Opinion ID: 2628014
Heading Depth: 2
Heading Rank: 3

Heading: interpretation of the overtime provisions of the washington minimum wage act

Text: ¶ 9 RCW 49.46.130(1) contains no explicit indication that it is limited in application to employees performing work within the state of Washington, but also indicates no intent to apply to hours worked in other states. RCW 49.46.130(1) provides, in relevant part: Except as otherwise provided in this section, no employer shall employ any of his employees for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. ¶ 10 While RCW 49.46.130(1) is silent regarding whether an employee must work over 40 hours within the state of Washington to receive overtime pay, RCW 49.46.005 is not silent on this point. RCW 49.46.005 describes the purpose of the entire MWA as follows: to establish minimum standards of employment within the state of Washington . . . to establish a minimum wage for employees of this state to encourage employment opportunities within the state . . . . for the purpose of protecting the immediate and future health, safety and welfare of the people of this state. (Emphasis added.) ¶ 11 These repeated references to the MWA's impact on employment matters within the state evidence the legislature's intent to focus the impact of the MWA on Washington employees working within the state of Washington. ¶ 12 In an attempt to minimize the impact of this statutory language, the majority analogizes this case to Burnside v. Simpson Paper Co., 123 Wash.2d 93, 864 P.2d 937 (1994). Majority at 851-52. In Burnside, this court held that limiting the application of the Washington Law Against Discrimination (WLAD) (chapter 49.60 RCW) in accordance with a literal interpretation of the term inhabitants contained in its statement of purpose would contravene the law's fundamental purpose. Burnside, 123 Wash.2d at 99, 864 P.2d 937. However, Burnside may be distinguished. ¶ 13 As an initial matter, Burnside is distinguishable in that the defendant in that case advocated a literal interpretation of a term in WLAD's statement of purpose in order to limit the court's subject matter jurisdiction to enforce the act. Id. at 98, 864 P.2d 937. No such jurisdictional challenge is mounted in the present case. More importantly, unlike in Burnside, limiting the application of the MWA in accordance with its focus on employees working within the state of Washington in no way impairs the MWA's fundamental purpose. Interpreting the word hours in RCW 49.46.130(1) to mean hours worked in Washington State is plainly . . . consistent with . . . the spirit of the MWA[ ], as evidenced by the plain language of RCW 49.46.005. Majority at 852. Furthermore, while the majority is correct that, as a general proposition, remedial statutes are to be liberally construed, this rule does not require that a statute be stretched beyond its express purpose (here stretched to apply Washington law outside the state's borders). Majority at 852. ¶ 14 The legislature's intent to focus the benefits of the MWA in general, and its overtime provision in particular, on employees working within the state of Washington is further confirmed by a long-standing administrative rule promulgated by the Department of Labor and Industries (DLI): WAC 296-128-011. This rule was adopted in 1989 with reference to RCW 49.46.130(2)(f) and this court's decision in Common Carriers, 111 Wash.2d 586, 762 P.2d 348. [2] Majority at 852-53. However, as the majority concedes, WAC 296-128-011 is not limited in application to workers covered by the (2)(f) exemption to RCW 49.46.130(1). Majority at 853. On its face, the rule is broadly applicable. Thus, it may be used to help resolve the ambiguity in RCW 49.46.130(1) regarding the hours relevant to computing overtime compensation for employees covered by the FMCA. ¶ 15 WAC 296-128-011, titled Special recordkeeping requirements, provides: (1) In addition to the records required by WAC 296-128-010, employers who employ individuals as truck or bus drivers subject to the provisions of the Federal Motor Carrier Act shall maintain records indicating the base rate of pay, the overtime rate of pay, the hours worked by each employee for each type of work, and the formulas and projected work hours used to substantiate any deviation from payment on an hourly basis pursuant to WAC 296-128-012. The records shall indicate the period of time for which the base rate of pay and the overtime rate of pay are in effect. For the purposes of this section and WAC 296-128-012, base rate of pay means the amount of compensation paid per hour or per unit of work in a workweek of forty hours or less. . . . Overtime rate of pay means the amount of compensation paid for hours worked within the state of Washington in excess of forty hours per week and shall be at least one and one-half times the base rate of pay. (emphasis added). WAC 296-128-011 confirms that to receive overtime under RCW 49.46.130(1), an employee must work more than 40 hours per week within the state of Washington. ¶ 16 The majority does not attempt to reconcile the language of the above rule with its decision that RCW 49.46.130(1) applies to all Washington-based employees who work any hours at all within the state of Washington. Rather, the majority simply disregards the rule altogether. First, the majority justifies its decision to ignore this rule by claiming that RCW 49.46.130(1) is not ambiguous. Majority at 854. Second, the majority reasons that the above rule is inapposite because it is inconsistent with the statutes [it] implement[s]. Majority at 853. The majority is wrong on both counts. Accordingly, the majority also erred in not deferring to the reasoned interpretation of RCW 49.46.130(1) by DLI. ¶ 17 Deference is accorded an agency's interpretation of a statute only if (1) the particular agency is charged with the administration and enforcement of the statute, (2) the statute is ambiguous, and (3) the statute falls within the agency's special expertise. Majority at 854 (citing Edelman v. State ex rel. Pub. Disclosure Comm'n, 152 Wash.2d 584, 590, 99 P.3d 386 (2004); Port of Seattle v. Pollution Control Hearings Bd., 151 Wash.2d 568, 587, 90 P.3d 659 (2004); Seattle Bldg. & Constr. Trades Council v. Apprenticeship & Training Council, 129 Wash.2d 787, 799, 920 P.2d 581 (1996)) (other citations omitted). The majority does not dispute that DLI is charged with the administration and enforcement of the MWA or that the statute falls with DLI's special expertise. [3] Rather, the majority concludes that deference to DLI's rule is unnecessary because RCW 49.46.130(1) is not ambiguous with regard to hours worked for purposes of determining when overtime compensation is due. Majority at 854. ¶ 18 As noted above, a statute is ambiguous if it is subject to more than one reasonable interpretation. Campbell & Gwinn, 146 Wash.2d at 12, 43 P.3d 4. Here, RCW 49.46.130(1) has in fact been subject to more than one reasonable interpretation regarding overtime hours as evidenced by the conflicting decisions of the trial court and Court of Appeals. Bostain, 127 Wash.App. at 501, 504, 111 P.3d 906. Moreover, Bostain himself has apparently switched views as to the meaning of the term given that he made no claim for overtime during the 10 years he was employed by Food Express. In sum, there can be no real dispute that reasonable minds have differed, and continue to differ, as to the meaning of RCW 49.46.130(1)'s reference to hours for purposes of overtime compensation. Bostain, 127 Wash.App. at 511, 111 P.3d 906 (Morgan, J., concurring). Accordingly, the three part test for deference to an agency's interpretation of a statute is satisfied here and this court should be guided in deciding the present case by WAC 296-128-011. Cf. Inniss v. Tandy Corp., 141 Wash.2d 517, 529, 7 P.3d 807 (2000) (relying, in part, on the DLI's interpretation of term regular rate as used in RCW 49.46.130(1)). ¶ 19 In addition to asserting that RCW 49.46.130(1) is not ambiguous, the majority argues that it may ignore WAC 296-128-011 because the rule is inconsistent with the statutes [it] implement[s]. Majority at 853. This alleged inconsistency arises from the fact that DLI's rule explicitly defines the term hours for overtime purposes as limited to hours worked within the state of Washington, while RCW 49.46.130(1) does not contain a similar limitation. Id. Yet, further refining the meaning of statutory terms used, but not defined, in the MWA is precisely the function which DLI's rules are meant to perform. Edelman, 152 Wash.2d at 590, 99 P.3d 386 (An agency charged with the administration and enforcement of a statute may interpret ambiguities within the statutory language through the rule-making process.). There is no irreconcilable conflict between the plain language of RCW 49.46.130(1) and that of WAC 296-128-011. Rather, the latter provision simply serves to interpret the former, in accordance with DLI's authority and expertise. Accordingly, the majority errs in refusing to look to WAC 296-128-011 for guidance in reaching its decision in this case. See In re Sehome Park Care Ctr., 127 Wash.2d at 780, 903 P.2d 443 (In interpreting a statute, we accord great weight to the contemporaneous construction placed upon it by officials charged with its enforcement. . . . ). ¶ 20 Furthermore, it should be noted that the legislature has not changed the regulatory scheme for interstate truck drivers since WAC 296-128-011 was adopted in 1989. In other words, for the past 15 years, the legislature has acquiesced in the DLI's approach to defining hours for purposes of awarding overtime compensation under RCW 49.46.130(1). Contrary to the suggestions of the majority, majority at 854, this legislative acquiescence is relevant to this court's decision. See In re Sehome Park Care Ctr., 127 Wash.2d at 780, 903 P.2d 443 (stating that this court will give great weight to agency construction especially where the Legislature has silently acquiesced in that construction over a long period); see also Cockle, 142 Wash.2d at 834, 16 P.3d 583 (Guy, J., concurring in dissent) (noting that the legislature had had ample opportunity to clarify the statute [RCW 51.08.178] if it felt that the Department [of Labor and Industries] was misinterpreting it). ¶ 21 In addition, this court must always seek to construe statutes in a manner that avoids constitutional problems. The majority's interpretation of RCW 49.46.130(1) likely runs afoul of the Commerce Clause, U.S. Const. art I, § 8, cl. 3. See State v. Heckel, 143 Wash.2d 824, 837, 24 P.3d 404, cert. denied, 534 U.S. 997, 122 S.Ct. 467, 151 L.Ed.2d 383 (2001). Implicit in the Commerce Clause is the principle that the states impermissibly intrude on . . . federal power when they enact laws that unduly burden interstate commerce. Id. at 832, 24 P.3d 404. Under the majority's interpretation, RCW 49.46.130(1) violates the Commerce Clause because the burden it imposes on interstate commerce is clearly excessive relative to the MWA's express public purpose. See id.; see also Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). ¶ 22 Interpreting RCW 49.46.130(1) to apply to all hours worked by an employee when those hours are worked outside of Washington means that the MWA will inevitably burden the extraterritorial activities of interstate truck drivers and their employers. For example, a truck driver could work for 15 hours in Washington, 15 hours in Oregon, and 15 hours in California in a single week. Application of RCW 49.46.130(1) in the manner advocated by the majority would require his employer to track and pay overtime related to the driver's hours worked in Oregon and California as well as Washington. Should this driver's employer wish to avoid paying overtime under the MWA, he might move his operation to another state or at least limit the driver's on duty hours while the driver engaged in work outside of Washington. Additionally, this employer would be faced with the unenviable task of researching and resolving any conflicts between the overtime laws of Washington, Oregon, and California. [4] In sum, under the majority's interpretation, RCW 49.46.130(1) will unquestionably burden the interstate activities of the trucking industry. ¶ 23 A statute will fail under the Pike balancing test and thus violate the Commerce Clause if the burden it imposes on interstate commerce is clearly excessive in relation to the putative local benefits. 397 U.S. at 142. As noted above, the public purpose of the MWA is focused on promoting employment and compensating employees within the state of Washington. Thus, the burden on interstate commerce that will result from the majority's interpretation of RCW 49.46.130(1) is largely unrelated to promotion of the public interests underlying the MWA. Because giving extraterritorial effect to RCW 49.46.130(1) will not actually further the legitimate public interests behind the MWA, the burden the majority imposes is excessive. [5] See Edgar v. MITE Corp., 457 U.S. 624, 642, 102 S.Ct. 2629, 73 L.Ed.2d 269 (1982). ¶ 24 Finally, while discarding the bright-line rule regarding overtime compensation for interstate truck drivers that has existed for the past 15 years, the majority offers the trucking industry, its employees, and its customers nothing more than a vague and unpredictable legal future regarding overtime compensation. Specifically, the majority suggests that, following its decision in this case, [w]hether overtime under RCW 49.46.130(1) must be paid for an employee as a Washington-based employee will depend on factors that courts routinely use for deciding choice of laws issues. Majority at 852 n. 5. The average employer (or trucker) is hardly equipped to perform a choice of laws analysis for every employee potentially considered to be Washington-based. See Burnside, 123 Wash.2d at 100, 864 P.2d 937 (discussing Washington's approach to choice of law questions). The rules regarding whether an employee must be paid overtime compensation under the MWA should facilitate the decision-making process on the ground, not hinder it. See Williams v. W.M.A. Transit Co., 153 U.S.App. D.C. 183, 472 F.2d 1258, 1265 (1972) (explaining need for overtime compensation rule which can be applied with reasonable simplicity by area businessmen). The majority's solution for future overtime compensation decisions will result only in more confusion and litigation regarding whether or not a given interstate trucker is entitled to overtime pay. This was not the legislature's intent in enacting RCW 49.46.130(1). See Berrocal v. Fernandez, 155 Wash.2d 585, 595, 121 P.3d 82 (2005) (noting that the legislature likely did not intend . . . an impractical system under the overtime provisions of the MWA).