Opinion ID: 2639297
Heading Depth: 3
Heading Rank: 1

Heading: The Superior Court Should Have Considered Whether the Employees' Claims Could Be Privately Settled under the Alaska Wage and Hour Act.

Text: Generally, `[s]ound judicial policy indicates that private settlements and stipulations between the parties are to be favored and should not be lightly set aside.' [4] In such cases, an action may be voluntarily dismissed by the plaintiff by filing a stipulation of dismissal by all parties who have appeared in the action. [5] Or, a court may dismiss an action upon the plaintiff's motion where there are such terms and conditions as the court deems proper. [6] In certain instances, though, the legislature has indicated that private settlements are disfavored; in such cases, the legislature has required court supervision. Overtime claims under the Alaska Wage and Hour Act (AWHA) fall into this category. AWHA was enacted to establish new and safeguard existing minimum and overtime wage standards for workers to promote their health, efficiency, and general well-being. [7] The employees' causes of action for fraud, false representations of employment, and failure to timely pay wages due do not fall under AWHA. These actions, therefore, could be privately settled for any amount, or for nothing. McCreadie, Morlang, and Weise, though, pled a cause of action under AS 23.10.060, for failure to pay overtime. Alaska Statute 23.10.060 is part of AWHA. A settlement of such a claim requires the approval of the court or the Alaska Department of Labor. [8] If such approval is not obtained, an employee is entitled to liquidated damages unless the employee expressly waives the right to receive liquidated damages. [9] Such a private written settlement is subject to the review of the department, which may approve it if it is fair to the parties involved. [10] Settlement agreements entered into after August 21, 1995 that are not approved by the court or the department are expressly rendered unenforceable. [11] In privately settling claims under this section, therefore, parties are required to follow the procedures set out in AS 23.10.110(a) and (j). The trial court's failure to determine whether the settlement and release entered into by McCreadie, Morlang, and Weise implicated AWHA is understandable. The employees did not make clear that they were pursuing a cause of action under AWHA or what the court's responsibility was under the act. The complaint contained only a single reference to AS 23.10.060 in a heading, but that reference was without any discussion, and the complaint made no reference to the procedures AWHA mandates. And the single statute mentioned, AS 23.10.060, itself contains no reference to the provisions of AWHA that require court involvement in approving settlements. [12] In sum, DeSalvo and White may privately settle their claims because the claims fall outside AWHA, but as to McCreadie, Morlang, and Weise, the trial court must make factual findings as to whether AWHA applies to their claims. This includes findings as to whether Lytle is a defendant in the case against whom judgment can be entered, [13] whether the defendants were employers under AWHA, [14] and whether the plaintiffs fall under one of the exceptions to AWHA. [15] If AWHA does apply, the superior court must review the statutory causes of action. [16]