Court Opinion

ID: 9621161
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:52:38.631815+00
Date Added: 2024-06-11T15:04:41.167042
License: Public Domain

*230EDMONDS, P. J.
Plaintiffs appeal from a judgment dismissing their actions against the State of Oregon alleging a violation of the Fair Labor Standards Act (FLSA). The trial court held that it did not have jurisdiction because of the State of Oregon’s sovereign immunity and because plaintiffs did not give timely notice of their claims under the Oregon Tort Claims Act (OTCA). We review for errors of law and affirm.
Plaintiffs brought these actions to recover overtime compensation that they claim is owed to them under the FLSA.1 As salaried state employees, the state treated plaintiffs as exempt from FLSA overtime requirements at all material times.2 They now claim that, according to Department of Labor regulations, the state was required to pay them overtime. See generally Auer v. Robbins, 519 US 452, 117 S Ct 905, 137 L Ed 2d 79 (1997).
Initially, some of the plaintiffs had brought their claims in the United States District Court. Those claims were dismissed for lack of jurisdiction, Stuhr v. State, No. CIV 95-6118TC, 1996 WL 888187 (D Or 1996), aff'd sub nom Quillin v. Oregon, 127 F3d 1136 (9th Cir 1997), in accordance with the United States Supreme Court’s decision in Seminole Tribe of Florida v. Florida, 517 US 44, 116 S Ct 1114, 134 L Ed 2d 252 (1996). Thereafter, plaintiffs brought these actions in the Marion County Circuit Court.3 In an ORCP 47 motion *231for summary judgment, the state argued that plaintiffs had failed to give timely notice of their claims under the OTCA, ORS 30.260 through 30.300, as required to bring a tort claim against the state. In turn, plaintiffs moved for partial summary judgment on the issue of the state’s liability. The trial court granted the state’s motion and dismissed the claims in their entirety for lack of jurisdiction.
Plaintiffs do not contend that they gave timely notice under the OTCA regarding their FLSA claims.4 Instead, they argue that such notice is not required for a FLSA claim brought in state court. They first assert that the state’s sovereign immunity was abrogated by Congress when it enacted the FLSA. Therefore, they do not have to comply with the notice provisions of the OTCA. After the briefs were filed in this case, the Supreme Court rejected that argument in Alden v. Maine, 527 US 706, 119 S Ct 2240, 144 L Ed 2d 636 (1999), holding that “the States retain immunity from private suit in their own courts, an immunity beyond the congressional power to abrogate by Article I legislation.” As a result, plaintiffs can sue a state in state court under the FLSA only if the state has waived its right to immunity from suit .Alden, 119 S Ct at 2267.
 Article IV, section 24, of the Oregon Constitution, provides that “[provision may be made by general law, for bringing suit against the State, as to all liabilities originating after, or existing at the time of the adoption of this Constitution[.]” The OTCA represents a partial waiver by general law of the state’s immunity. Hale v. Port of Portland, 308 Or 508, *232516-17, 783 P2d 506 (1989). If a FLSA claim is a “tort” for purposes of the OTCA,5 then plaintiffs must comply with the notice requirements of the act to take advantage of the state’s partial waiver of immunity. Here, plaintiffs did not give timely notice of their claims under ORS 30.275. “The requirement that notice be given timely is a substantive condition precedent to recovery under the Oregon Tort Claims Act that, if not satisfied, deprives a plaintiff of the right to make a claim. Urban Renewal Agency v. Lackey, 275 Or 35, 40, 549 P2d 657 (1976).” Tyree v. Tyree, 116 Or App 317, 320, 840 P2d 1378 (1992), rev den 315 Or 644 (1993). If the OTCA is applicable to plaintiffs’ actions, the actions are barred by ORS 30.275.
Plaintiffs argue that the OTCA is inapplicable because the state’s duty to pay overtime arises out of employment contracts and that the definition of “tort” under ORS 30.260(8) excludes duties arising from contract or quasi-contract. Plaintiffs’ argument fails to acknowledge relevant case law that characterizes the breaches of legal duties arising from statute as “torts” for the purposes of the OTCA. In Urban Renewal, a state agency sought rent from the defendants on a building that the agency had previously condemned. The defendants counterclaimed for damages, alleging that, under federal regulations, the agency had a duty to assist them in obtaining a replacement location and that the agency had failed to comply with the regulations. The agency demurred to the counterclaim on the ground that it did not allege notice as required by the OTCA. The trial court granted the demurrer, and on review, the Supreme Court affirmed, holding that the breach was a tort for purposes of the OTCA:
“It has been said, and with good reason, that no really satisfactory definition of a tort has yet been found. As a general rule, however, any breach of a legal duty resulting in damages, other than those duties created by contract, is a tort, whether that duty is imposed by the common law or by statute. Also, in our view, and as held in Gray v. Hammond *233Lumber Co., et al, 113 Or 570, 232 P 637, 233 P 561, 234 P 261 (1925):
“ ‘When statutes are enacted which undertake to declare rights and establish a standard of conduct for their protection, any acts or omissions in violation of such statute, which destroy the enjoyment of such rights, may be treated as legal wrongs or torts: * * *.’ ” Urban Renewal, 275 Or at 38 (footnote omitted).
Also, in Griffin v. Tri-Met, 318 Or 500, 506, 870 P2d 808 (1994), the court rejected the Oregon Trial Lawyers Association’s amicus argument that an unlawful employment practice was not a tort under the OTCA. Citing to Urban Renewal, the court held that ORS 659.425(1) imposes on an employer a duty not to discharge an individual based on physical impairment and that that duty is “a legal duty imposed by law, other than a duty arising from contract or quasi-contract” within the meaning of the OTCA. Griffin, 318 Or at 506-07.
Finally, in Fullerton v. Lamb, 177 Or 655, 163 P2d 941, 165 P2d 63 (1946), the plaintiff sued to recover overtime pay and penalties under the FLSA. The defendant demurred on the ground that chapter 265, of the Oregon Laws (1943), operated to bar the action because the action had not been brought within the statute of limitations expressed by that chapter. 177 Or at 659-60. Because there was no applicable federal statute of limitations, the court looked to available statutes of limitations under Oregon law. Before the enactment of chapter 265, the action would have been governed by OCLA § 1-204(1) (prescribing a limitation of six years based on express or implied contract), or OCLA § 1-204(2) (prescribing a six-year limitation for liability created by statute, other than for a penalty or forfeiture), or OCLA § 1-205 (prescribing a three-year limitation on actions for penalties). Id. at 661-62. Under chapter 265, the plaintiff was required to bring his action within three months or at the most, six months after the effective date of the statute. At issue on appeal was the constitutionality of chapter 265 in light of the substantive rights granted by the FLSA.6 In deciding that issue, the court *234said, “[w]e are inclined to the view, * * *, that this is an action upon a liability created by statute rather than one upon a contract or liability, express or implied.” Fullerton, 177 Or at 661.
In light of the foregoing cases, we turn to the question of whether plaintiffs’ actions are founded in “tort” as contemplated by the language of the OTCA, or in contract and exempt from its provisions. The question is one of statutory interpretation and the intent of the Oregon Legislature. The language of the OTCA and the Oregon Supreme Court case law interpreting it supply the initial focus for our inquiry. See State v. Clevenger, 297 Or 234, 244, 683 P2d 1360 (1984). Has the state consented to be sued under the FLSA, a federal statute, without compliance with the OTCA notice requirements when the employment relationships at issue do not include the duty on which plaintiffs rely? The answer depends on what gives rise to the claim. It is apparent from the language of the applicable statutes and the case law interpreting them that claims based on rights or duties created by statutes are to be treated as “tort” claims for purposes of the OTCA. On the other hand, if a claim is based on a contractual provision, then the exemption applies. Here, we conclude that, because the duty relied on by the plaintiffs is imposed not by the terms of their employment relationships with the state but by federal law, the legislature would have intended plaintiffs’ actions to be considered as founded in tort and subject to the OTCA notice provisions.
The dissent believes to the contrary. It says:
“As a matter of federal law, the Fair Labor Standards Act (FSLA) regulates the terms of employment contracts, and claims under the act are claims on a contract. Despite that federal construction of a federal statute, the majority concludes that in Oregon a claim under the FLSA is a tort. * * * Because * * * this action is in fact contractual in nature, under ORS 30.320 the state has consented to be sued.” 163 Or App at 238.
The dissent’s contentions prove too much. First, the federal circuit court opinions and the three lower federal court opinions, to which the dissent refers, all involve the application of state statutes of limitations and the determination as to what *235particular state statute should be applied.7 They do not support the concept that there is an overriding principle of federal supremacy that prevents states from deciding for themselves whether a FLSA claim is a contractual or a tort claim under a particular state statutory scheme. In fact, they demonstrate that the legal characterization of a FLSA action is a question to be decided under state law. Clearly, Oregon courts when construing a statute passed by the Oregon Legislature are not bound by lower federal court characterizations regarding the state statutes.
In addition, under Oregon law, a tort action may arise from a contractual relationship when it is based on a duty that is independent of the specific terms of the contract. Georgetown Realty v. The Home Ins. Co., 313 Or 97, 106, 831 P2d 7 (1992). Here, plaintiffs do not contend that they are entitled to overtime pay under the terms of their employment contracts. They rely solely on the rights given to them under a statute, the FLSA, that is independent of their relationship.
The relationship of the FLSA to plaintiffs’ employment relationships is similar to the relationship between the employment contract in issue and a statute in Maddox v. Clac. Co. Sch. Dist. No. 25, 293 Or 27, 643 P2d 1253 (1982). There the issue was whether a probationary school teacher, whose contract was expressly subject to the laws of the State of Oregon that prohibited termination of employment of probationary teachers at will, could bring a claim for breach of contract when termination was not elsewhere dealt with in his contract. The court ruled:
*236“Those interests of the parties which exist by virtue of the contract (e.g., compensation) may be protected by contract remedies. Plaintiffs freedom from improper termination, however, does not arise from the contract. That interest exists by virtue of the statute. His remedies also exist by virtue of the statute. The contract only acknowledges that its provisions (e.g., term) are ‘subject to,’ among other things, the termination provision of [the statute]. No additional contract right or remedy to enforce the statute is created by the ‘subject to’ provision.” 293 Or at 33.
The dissent argues that the FLSA has become part of the contracts between the state and plaintiffs. However, when Oregon statutes become part of the terms of a contract, it is because of the intention of the Oregon Legislature. For instance, the legislature requires certain statutory requirements to be expressed in insurance policies. See, e.g., ORS ch 742. No such statute or evidence of legislative intent exists here. Insofar as the record before us is concerned, the provisions of the OTCA were enacted and operate independently from the provision of the FLSA.
Also, rights granted by statutes could become contractual terms because the performance of an employee is tendered in consideration of a statutory right. For instance, in Oregon State Police Officers’ Assn. v. State of Oregon, 323 Or 356, 918 P2d 765 (1996), public employees, and unions representing public employees, challenged the lawfulness of constitutional amendments affecting the state retirement system. In deciding whether a contract relationship between the public employees and the state included statutory pension rights, the court reviewed its holdings in Crawford v. Teachers’ Ret. Fund Ass’n, 164 Or 77, 99 P2d 729 (1940), Harryman v. Roseburg Fire Dist., 244 Or 631, 634, 420 P2d 51 (1966), and Taylor v. Mult. Dep. Sher. Ret. Bd., 265 Or 445, 452, 510 P2d 339 (1973), among others. The court summarized those cases as recognizing “that the [state retirement system] is an offer for a unilateral contract which can be accepted by the tender of part performance by the employee.” 323 Or at 371.
In Crawford, a teacher sought to compel payment of an annuity upon retirement under a statute that required school districts to make deductions from teachers’ salaries *237and provide for a teachers retirement fund association. The issue on appeal was whether the plaintiff was entitled to an annuity after the association had modified its bylaws subsequent to her retirement to require an increased amount of contribution level that the plaintiff did not meet. Ruling in the plaintiffs favor, the court said:
“We do not consider the annuities provided under the teachers’ retirement fund plan as in the nature of pensions or bounties which a beneficent sovereignty, acting at its will, may change or abolish. The teacher, by continuing in the service and making contributions to the fund, has, in effect, accepted the offer of the State, through its governmental agencies, to pay an annuity upon retirement at a certain age. We are * * * [dealing] with the rights of an employee to the payment of an annuity provided for under the terms of the statue which became a part of the contract.” 164 Or at 87.
In Taylor, the court held that a statute providing for retirement benefits can represent an offer for a unilateral contract and that, by continuing to work for the requisite period necessary for retirement, the employee had accepted that offer through his part performance. 265 Or at 452. Accordingly, in Harryman, the court held that an allowance for accumulated sick leave under the district’s policy was part of the plaintiffs employment contract because he was induced to accept employment, in part, because of the policy. 244 Or at 634-35.
Unlike retirement benefits, the overtime provisions of the FLSA do not constitute a unilateral offer on the part of the state of Oregon that plaintiffs could accept through part performance. As salaried employees, plaintiffs did not accept FLSA benefits by performing under their employment agreements. Moreover, plaintiffs do not argue that they were induced to accept employment based on the understanding that they would receive overtime compensation or worked longer hours because of an understanding that they would receive overtime compensation. Plaintiffs’ interests under the FLSA arise only by virtue of the federal statute and its regulations, a regulatory scheme that is independent of the terms of each employment relationship between the state of Oregon and its employees.
*238In summary, plaintiffs’ action depends on the state’s duty to pay overtime under the FLSA. Their noncompliance with the OTCA notice requirements is fatal to their action because for purposes of ORS 30.275, their action is considered as founded in tort rather then contract. That characterization occurs because the state’s duty arises out of a legal duty imposed by federal law and not out of the employment contracts themselves. This is not a situation where plaintiffs allege that they have been induced to enter into employment relationships because of the provisions of the FLSA'br that its provisions are part of a bargained-for consideration in exchange for their performance. Consequently, plaintiffs were required to comply with the OTCA notice requirements in order to bring their action.
Affirmed.

 29 USC § 216(b) (1998) provides, in part:
“Any employer who violates the provisions of section 206 [establishing minimum wage requirements! or section 207 [establishing maximum hours and overtime compensation requirements! shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. * * * An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.”

 29 USC section 213 (1998) contains a number of exemptions from the requirement, of section 207, that overtime be paid when employees work over 40 hours in a work week.

 There are two different groups of state employees involved in this consolidated appeal: union represented employees and unrepresented management employees. Robin Butterfield and Lynda Transue are union plaintiffs and the other *231appellants are nonunion plaintiffs. The parties sought to have their separate cases consolidated for purposes of resolving the jurisdictional issue raised in both cases, and the trial court ordered consolidation.

 ORS 30.275 provides, in part:
“(1) No action arising from any act or omission of a public body or an officer, employee or agent of a public body within the scope of ORS 30.260 to 30.300 shall be maintained unless notice of claim is given as required by this section.
“(2) Notice of claim shall be given within the following applicable period of time, not including the period, not exceeding 90 days, during which the person injured is unable to give the notice because of the injury or because of minority, incompetency or other incapacity:
“(a) For wrongful death, within one year after the alleged loss or injury.
“(b) For all other claims, within 180 days after the alleged loss or injury.”

 ORS 30.260(8) defines “tort” as “the breach of a legal duty that is imposed by law, other than a duty arising from contract or quasi-contract, the breach of which results in injury to a specific person or persons for which the law provides a civil right of action for damages or for a protective remedy.”

 Chapter 265 was held unconstitutional by the court because it conflicted with the substantive provisions of the FLSA. Fullerton, 177 Or at 685.

 Sections 11819 through 11821, of the General Code of Ohio, are the subject of the opinion in Northwestern Yeast Co. v. Broutin, 133 F2d 628, 629 (6th Cir 1943). The court in Roland Electrical Co. v. Black, 163 F2d 417, 423 (4th Cir 1947), cert den 333 US 854 (1948), begins its discussion by saying, “it is * * * necessary to decide whether the suit is based upon wage contracts governed by * * * Art. 57, § 1 of the Maryland Code, or is based upon the Fair Labor Standards Act to such an extent that it must be considered a suit on a specialty * * * provided by Art. 57, § 3 of the Maryland Code.” The issue in Fletcher v. Grinnell Bros., 64 F Supp 778 (ED Mich 1946) was whether a FLSA claim survived after the plaintiffs death under Michigan statutes. In Keen v. Mid-Continent Petroleum Corporation, 58 F Supp 915, 917 (ND Iowa 1945), the court observed that “where a federal statute provides for a right and Congress has not prescribed any period of limitation, * * * the valid applicable state statutes of limitations are to be applied.” The court in Cunningham v. Weyerhaeuser Timber Co., 52 F Supp 654, 655 (WD Wash 1943), focused on a Washington statute of limitations.