Opinion ID: 2790556
Heading Depth: 1
Heading Rank: 4

Heading: dwd's interpretation of its own regulation

Text: ¶21 Under the authority of § 103.02 the DWD has promulgated an administrative rule requiring employers to pay employees for on-duty meal periods. Wis. Admin. Code § DWD 274.02(3). German v. Wisconsin Dept. of Transp., Div. of State Patrol, 2000 WI 62, ¶10, 235 Wis. 2d 576, 612 N.W.2d 50. Given that this case presents an agency's interpretation of its own regulation, the question we next address, applying the appropriate standard of review, is whether the DWD decision in this case is reasonable and consistent with the purpose of the regulation. ¶22 The regulation that we are concerned with, DWD § 274.02, states that meal breaks of under 30 minutes cannot be unpaid. In interpreting its regulation, the DWD also took into consideration DWD § 274.05, which permits waivers for the mealbreak rule for parties to a CBA. ¶23 Wisconsin Admin. Code § DWD 274.02 states, The employer shall pay all employees for on-duty meal periods, which are to be counted as work time. An on-duty meal period is a meal 17 No. 2013AP265 period where the employer does not provide at least 30 minutes free from work. ¶24 Wisconsin Admin. Code § DWD 274.05 states that, with exceptions that are not applicable here, [W]here a collectively bargained agreement exists, the department may consider the written application of labor and management for a waiver or modification to the requirements of this chapter based upon practical difficulties or unnecessary hardship in complying therewith. If the department determines that in the circumstances existing compliance with this chapter is unjust or unreasonable and that granting such waiver or modification will not be dangerous or prejudicial to the life, health, safety or welfare of the employees, the department may grant such waiver or modification as may be appropriate to the case. ¶25 The DWD interpretation of DWD 274.02 in this factual situation focused on the availability of the waiver and the lack of any prejudice to the life, health, safety, or welfare of the employees. The record contains three documents from DWD: the initial determination by an investigator, the agency's final determination, and a letter reaffirming the final determination. ¶26 The initial decision of the DWD Labor Standards Investigator is dated July 15, 2007.21 This letter to counsel regarding the employee's back-pay claim against Husco states that the investigator has reviewed all of the information provided by both sides in this matter. It briefly recites the evidence the investigator has considered and cites to the 21 The DWD case number for this case, Thomas Kieckhefer v. Husco International, Inc., is Equal Rights Division Case 200700593. 18 No. 2013AP265 regulation. It states, It is not disputed that the parties failed to request a waiver from the department under DWD 274.05. However, that is a technical violation of the code. After noting that there was no reason to think that the agreement jeopardized the life, health, safety or welfare of the employees and that the meal-break length had been a part of the give and take of collective bargaining, the decision concluded, Based on my review of this matter, the factors required to approve a waiver or modification of DWD 272.02 are present in the facts of this case. The letter advised of the availability of administrative review. ¶27 The agency's final determination, dated September 17, 2007, is a letter from Labor Standards Bureau Director Robert S. Anderson to plaintiff's counsel in response to the request for administrative review. The letter makes the following statements: - This letter constitutes the department's review of the initial determination and final determination in this matter. - You have appealed the initial determination with respect to the department's decision not to collect any back wages for the workers. - The department believes that collecting unpaid wages for the meal periods in question would result in an unjust enrichment of the workers in this case. . . . Consequently, the department reaffirms its 19 No. 2013AP265 position not to seek collection of any back wages in this case. ¶28 The final determination was affirmed by a third letter, also signed by Director Anderson and dated October 8, 2007, which states that it is a response to counsel's request for the Department to reconsider its final determination in the case. This letter states, On behalf of the department I am reaffirming the earlier final determination. . . . The department therefore is hereby closing its case in this matter. The letter also observed that Wisconsin statutes provide the option to bring civil suit against the employer. ¶29 We first address the parties' disagreement about whether the DWD decision constitutes the kind of agency decision that is accorded deference. ¶30 At the circuit court summary judgment motion hearing, the circuit court asked the parties for their positions on the significance of the DWD decision. Plaintiffs' counsel agreed with the characterization that what the DWD did here is not binding on the court. Counsel for Husco acknowledged that the DWD decision was not binding on the court and stated its position as being that DWD's interpretation of rules was controlling. Husco did not take the position that plaintiffs are precluded from bringing a claim. No party asserts that the DWD decision is binding on this court. ¶31 The correct question is not whether the DWD decision is binding; there is no authority for the proposition that an agency interpretation of its own rules is binding on a court. 20 No. 2013AP265 The correct question is whether there is an agency interpretation of its own regulations, and if so, whether that interpretation is reasonable and consistent with the purpose of the regulation, and, therefore, entitled to controlling weight deference. ¶32 Plaintiffs dispute the characterization that there is an agency decision in this case that should be accorded deference. Plaintiffs cite to Building Trades Council v. Waunakee Community School District, 221 Wis. 2d 575, 585 N.W.2d 726 (Ct. App. 1998), for the proposition that [o]pinions by a single agency employee are not an official interpretation by the agency and are not entitled to any deference from the Court. Resp. Br. at 26. In that case, a party sought to obtain great deference to the propositions in two letters it had obtained from state employees for use as evidence to bolster its open records request. Id. at 588. The letters were not decisions from prior proceedings in the case, and the court noted that the first document was not at all the type of contested-case agency decision to which . . . courts will traditionally accord some degree of deference[,] and the second was no more than a statement of the writer's understanding of a position taken by another state agency. Id. at 588-589. In contrast, the DWD decision at issue in this case was quite clearly the result of a contested process and involved the submission of evidence and arguments by both parties. The DWD issued what it deemed the 21 No. 2013AP265 department's review of the initial determination and final determination in this matter.22 ¶33 The other cases Plaintiffs cite for the proposition that discretionary agency decisions are not final agency decisions subject to judicial review are likewise inapplicable and unpersuasive. See Wis. Environmental Decade v. Public Service Comm'n, 93 Wis. 2d 650, 659, 287 N.W.2d 737 (1980) (determining that an order denying a petition for an investigation did not qualify as an administrative decision for purposes of judicial review under Wis. Stat. Chap. 227); Tyler v. State Dept. of Public Welfare, 19 Wis. 2d 166, 119 N.W.2d 460 (1963) (holding that there was no legal right to court review of parole board decision because there is no legal right to release on parole); and Wisconsin Professional Police Ass'n v. Public Service Comm'n, 205 Wis. 2d. 60, 555 N.W.2d 179 (1996) (reviewing a discretionary decision by the Commission under the arbitrary and capricious standard). ¶34 Unlike those examples, this case involves two parties represented by counsel who prepared information and submitted it for review to the agency investigator. The plaintiffs appealed and later requested reconsideration from the agency. The facts 22 Plaintiffs compare these letters to the affidavit of Robert Anderson, prepared for this litigation after he left the DWD and after litigation started, that Husco relied on as evidence that the waiver would have been granted if requested. Our decision is based on the agency's determination as represented in the Sept. 17, 2007, letter and not on the contents of the Anderson affidavit. 22 No. 2013AP265 were limited and undisputed. There is no question that the regulation was promulgated by DWD and no question that it is the agency charged with administering and resolving employment disputes. We therefore treat the DWD decision as one by an agency interpreting its own rules. As noted above, the standard we employ when reviewing an agency's interpretation of its own rules is that it is due controlling weight. This recognizes the expertise and experience of DWD in both legal questions raised by employment disputes and technical matters such as formulas for back-pay calculations. See Kuhnert v. Advanced Laser Machining, Inc., 2011 WI App 23, ¶12, 331 Wis. 2d 625, 794 N.W.2d 805 (stating that the department's methodology for calculating . . . overtime pay is entitled to great weight deference. . . . [N]either the statutes nor the administrative code define 'regular rate of pay' or the appropriate method for calculating it.) ¶35 The facts set forth above show the text of the regulations and the reasoning of the Department. The DWD decision rests in large part on the investigator's determination that the failure to obtain the waiver that would have satisfied the regulation was a technical violation that did not warrant awarding back pay because the factors required to approve a waiver or modification of DWD 272.02 are present in the facts of this case. ¶36 We cannot say that the decision not to pursue an award of back pay is unreasonable. As noted above, the controlling weight given to an agency's interpretation of its own 23 No. 2013AP265 regulations is the equivalent of the great weight deference given in some circumstances to an agency's interpretation of a statute. We have explained how great that weight is: [T]he important difference between great weight and due weight deference [is that] a more reasonable interpretation overcomes an agency's interpretation under due weight deference, while under great weight deference, a more reasonable interpretation will not overcome an agency's interpretation, as long as the agency's interpretation falls within a range of reasonableness. UFE, Inc. v. LIRC, 201 Wis. 2d 274, 288, 548 N.W.2d 57 (1996). To find for Plaintiffs, we would have to take the position that in spite of the fact that there was no violation of the CBA (the terms of which they agreed to); no allegation of risk to workers' life, health, safety or welfare; and no likely alternative to simply adding ten minutes to the lunch break (and as a result, imposing a longer workday)——which is exactly what later happened——it is outside the range of reasonableness for DWD to deny back pay and deem the violation to be technical. In fact, simply put, DWD's determination is reasonable. ¶37 Nor can we say that it is contrary to the purpose of the regulation. Where the regulation contains an exemption that applies under specific circumstances and the exemption may be granted in the Department's discretion, the regulation's purpose is served where the Department has made such a determination. ¶38 We therefore reverse the court of appeals and remand for entry of summary judgment in favor of Husco.