Opinion ID: 2352789
Heading Depth: 1
Heading Rank: 1

Heading: jurisdiction

Text: KRS 337.385, enacted as part of the 1974 General Assembly's major revision of Kentucky's Wages and Hours Act, 1974 Ky. Acts, ch. 391, § 9, provides: (1) Any employer who pays any employee less than wages and overtime compensation to which such employee is entitled under or by virtue of KRS 337.020 to 337.285 shall be liable to such employee affected for the full amount of such wages and overtime compensation, less any amount actually paid to such employee by the employer, for an additional equal amount as liquidated damages, and for costs and such reasonable attorney's fees as may be allowed by the court. Provided, that if, in any action commenced to recover such unpaid wages or liquidated damages, the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of KRS 337.020 to 337.285, the court may, in its sound discretion, award no liquidated damages, or award any amount thereof not to exceed the amount specified in this section. Any agreement between such employee and the employer to work for less than the applicable wage rate shall be no defense to such action. Such action may be maintained in any court of competent jurisdiction by any one (1) or more employees for and in behalf of himself or themselves. (2) At the written request of any employee paid less than the amount to which he is entitled under the provisions of KRS 337.020 to 337.285, the commissioner may take an assignment of such wage claim in trust for the assigning employee and may bring any legal action necessary to collect such claim, and the employer shall be required to pay the costs and such reasonable attorney's fees as may be allowed by the court. The commissioner in case of suit shall have power to join various claimants against the same employer in one (1) action. (Emphasis added.) Subsection (1) unambiguously authorizes an uncompensated or undercompensated employee to sue the employer in any court of competent jurisdiction for the amount due and unpaid, plus liquidated damages, costs and attorney fees. If the amount is $4,000.00 or less, the court of competent jurisdiction is the district court. KRS 24A.120(1). Otherwise, it is the circuit court. Ky. Const. § 112(5). KRS 337.385 is substantially similar to 29 U.S.C. § 216(b) [2] of the federal Fair Labor Standards Act, which also authorizes a private cause of action by an employee against an employer to recover damages, including liquidated damages and attorney fees, for failure to pay wages owed for services rendered. KRS 337.385(2) is admittedly less clear than subsection (1), but the phrases any legal action necessary and in case of suit appear to authorize the commissioner to file suit on behalf of the employee in a court of competent jurisdiction. [3] Undoubtedly, the General Assembly included the liquidated damages provision in subsection (1) and omitted it from subsection (2) as an incentive for employees to hire their own attorneys and pursue their own claims, thereby relieving the commissioner of much of the burden of litigation. Appellants urge that KRS 337.310 vests exclusive jurisdiction of all wage-and-hour disputes in the Department of Labor, requiring Appellees to exhaust administrative remedies and limiting circuit court jurisdiction to appellate review. KRS 337.310 now provides: All orders or decisions of the secretary issued or made under KRS 337.020 to 337.405 may be appealed, and upon appeal an administrative hearing shall be conducted in accordance with KRS Chapter 13B. However, the pre-1996 version of KRS 337.310 provided: (1) All questions of fact arising under KRS 337.020 to 337.405 except as provided in this section, shall be decided by the secretary. There shall be no appeal from the decision of the secretary on any question of fact, but there shall be a right of review by the Circuit Court. Either party may, within twenty (20) days after the rendition of a final order of the secretary, by petition appeal to the Circuit Court that would have jurisdiction to try an action for breach of contract. (2) The review is limited to determining whether or not: (a) The secretary or director acted without or in excess of his powers; (b) The order or decision was procured by fraud; (c) The order or decision is not in conformity to the provisions of KRS 337.020 to 337.405; and (d) If findings of fact are in issue, whether they support the order or decision. (3) The Circuit Court shall enter judgment affirming, modifying, or setting aside the order or decision. The statute was a provision of the Women and Minors' Employment Act, 1938 Ky. Acts, ch. 105, a comprehensive statutory scheme establishing procedures to ensure that women and minors were neither overworked nor underpaid. That scheme was subsequently codified within the Wages and Hours Act under the title Women and Minors. The first part of the scheme, KRS 337.220-.360, created an elaborate system of wage boards, directory orders, and mandatory orders fixing the minimum fair wage for women and minors in various job classifications. KRS 337.310 was included within that scheme. However, it clearly was not intended to preclude women and minors from resorting to the courts for collection of unpaid wages; for, as originally enacted, the last statute in that scheme, KRS 337.360, provided: If any woman or minor worker is paid by his employer less than the minimum fair wage to which he is entitled under a mandatory minimum fair-wage order he may recover in a civil action the full amount of the minimum wage less any amount actually paid to him by the employer together with costs and such reasonable attorney's fees as are allowed by the court. Any agreement between him and his employer to work for less than the mandatory minimum fair wage shall be no defense to the action. At the requisition of any woman or minor worker paid less than the minimum wage to which he was entitled under a mandatory order, the commissioner may take an assignment of the wage claim in trust for the assigning employe and may bring any legal action necessary to collect the claim. The employer shall be required to pay the costs and such reasonable attorney's fees as are allowed by the court. The commissioner shall not be required to pay the filing fee, or other costs, in connection with such action. That is virtually the same language now contained in KRS 337.385, except that it only applied to women and minors and did not include a liquidated damages clause. Adult men could sue for unpaid wages under KRS 337.020, but that statute did not provide for recovery of attorney fees. In W.W. Mac Co. v. Teague, 297 Ky. 475, 180 S.W.2d 387 (1944), our predecessor court rejected an equal protection challenge under Section 3 of our Constitution and a special legislation challenge under Section 59(29), and held, without mentioning KRS 337.310, that [t]he effect of this provision is that in case an employer violates the Women and Minors' Employment Act by paying less than the wages prescribed by the Commissioner of Industrial Relations [now Department of Labor], the full amount of the minimum wage may be recovered, together with the costs of the action and a reasonable attorney's fee. 180 S.W.2d at 389. The 1966 General Assembly amended the Women and Minors' Act to extend its fair-wage provisions, including KRS 337.360, to any employee. 1966 Ky. Acts, ch. 158, § 9. The second part of the Women and Minors' Act, KRS 337.365-.400, dealt with working hours for women and minors, mandating rest periods and limiting the number of hours that women and minors could work in certain occupations to ten hours per day and sixty hours per week. KRS 337.410 provided that [t]he department shall have exclusive jurisdiction over the administration and enforcement of KRS 337.370 to 337.400. There was no similar provision in the minimum fair wage scheme of the Act. In its 1974 revision of the Wages and Hours Act, the General Assembly repealed those provisions establishing wage boards, directory orders, and mandatory orders pertaining to minimum fair wages for women and minors. It also repealed those provisions mandating rest periods and limiting working hours for women and minors. In their place, it enacted statutes adopting the minimum wage mandated by the federal Fair Labor Standards Act, 29 U.S.C. § 206(a)(1), 1974 Ky. Acts, ch. 391, § 2 (KRS 337.275), including time and a half for overtime, 1974 Ky. Acts, ch. 391, § 3 (KRS 337.285), and requiring lunch periods and rest periods for all employees. 1974 Ky. Acts, ch. 333, § 1 (KRS 337.355); 1974 Ky. Acts, ch. 386, § 106 (KRS 337.365). It also enacted KRS 337.055 (payment of all wages to employee who leaves or is discharged), 1974 Ky. Acts, ch. 275, § 1, and repealed KRS 337.410. It did not replace KRS 337.410 with a similar provision vesting in the department exclusive jurisdiction over the administration and enforcement of any provision of the Wages and Hours Act. See generally 1974 Ky. Acts, ch. 391. The 1974 General Assembly also repealed KRS 337.360, 1974 Ky. Acts, ch. 391, § 14, and replaced it with KRS 337.385, adding the liquidated damages provision. 1974 Ky. Acts, ch. 391, § 9. It retained KRS 337.310, amending it only to provide that [a]ll questions of fact arising under this Act and KRS 337.340 ... shall be decided by the commissioner. 1974 Ky. Acts, ch. 391, § 5 (emphasis added). The 1978 General Assembly amended that language again to read [a]ll questions of fact arising under KRS 337.020 to 337.405. ... 1978 Ky. Acts, ch. 340, § 3 (emphasis added). [4] Thus, KRS 337.310 then provided that all questions of fact arising under the Wages and Hours Act would be decided by the commissioner, subject to judicial review, except that the commissioner's findings of fact would be conclusive; and KRS 337.385(1) provided that the employee could sue in a court of competent jurisdiction for unpaid wages, liquidated damages, costs, and attorney fees. In Early v. Campbell County Fiscal Court, 690 S.W.2d 398 (Ky.App.1985), a panel of the Court of Appeals addressed the seeming conflict between KRS 337.310 and KRS 337.385(1) and held that KRS 337.385(1) referred only to the appellate jurisdiction conferred by KRS 337.310. Id. at 399. The panel did not further explain the consequences of its holding. However, it must have meant that, despite KRS 337.385(1)'s references to the court allowing reasonable attorney fees, the court finding good faith on the part of the employer, and the court exercising its sound discretion, and despite the statute's recitation that [s]uch action may be maintained in any court, the commissioner would decide in an administrative proceeding the issues of whether wages were improperly withheld, whether liquidated damages should be imposed, and the amount of costs and attorney fees to be awarded, subject only to judicial review. The following year, the same issue arose before a different panel of the Court of Appeals in Noel v. Season-Sash, Inc., 722 S.W.2d 901 (Ky.App.1986). That panel rejected an interpretation of Early that all wage disputes must originate before the commissioner (despite the precise language of Early ), 722 S.W.2d at 903, and refined Early to mean that KRS 337.310 applies only to a wage dispute when the employer has failed to pay the minimum wage required under KRS 337.275 and KRS 337.285, and that KRS 337.385 applies to all other contractual disputes regarding unpaid wages. Id. However, it did not explain why the language in KRS 337.310 that applied that provision to [a]ll questions of fact arising under KRS 337.020 to 337.405 did not apply to questions of fact arising under KRS 337.055 (failure to pay all wages due when employee leaves or is discharged) or KRS 337.060 (failure to pay any part of the wage agreed upon). We conclude that both Early and Noel misconstrued the effect of the statutory scheme. The applicable rule of statutory construction where there is both a specific statute and a general statute seemingly applicable to the same subject is that the specific statute controls. Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814, 819 (Ky.1992) (citing 2A Sutherland Statutory Construction § 51.05 (4th ed. 1984)). See also Travelers Indem. Co. v. Reker, 100 S.W.3d 756, 763 (Ky.2003); Commonwealth v. Phon, 17 S.W.3d 106, 107-08 (Ky.2000); DeStock # 14, Inc. v. Logsdon, 993 S.W.2d 952, 959 (Ky.1999). KRS 337.310 purports to apply generally to all wage and hour disputes and KRS 337.385 applies specifically to an employer's liability for unpaid wages. In fact, the title of the latter provision is Employers liabilityUnpaid wages and liquidated damages. Early erroneously concluded that KRS 337.310 always takes precedence over KRS 337.385; and Noel erroneously concluded that KRS 337.310 takes precedence over KRS 337.385 when the dispute involves failure to pay a statutory minimum wage. We now hold that KRS 337.385, the more specific statute, takes precedence over KRS 337.310, the general statute, whenever an employee, or the commissioner on employee's behalf, chooses to exercise the judicial remedy for recovery of unpaid wages. To the extent that Early and Noel hold otherwise, they are overruled. Our conclusion in this regard is reinforced by the fact that the 1996 General Assembly, concurrently with the effective date of the enactment of KRS Chapter 13B, again amended KRS 337.310, this time removing altogether the mandatory language that [a]ll questions of fact arising under KRS 337.020 to 337.405 ... shall be decided by the commissioner, and replacing it with the even-more general provision that [a]ll orders or decisions of the secretary issued or made under KRS 337.020 to 337.405 may be appealed, and upon appeal an administrative hearing shall be conducted in accordance with KRS Chapter 13B. 1996 Ky. Acts, ch. 318, § 313. Nothing in that language or in KRS Chapter 13B can be construed as conferring upon the Department of Labor exclusive jurisdiction to resolve all disputes pertaining to nonpayment of salary or wages.