NO. 82-510 IFJ THE SUPREME COURT OF THE STATE OF MONTANA 1983

INTHE MATTER OF THE WAGE CLAIM OF PERCY HOEHNE

### ,Claimant and Respondent,

SHERRODD, IKC

# ., Appellant and Respondent.

APPEAL FROM: DistrictCourt of theThirteenthJudicial District, Inand fortheCounty of Yellowstone, The Honorable William J. Speare, Judge presiding.

COUNSEL OF RECORD:

For Appellant: Towe, Ball, Enright & Mackey; NeilD. Enright, Billings, Montana

For Respondent: Radovich & Johnson; George Radovich, Billings, Montana Paul Van Tricht, Dept. of Labor & Industry, Helena, Montana

Filed: Submittedon Briefs: June 2, 1983 Decided: August 18,1983

Clerk

### Mr. Chief Justice Frank I. 

### Haswell delivered the Opinion of the Court. Sherrodd, Inc., appeals the Yellowstone County District Court dismissal of its petition for judicial review of the Department of Labor and Industry ruling, awarding Percy Hoehne, respondent and former employee of Sherrodd, overtime compensation plus apenalty. We affirm. Sherrodd was in the business of providing heavy equipment and personnel to operate such equipment to various oil companies. Hoehne was employed by Sherrodd from May 1981until January 1982 to operate heavy equipment at a rate of $10 per hour. During this period of time Hoehne was a Montana residentand Sherrodd was aHontana corporation with itsprincipal place of business in Montana. Hoehne sometimes worked in North Dakota but no actual records were kept indicating the amount of work done there. Hoehne claimed that he accumulated many overtime hours but was not paid the overtime rate for such hours. He filed

a wage claim with the Labor Standards Division of the Montana Department of Labor and Industry and a hearing was held on June 22, 1982. On July 26, 

### 1982, the Department ruled in Hoehne's favor, finding thathe worked 349 overtime hours and awarded him $1,745 in compensated overtime. Further, he was awarded a penalty of $1,745 as the overtime wages had been due in excess of the statutory time period as set forth in section 39-3-206,MCA. Sherrodd timely filed a petition for judicial review of the Department's ruling in Yellowstone County District Court. The Departmentmoved to dismiss the amended petition and on October 29, 1982, the District Court granted the motion on the basis of the agency record. Sherrodd bringsthisappeal and raisestwo issuesfor consideration: 1. Did theCommissioner of theMontana Department of Labor and Industry have jurisdiction to decide the wage claiminquestion? 2. Is the claimant estopped from claiming overtime wages?Sherrodd 

### firstcontends thattheMontana Department of Labor and Industry did not have jurisdiction to rule on Hoehne's wage claim as he often worked in North Dakota. Further, there was no official request from North Dakota authorizing Montana to proceed on Hoehne's wage claim pursuant to section39-3-305, MCA. The Department asserts that it had jurisdiction to enforce Montana laws with respect toHoehne's claimbecause both theemployee and theemployer 

### were residentsof Montana and Sherrodd's principal place of business was within Montana. Further, theemployment contractwas entered into in Montana and part of the work inquestion was performed here. The employer's records did not indicate theamount of work done in each state. Finally, Sherrodd was subject to theFair Labor StandardsAct of 1938 (FLSA) and theDepartment had clear authoritytoenforcethefederalact. The Department of Labor and Industry has a statutory duty to enforce Montana wage laws affecting Montana citizens. Section39-1-102, MCA. The Commissioner of Labor must investigate violations of Montana wage laws and institute actions for unpaid wages. Section 39-3-209, MCA. The commissioner may take assignments of wage claims in trust for the claimant and maintain any proceeding to enforce such claim. Section 39-3-211, MCA.The Department may alsoenforce the provisions of the FLSA, requiringminimum wages and overtimepay. InStatev. Holman Aviation Co. (1978), 176Mont. 31, 575P.2d 923, this Court held that the Departmentmay institute a civilaction

on behalf of employees torecover unpaid overtime wages due under the FLSA. We stated: "The Montana Department of Labor was authorized by both the Montana legislature, through section 41-1314.2, R.C.M. (1947) [section39-3-202, 211, 214(2)(3), MCA], and by the United States Congress, through the FLSA and 29 CFR 515.8, to institute civil actions on behalf of employees 

# . .

# . to recover unpaid FLSA wages." 176at36, 375P.2d at926. In the present 

### case it is clear that the Department

was performing its statutory duty enforcing Montana's wage laws protecting Hoehne, a Montana resident. Such laws regulate Montana corporations, like Sherrodd, and require them to pay minimum and overtime wages. Also, the FLSA protects all citizens and the Department acted within its authority enforcing it here. Statev. Holman Aviation Co., supra. The Montana Department of Labor and Industry acted within its jurisdiction in adjudicating Hoehne's claim for overtimewages. We alsonote thatRule 4(b)(I),M.R.Civ.P., gives the courts of Montana jurisdiction over allpersons within the State of Montana. This is a codification of traditional concepts of jurisdiction that subject allpersons within a state's boundaries to that state's jurisdiction. We hold that under the traditional notions of jurisdiction the Department properly ruled on this claim. All parties resided in Montana and the principal place of business of the employer 

### was in Montana. Accordingly, the courts ofMontana haveproper jurisdiction tohear thiscase. Wealso find that when the legislature delegated judicial power to the Department to decide wage claims it intended that the Department be bound by judicial concepts of jurisdiction. To require an employee to pursue his wage claim in each state he works would unduly burden all parties involved. The employee would have to travel to each state where he worked topursue his claim. Thiswould lead toan oppressive burden on both the employee and the employer in many cases. For example, where a trucker haulscargo through several states to reach his destination, it would require both the employer and the employee to go to each state to have a portion of a claim adjudicated. Each partymay also need witnesses, which most likely reside in the parties' state of residence. Furthermore, as the Department points out, this would fractionalize the employee's claim to such

anextentastomake pursuitof itnotworthwhile. Second, Sherrodd argues that Hoehne is estopped from claiming overtime compensation because he failed to report accumulated overtime hours and did not inform Sherrodd that he expectedovertimepay. Hoehne contends that overtime pay is a statutorily mandated public right. Therefore, it cannotbe waived and an employee cannotbe estopped from claiming it. This Court has held that a person may either, by implication or agreement, waive the advantage of a law intended solelyfor hisbenefit. EarlClack Co. v. Staunton (1937), 105Mont. 375, 72 P.2d 1022; Anaconda Copper Mining Co. v. Ravalli County (1919), 56Mont. 530, 186P. 332; Shea

v. North-Butte Mining Co. (1919), 55 Mont. 522, 179P. 499.

### Conversely, lawswhich are intended toprotect thepublic in general cannotbe waived privately, section 1-3-204, MCA, by either implicationor agreement. Shea, supra. In Kopischke v. First Continental Corp. (1980), Mont. 

## ,610P.2d 668, 37 St.Rep. 437,we determined that public policy requires a used car dealer to inspect the cars he sells and to make sure they are in safe, working condition. This duty, as an expression of public policy, cannot be waived by the use of an "as is" clause in the sales contract. An employee's right to receive overtime pay is established in Montana state law as well as federal law. These laws are expressions of public policy created to protect workers, and restraining those from withholding overtime pay is vindication of a public right rather than a private right. Withholding wages due, such as overtime pay, is considered a continuing public offense. Viirtz v. Malthor, Inc. (9th Cir. 1960), 391 F.2d 1, cited in State ex rel. Neiss v. District Court (1973),162Mont. 324, 511P.2d 979. Since overtime premiums are for the protection and benefit of the general public, private waiver is contrary to public policy. Neiss, 162 Mont. at 328, 511 P.2d 981; section 1-3-204,MCA. In Brooklyn Savings Bank v. O'Neil (1945), 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296, the United States Supreme Court interpreted the federal counterpart to the Montana minimum wage and overtime requirements, section 16(b) of the FLSA. The Supreme Court held that the intent of the legislature in passing the FLSA was to prevent an employee's contractual waiver of his right to minimum wages and

### overtime and thereby prevent waiver of liquidated damages for withholding such payments. This, the Court held, would nullify thepurposes of theAct. Essentially, this Court came to a similar conclusion in Neiss, supra. In construing Montana's minimum wage requirementswe held that: 

# ".



# . .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 mini

### -- mum wage. It is elementary that a law established for apublic reason cannot be compromised by private agreement. Section 1-3-209, MCA." 

### (Emphasis added.) 

### 162 

### Mont. at 328, 511 P.2d at 981. We believe that allowing a noncontractual or implied waiver of minimum wages or overtime payments would also nullify the purposes of both statutes and would be contrary to public policy. Consequently, we hold that one's failure to assert such rights does not constitute waiver. Nonassertion could be the result of mere ignorance, which should not legitimize what we consider a continuing public offense or prevent vindication of an important public right. Hoehne is not estopped from claiming overtime pay owed to him fromhis employment with Sherrodd, Inc. Aff

### irmed. 

# 3A-44).

# pd,4 Chief JusticeWe 

### concur: