No. 89-208 

IN THE SUPREME COURT OF THE STATE OF MONTANA-- C' 

1989 .- 

Petitioner and Appellant, 

-vsJUDITH McFARLANE and STATE OF MONTANA, 

DEPARTMENT OF LABOR & INDUSTRY, 

EMPLOYMENT RELATIONS DIVISION, 

Respondents. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Joseph B. Gary, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Lyman H. Bennett, 111; Morrow, Sedivy & Bennett, 

Bozeman, Montana 

For Respondent: 

Melanie A. Syrnons, Dept. of Labor & Industry, 

Helena, Montana 

Filed: 

Submitted on Briefs: Aug. 31, 1989 

Decided: September 21, 1989 

,,- 

I' Clerk 
Justice R. C. McDonough delivered the Opinion of the Court. 

This is an appeal from an action seeking an award of 

unpaid overtime wages and statutory penalty pursuant to S 

39-3-205, MCA, and 5 39-3-206, MCA. Petitioner, V.K. Putman, 

Inc. (Putman), appeals from the judgment of the District 

Court of the Eighteenth Judicial District, Gallatin County, 

confirming the Labor Commission's determination in favor of 

Respondent, Judith McFarlane (McFarlane). We affirm. 

The sole issue on appeal is: 

Whether Judith McFarlane was an employee who was subject 

to the jurisdictional authority of the Secretary of 

Transportation pursuant to the provisions of 49 U.S.C. 5 304 

[3102(b) 1, which exempts certain employees from state and 

federal overtime wage requirements. 

The facts of this case are not in dispute. Judith 

McFarlane was hired by Putman, a trucking company, on June 

19, 1985, as a dispatcher. During her period of employment, 

she often worked extra hours on Saturdays and through her 

lunch hours. She was never paid overtime wages for these 

extra hours. 

In early August 1987, McFarlane terminated her 

employment with Putman. Subsequently, she filed a claim with 

the Department of Labor and Industry, seeking overtime 

compensation for the hours worked on Saturdays and during her 

lunch time. A Hearing Examiner, appointed by the Department 

of Labor, conducted an administrative hearing on the claim. 

The examiner found in her favor and awarded McFarlane $742.80 

for the overtime hours she worked. The Hearing Examiner also 

found that Putman was subject to a statutory penalty which 

doubled McFarlane's recovery to $1,485.60. 

Putman appealed this decision to the District Court for 

the Eighteenth Judicial District, claiming that the Hearing 
Examiner abused his authority in making the awards. After 

submission of briefs the District Court issued an order 

affirming the award, and later the judgment was entered. 

This appeal followed. 

The standard to be .used by the court when reviewing a 

final agency decision in a contested case is set forth in S 

2-4-704, MCA. This statute dictates that a court may not 

substitute its judgment for that of the agency on questions 

of fact. Section 2-4-704(2), MCA. Moreover, reversal or 

modification of an agency interpretation of law is only 

justified if substantial rights of the appellant have been 

prejudiced because the administrative conclusion or decision 

is "arbitrary or capricious or characterized by abuse of 

discretion . . . " Section 2-4-704 (2) (f) , MCA. Because the 

facts were stipulated the only conclusion on review is the 

Department's interpretation of law. This review only 

requires that we determine whether its findings and ultimate 

decision were an abuse of discretion. City of Billings v. 

Billings Firefighters Local No. 521 (1982), 200 Mont. 421, 

432, 651 P.2d 627, 632. 

Resolution of the issue in this case requires us to 

examine Montana statutory law and its relationship to federal 

law governing the Secretary of Transportation's authority 

over certain employees involved in interstate commerce. 

Under S 39-3-405 (I), MCA, employers are required to pay 

overtime when employees work longer than forty hours a week. 

Certain employees are excluded from this requirement. Putman 

claims that under the exclusion provided by § 39-3-406(2) (a), 

MCA, it was not required to pay McFarlane overtime 

compensation, because she was governed by the Federal Motor 

Carrier Safety Act. Section 39-3-406(2) (a), MCA, states that 

the overtime provisions of § 39-3-405, MCA, do not apply to 

employees "with respect to whom the United States Secretary 
of Transportation has power to establish qualifications and 

maximum hours of service pursuant to the provisions of 49 

U.S.C. § 304." (Motor Carrier Safety Act) 

49 U.S.C. S 304 has been repealed and has been replaced 

by 49 U.S.C. S 3102(b). This repeal and subsequent 

reenactment, however, did not change either the purpose or 

the substance of the Motor Carrier Safety Act. Detailed 

Explanation Prepared - by - the Office - of - the Law Revision - 

Council, 128 Cong. Record 9543 (1982). Therefore, it is 

proper for this Court to look to case law interpreting 49 

U.S.C. r; 304, in determining S 3102(b)'s applicability to 

state overtime wage requirements. 

Section 3102 (b) states: 

The Secretary of Transportation may prescribe 

requirements for (1) qualifications and maximum 

hours of service of employees of, and safety of 

operation and equipment of, a motor carrier; and 

(2) qualifications and maximum hours of service of 

employees of, and standards of equipment of, a 

motor private carrier, when needed to promote 

safety of operations. 

Putman maintains that all of its employees are subject 

to the authority of the Secretary of Transportation's maximum 

hours requirement and that therefore they do not need to pay 

any of their employees overtime. Putman bases this argument 

on its interpretation of the definition of "motor carrier." 

Federal regulations found at 49 C.F.R. S 391.3(a) define the 

term "motor carrier" to include its "employees . . ., who are 

responsible for the hiring, supervision, training, assignment 

or dispatching of drivers. " Section 3102 (b) , gives the 

Secretary of Transportation the power to "prescribe the 

qualifications of maximum hours of service of . . . a motor 

carrier. " 
Because a "dispatcher" is included within the definition 

of "motor carrier," Putman maintains that the Secretary has 

the power to set maximum hour requirements for employees 

responsible for the dispatching of drivers. This in turn, 

leads to the conclusion that a dispatcher is exempt from 

overtime wage requirements pursuant to $ 39-3-406(2) (a), MCA. 

Putman's strained interpretation of the statute, 

however, ignores United States Supreme Court decisions which 

hold that only those employees whose work is related to motor 

carrier safety are exempt from overtime compensation. In 

United States v. American Trucking ~ssociations (1940), 310 

U.S. 531, 60 S.Ct. 1059, 84 L.Ed. 1345, the Supreme Court 

made an extensive investigation into the history of the 

legislation leading up to the passage of the Motor Carrier 

Act, as codified at 49 U.S.C. S 304. Its investigation led 

it to the concl.usion that the Act only affected those 

employees whose activities affected the safety of operation 

of a motor carrier. The Secretary of Transportation was held 

to not have jurisdiction to regulate the hours of service of 

those employees whose duties did not affect safety. 

Therefore, federal maximum hour requirements do not extend to 

all employees of a motor carrier as asserted by Putman. 

Putman further argues, however, that even if the 

Secretary's jurisdiction does not extend to all employees of 

a motor carrier, this Court should determine that dispatchers 

substantially affect the safety of motor carrier operations, 

and that therefore they are exempted from overtime 

compensation under $ 39-3-406 (2) (a), MCA. We find little 

validity to this argument. 

In making this argument, Putman points out that a 

dispatcher is responsible for day to day contact with the 

drivers. It is contended that if a dispatcher, through error 

of judgment, permits a vehicle to depart when the roads are 
icy or calls a driver to duty when he is sick or fatigued, an 

accident may result. While this may be true, it is clear 

that such an error would not be the proximate cause of the 

accident. In an opinion made in response to the question now 

before us, the Interstate Commerce Commission found that a 

dispatcher does not engage in any activities that directly 

affect the safety of operation of motor vehicles. -- In the 

Matter - of Maximum Hours of - Service - of Motor Carrier Employees 

Ex parte - No. - MC 2, 28 M.C.C. 125. In this case this Court 

will not disagree with a federal agency's own determination 

of the extent of its jurisdiction. To do otherwise would 

leave employees like McFarlane in limbo relative to wage and 

hour regulation in violation of the policy of our statute and 

Constitution. See Art. XII, Sec. 2, Mont.Cont. Therefore, 

we find that dispatchers are not subject to the regulations 

of the Secretary of Transportation concerning maximum hours. 

Accordingly, they are not exempted from overtime requirements 

contained in 5 39-3-405, FICA. 

We find that the Department of Labor's findings that 

Judith McFarlane, in her duties as a dispatcher, was entitled 

to overtime wages was not an abuse of discretion. Therefore, 

the District Co,urt's judgment is affirmed.