Court Opinion

ID: 9574237
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:03:38.451011+00
Date Added: 2024-06-11T12:44:16.475154
License: Public Domain

RABINOWITZ, Justice,
dissenting, joined by MATTHEWS, Justice.
I disagree with the majority’s conclusion that the Department of Labor was without jurisdiction because Gruenig’s grievance did not involve a “wage claim” within the meaning of AS 23.05.220. Assuming ar-guendo that the majority is correct in concluding that the Department’s jurisdiction is limited to wage disputes arising out of express or implied contracts, I am persuaded that Gruenig’s claim involves contractual rights. Gruenig rejected a renewal contract whose terms included the following provision:
Any subsequent Cost of Living Allowances granted by the Legislature shall be applied according to Regents’ policy and regulation, as applicable.
In so doing, Gruenig specifically stated that he nevertheless intended “to continue working under the general terms of [his] renewal contract until further notice.” While the University never explicitly accepted this proposal, Gruenig did continue to work for the University until his resignation the following year. It is certainly arguable that the provision regarding cost of living allowances was incorporated into Gruenig’s employment agreement, and thus that he was contractually entitled to receive further pay increases. Since it is a question of fact whether or not Gruenig’s claim was based on his employment contract, summary judgment on the question of the Department’s subject matter jurisdiction over this claim *582was improperly granted. Alaska R.Civ.P. 56(c).
I also disagree with the majority’s conclusion that a “wage claim” cannot arise from a wrongful failure to grant a contractually or statutorily mandated increase in compensation. The majority reasons that
Gruenig does not seek to recover wages due him, but rather claims that he was wrongfully denied a reclassification and a salary increase.
The majority therefore concludes that Gruenig was not asserting a valid “wage claim,” since
[a] “wage claim” contemplates an employee seeking agreed-upon or equitably owed compensation for services which is unpaid and therefore due.
I disagree with the implicit premise that an unpaid wage increase cannot constitute “wages due” and furnish the basis for a valid “wage claim.” If the employment contract stipulates that wage increases are to take place at a fixed rate, and the employer refuses to raise the employee’s salary in accordance with the contractual terms, the Department would clearly have jurisdiction to compel the employer to comply with the employment contract. For example, if the employment agreement required the employer to pay a claimant the minimum wage, and the legislature raised the minimum wage, the Department would have jurisdiction to require the employer to increase the claimant’s salary if the employer refused to do so independently.
My conclusion that the Department clearly had authority under AS 23.05 to entertain and prosecute Gruenig’s claim leads me to disagree with the majority's holding that “[t]he superior court properly exercised its discretion in providing judicial relief without requiring the University to exhaust its administrative remedies.” In particular, I do not agree with the proposition that “the doctrine of exhaustion does not apply to cases where agency jurisdiction is challenged.” Adopting Professor Davis’ approach, I would consider an alleged jurisdictional defect as only one among several factors affecting the propriety of the invocation of the exhaustion requirement,1 and would conclude that the University should have been required to exhaust its administrative remedies. The University would not suffer a significant hardship, financial or otherwise, were it required to await the Department’s decision regarding the merits of Gruenig’s claim.2 Furthermore, a deter*583mination of whether it constitutes a “wage claim” within the meaning of AS 23.05.200 arguably requires a “specialized understanding in the agency’s field.”3 Thus, because the jurisdictional question is doubtful and the University made no persuasive showing that it would suffer irreparable harm if the case were remanded to the Department, I would reverse the decision below and permit the Department to exercise its statutory authority to decide whether to prosecute Gruenig’s claim.

. Professor Davis adduces three factors which should be considered by a court in ruling upon a contention that a party should be required to exhaust its administrative remedies:
The key factors are three: extent of injury from pursuit of administrative remedy, degree of apparent clarity or doubt about administrative jurisdiction, and involvement of specialized administrative understanding in the question of jurisdiction. Unfortunately, each of these three key factors is a variable, and each often calls for a considerable amount of judgment for its proper appraisal.
A workable standard probably should not go beyond a statement that each of these three factors should be weighed in determining whether or not a court should decide an issue of administrative jurisdiction without requiring exhaustion of administrative remedies. A neat word formula probably is not feasible....
When the administrative proceeding involves neither abnormal expense nor. other irreparable harm, and when the issue of jurisdiction is either doubtful or dependent upon specialized understanding in the agency’s field, requiring exhaustion is normally desirable. When expense or other irreparable harm is great and the issue of jurisdiction is easy for the court to determine, exhaustion normally should not be required. Exhaustion problems are difficult when the three factors pull against each other.
3 K. Davis, Administrative Law Treatise, § 20.-03 at 69-70 (1958) (footnotes omitted). This three-factor test has been used successfully in the ninth circuit since 1964. See S.E.C. v. G.C. George Securities, Inc., 637 F.2d 685, 688 n. 4 (9th Cir.1981); Marshall v. Burlington Northern, Inc., 595 F.2d 511, 513 (9th Cir.1979); Casey v. F.T.C., 578 F.2d 793, 796 (9th Cir.1978); Marshall v. Able Contractors, Inc., 573 F.2d 1055, 1057 (9th Cir.), cert. denied, 439 U.S. 826, 99 S.Ct. 98, 58 L.Ed.2d 119 (1978); Lone Star Cement Corp. v. F.T.C., 339 F.2d 505, 510 (9th Cir.1964); K. Davis, Administrative Law Treatise, § 20.19 at 296-97 (Supp.1982).

. See State of California, ex rel. Christianson v. F.T.C., 549 F.2d 1321 (9th Cir.), cert. denied, 434 U.S. 876, 98 S.Ct. 228, 54 L.Ed.2d 156 (1977), where the court applied Professor Davis’ test and concluded that:
Only a clear showing of irreparable injury from anticipated agency action will excuse *583the exhaustion of administrative remedies and permit judicial intervention in the agency process.
Id. at 1323 (citations omitted). The court vacated an injunction ordering the FTC to terminate cease-and-desist proceedings for lack of jurisdiction, holding that:
litigation expenses, however substantial and nonrecoverable, which are normal incidents of participation in the agency process do not constitute irreparable injury.
Id. (citations omitted).

. Davis, supra note 1, § 20.03 at 70 (1958). The “specialized understanding” criterion is not extremely important in light of the statutory mandate involved in this case. The Department is not given jurisdiction under AS 23.05 to adjudicate the merits of Gruenig’s claim, but rather is merely authorized to decide whether or not to prosecute the action. A court would ultimately adjudicate the claim in the first instance even if exhaustion were required.