinion is again unclear, but seems to be primarily 

based on the court's conclusion that the County acted in 

good faith and therefore the penalty cannot be imposed. The 

court cited and quoted from Glick v. State, Montana Dept. of 

Institutions (1973), 162 Mont. 82, 94, 509 P.2d 1, to the 

effect that an employer's demonstration of good faith will 

defeat imposition of the penalty. But, Glick was not a case 

arising under Montana's wage claim statutes; rather, it was 

a case arising under the Fair Labor Standards Act and this 

Act expressly states that liquidated damages need not be 

awarded if the employer is found to be in good faith. On 

the other hand, section 39-3-206 expressly provides that the 

penalty "shall" apply if a violation is found. This statute 

leaves no discretion to determine whether the employer was 

in good faith, because even if the employer was in good 

faith, the finding of a violation requires imposition of the 

penalty. 

It also appears that the District Court ruled that the 

penalty against the County was unjustified for two more 

reasons. First, Roan's claim was unjustified because he 

originally claimed 426.75 overtime hours but at the agency 

hearing on June 21, 1979, he reduced his claim to 358 overtime hours. The court ruled that Roan's initial claim was 

an unjustified claim that there was no duty of the County to 

pay it and therefore the first time there was a demand for 

payment was on June 21, 1979, when Roan reduced his claim to 

358 hours. Second, the court ruled that section 7-6-2421, 

MCA, provides the only method for collecting claims against 

a county and Roan had not filed a claim for overtime pay on 

a proper claim form, nor had the County rejected the claim. 

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Therefore, the court ruled that "the award of a penalty 

against the County is unjustified." 

We know of no law exempting the County from having to 

pay a penalty for failure to pay overtime, and that is 

precisely the effect of the trial court's ruling. Roan 

properly filed an overtime claim with the Department of 

Labor and Industry--the Department ruled in his favor and 

awarded him overtime and the statutory penalty. Section 39- 

3-206, MCA makes no exceptions for failure to pay wages and 

we will not create one by holding either that the employer 

was in good faith or that Roan had not properly followed the 

procedure for processing a claim against the County. The 

wage and hour laws of this state do not require an employee 

to exhaust his remedies against the county government before 

he can file a wage claim with the Department of Labor and 

Industry or by filing a claim directly in District Court. 

The decision of the District Court is reversed and the 

order of the Department of Labor and Industry is reinstated. 

This cause is remanded to the District Court for further 

proceedings consistent with this op 

ice 

We Concur: 

/chief JustJustices 

to January 5, 1981. 

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