Title: HOEHNE v SHERRODD INC
Citation: N/A
Docket Number: 82-510
State: Montana
Issuer: Montana Supreme Court
Date: August 18, 1983

NO. 82-510 I F J T H E SUPREME C O U R T O F T H E STATE OF MONTANA 1983 I N T H E M A T T E R O F T H E W A G E CLAIM O F PERCY H O E H N E , Claimant and Respondent, SHERRODD, IKC . , Appellant and Respondent. APPEAL F R O M : D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone, The Honorable William J. Speare, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Towe, B a l l , Enright & Mackey; N e i l D. E n r i g h t , B i l l i n g s , Montana For Respondent : Radovich & Johnson; George Radovich, B i l l i n g s , Montana Paul Van T r i c h t , Dept. of Labor & I n d u s t r y , Helena, Montana F i l e d : Submitted on B r i e f s : 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 a penalty. 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 1981 until January 1982 to operate heavy equipment at a rate of $10 per hour. During this period of time Hoehne was a Montana resident and Sherrodd was a Hontana corporation with its principal 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 that he 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 Department moved to dismiss the amended petition and on October 29, 1982, the District Court granted the motion on the basis of the agency record. Sherrodd brings t h i s a p p e a l and r a i s e s two i s s u e s f o r c o n s i d e r a t i o n : 1. Did t h e Commissioner of t h e Montana Department of Labor and I n d u s t r y have j u r i s d i c t i o n t o d e c i d e t h e wage c l a i m i n q u e s t i o n ? 2. Is t h e c l a i m a n t estopped from c l a i m i n g o v e r t i m e wages? Sherrodd f i r s t c o n t e n d s t h a t t h e Montana Department o f Labor and I n d u s t r y d i d n o t have j u r i s d i c t i o n t o r u l e on Hoehne's wage c l a i m a s he o f t e n worked i n North Dakota. F u r t h e r , t h e r e was no o f f i c i a l r e q u e s t from North Dakota a u t h o r i z i n g Montana t o p r o c e e d on H o e h n e ' s wage c l a i m p u r s u a n t t o s e c t i o n 39-3-305, MCA. The Department a s s e r t s t h a t it had j u r i s d i c t i o n t o e n f o r c e Montana laws w i t h r e s p e c t t o Hoehne's c l a i m because b o t h t h e employee and t h e employer were r e s i d e n t s o f Montana and S h e r r o d d ' s p r i n c i p a l p l a c e o f b u s i n e s s was w i t h i n Montana. F u r t h e r , t h e employment c o n t r a c t was e n t e r e d i n t o i n Montana and p a r t of t h e work i n q u e s t i o n was performed h e r e . The e m p l o y e r ' s r e c o r d s d i d n o t i n d i c a t e t h e amount o f work done i n each s t a t e . F i n a l l y , Sherrodd was s u b j e c t t o t h e F a i r Labor S t a n d a r d s Act of 1938 (FLSA) and t h e Depart- ment had c l e a r a u t h o r i t y t o e n f o r c e t h e f e d e r a l a c t . The Department of Labor and I n d u s t r y h a s a s t a t u t o r y d u t y t o e n f o r c e Montana wage l a w s a f f e c t i n g Montana c i t i z e n s . S e c t i o n 39-1-102, MCA. The Commissioner of Labor m u s t i n v e s t i g a t e v i o l a t i o n s o f Montana wage l a w s a n d i n s t i t u t e a c t i o n s f o r unpaid wages. S e c t i o n 39-3-209, MCA. The commissioner may t a k e assignments of wage c l a i m s i n t r u s t f o r t h e c l a i m a n t and m a i n t a i n any proceeding t o e n f o r c e such claim. S e c t i o n 39-3-211, MCA. The Department may a l s o e n f o r c e t h e p r o v i s i o n s of t h e FLSA, r e q u i r i n g minimum wages and o v e r t i m e pay. I n S t a t e v. Holman A v i a t i o n Co. ( 1 9 7 8 ) , 176 Mont. 31, 575 P.2d 923, t h i s C o u r t h e l d t h a t t h e Department may i n s t i t u t e a c i v i l a c t i o n on b e h a l f o f employees t o r e c o v e r unpaid o v e r t i m e wages due under t h e FLSA. W e s t a t e d : "The Montana D e p a r t m e n t o f L a b o r was a u t h o r i z e d by b o t h t h e Montana l e g i s l a - t u r e , through s e c t i o n 41-1314.2, R.C.M. (1947) [ s e c t i o n 39-3-202, 211, 2 1 4 ( 2 ) ( 3 ) , MCA], and by t h e United S t a t e s Congress, through t h e FLSA and 29 CFR 515.8, t o i n s t i t u t e c i v i l a c t i o n s o n b e h a l f o f employees . . . t o r e c o v e r unpaid FLSA wages." 176 a t 3 6 , 375 P.2d a t 926. I n t h e p r e s e n t case it is c l e a r t h a t t h e Department was performing its s t a t u t o r y d u t y e n f o r c i n g Montana's wage laws p r o t e c t i n g Hoehne, a Montana r e s i d e n t . Such laws r e g u l a t e Montana c o r p o r a t i o n s , l i k e S h e r r o d d , and r e q u i r e them t o pay minimum and o v e r t i m e wages. Also, t h e FLSA p r o t e c t s a l l c i t i z e n s and t h e Department a c t e d w i t h i n its a u t h o r i t y e n f o r c i n g it h e r e . S t a t e v. Holman A v i a t i o n Co., s u p r a . The Montana Department of Labor and I n d u s t r y a c t e d w i t h i n its j u r i s d i c t i o n i n a d j u d i c a t i n g Hoehne's claim f o r o v e r t i m e wages. W e a l s o n o t e t h a t Rule 4 ( b ) ( I ) , M.R.Civ.P., g i v e s t h e c o u r t s of Montana j u r i s d i c t i o n o v e r a l l p e r s o n s w i t h i n t h e S t a t e o f Montana. T h i s is a c o d i f i c a t i o n of t r a d i t i o n a l c o n c e p t s of j u r i s d i c t i o n t h a t s u b j e c t a l l p e r s o n s w i t h i n a s t a t e ' s b o u n d a r i e s t o t h a t s t a t e ' s j u r i s d i c t i o n . W e h o l d t h a t under t h e t r a d i t i o n a l n o t i o n s of j u r i s d i c t i o n t h e Department p r o p e r l y r u l e d on t h i s claim. A l l p a r t i e s r e s i d e d i n Montana and t h e p r i n c i p a l p l a c e of b u s i n e s s of t h e employer was i n Montana. Accordingly, t h e c o u r t s of Montana have p r o p e r j u r i s d i c t i o n t o h e a r t h i s c a s e . W e a l s o f i n d t h a t when t h e l e g i s l a t u r e d e l e g a t e d j u d i c i a l power t o t h e Department t o d e c i d e wage c l a i m s it i n t e n d e d t h a t t h e Department be bound by j u d i c i a l c o n c e p t s of j u r i s d i c t i o n . To r e q u i r e an employee t o p u r s u e h i s wage c l a i m i n e a c h s t a t e h e w o r k s would u n d u l y b u r d e n a l l p a r t i e s involved. The employee would have t o t r a v e l t o each s t a t e where he worked t o pursue h i s claim. T h i s would l e a d t o a n o p p r e s s i v e burden on both t h e employee and t h e employer i n many c a s e s . For example, where a t r u c k e r h a u l s c a r g o through s e v e r a l s t a t e s t o reach h i s d e s t i n a t i o n , it would r e q u i r e both t h e employer and t h e employee t o go t o each s t a t e t o have a p o r t i o n o f a c l a i m a d j u d i c a t e d . Each p a r t y may a l s o need w i t n e s s e s , which most l i k e l y r e s i d e i n t h e p a r t i e s ' s t a t e of r e s i d e n c e . Furthermore, a s t h e Department p o i n t s o u t , t h i s would f r a c t i o n a l i z e t h e employee's c l a i m t o such a n e x t e n t a s t o make p u r s u i t of it n o t worthwhile. Second, Sherrodd a r g u e s t h a t Hoehne is estopped from c l a i m i n g o v e r t i m e compensation because h e f a i l e d t o r e p o r t accumulated overtime h o u r s and d i d n o t inform Sherrodd t h a t he e x p e c t e d overtime pay. Hoehne contends t h a t o v e r t i m e pay is a s t a t u t o r i l y mandated p u b l i c r i g h t . T h e r e f o r e , it c a n n o t be waived and a n employee c a n n o t be estopped from c l a i m i n g it. T h i s Court h a s h e l d t h a t a person may e i t h e r , by i m p l i c a t i o n o r agreement, waive t h e advantage of a law i n t e n d e d s o l e l y f o r h i s b e n e f i t . E a r l Clack Co. v. S t a u n t o n ( 1 9 3 7 ) , 105 Mont. 375, 72 P.2d 1022; Anaconda Copper Mining Co. v. R a v a l l i County ( 1 9 1 9 ) , 56 Mont. 530, 186 P. 332; Shea v. North-Butte Mining Co. ( 1 9 1 9 ) , 55 Mont. 522, 179 P. 499. Conversely, laws which are intended to protect the public in general cannot be waived privately, section 1-3-204, MCA, by either implication or agreement. Shea, supra. In Kopischke v. First Continental Corp. (1980), Mont. , 610 P.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 condi- tion. 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 estab- lished 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), 162 Mont. 324, 511 P.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 legis- lature 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 the purposes of the Act. Essentially, this Court came to a similar conclusion in Neiss, supra. In construing Montana's minimum wage requirements we held that: ". . .since we are dealing with a public right, public policy demands the minimum wage shall be paid. Minimum wage provi- sions 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 a public 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. Nonasser tion 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 from his employment with Sherrodd, Inc. Af f irmed. 3A-44). pd,4 Chief Justice W e concur: