V.K. Putnam, Inc. v. McFarlane

No. 89-208
IN THE SUPREME COURT OF THE STATE OF MONTANA--
C '
1989 .-
Petitioner and Appellant,
-vs-
JUDITH McFARLANE and STATE OF MONTANA,
DEPARTMENT OF LABOR & INDUSTRY,
EMPLOYMENT RELATIONS DIVISION,
Respondents.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Joseph B. Gary, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Lyman H. Bennett, 111; Morrow, Sedivy & Bennett,
Bozeman, Montana
For Respondent:
Melanie A. Syrnons, Dept. of Labor & Industry,
Helena, Montana
Submitted on Briefs: Aug. 31, 1989
Decided: September 21, 1989
Filed:
, , -
I' Clerk
Justice R. C. McDonough delivered the Opinion of the Court.
This is an appeal from an action seeking an award of
unpaid overtime wages and statutory penalty pursuant to S
39-3-205, MCA, and 5 39-3-206, MCA. Petitioner, V.K. Putman,
Inc. (Putman), appeals from the judgment of the District
Court of the Eighteenth Judicial District, Gallatin County,
confirming the Labor Commission's determination in favor of
Respondent, Judith McFarlane (McFarlane). We affirm.
The sole issue on appeal is:
Whether Judith McFarlane was an employee who was subject
to the jurisdictional authority of the Secretary of
Transportation pursuant to the provisions of 49 U.S.C. 5 304
[3102(b)1, which exempts certain employees from state and
federal overtime wage requirements.
The facts of this case are not in dispute. Judith
McFarlane was hired by Putman, a trucking company, on June
19, 1985, as a dispatcher. During her period of employment,
she often worked extra hours on Saturdays and through her
lunch hours. She was never paid overtime wages for these
extra hours.
In early August 1987, McFarlane terminated her
employment with Putman. Subsequently, she filed a claim with
the Department of Labor and Industry, seeking overtime
compensation for the hours worked on Saturdays and during her
lunch time. A Hearing Examiner, appointed by the Department
of Labor, conducted an administrative hearing on the claim.
The examiner found in her favor and awarded McFarlane $742.80
for the overtime hours she worked. The Hearing Examiner also
found that Putman was subject to a statutory penalty which
doubled McFarlane's recovery to $1,485.60.
Putman appealed this decision to the District Court for
the Eighteenth Judicial District, claiming that the Hearing
Examiner abused his authority in making the awards. After
submission of briefs the District Court issued an order
affirming the award, and later the judgment was entered.
This appeal followed.
The standard to be .used by the court when reviewing a
final agency decision in a contested case is set forth in S
2-4-704, MCA. This statute dictates that a court may not
substitute its judgment for that of the agency on questions
of fact. Section 2-4-704(2), MCA. Moreover, reversal or
modification of an agency interpretation of law is only
justified if substantial rights of the appellant have been
prejudiced because the administrative conclusion or decision
is "arbitrary or capricious or characterized by abuse of
discretion . . . " Section 2-4-704 (2)(f), MCA. Because the
facts were stipulated the only conclusion on review is the
Department's interpretation of law. This review only
requires that we determine whether its findings and ultimate
decision were an abuse of discretion. City of Billings v.
Billings Firefighters Local No. 521 (1982), 200 Mont. 421,
432, 651 P.2d 627, 632.
Resolution of the issue in this case requires us to
examine Montana statutory law and its relationship to federal
law governing the Secretary of Transportation's authority
over certain employees involved in interstate commerce.
Under S 39-3-405 (I), MCA, employers are required to pay
overtime when employees work longer than forty hours a week.
Certain employees are excluded from this requirement. Putman
claims that under the exclusion provided by § 39-3-406(2) (a),
MCA, it was not required to pay McFarlane overtime
compensation, because she was governed by the Federal Motor
Carrier Safety Act. Section 39-3-406(2) (a), MCA, states that
the overtime provisions of § 39-3-405, MCA, do not apply to
employees "with respect to whom the United States Secretary
of Transportation has power to establish qualifications and
maximum hours of service pursuant to the provisions of 49
U.S.C. § 304." (Motor Carrier Safety Act)
49 U.S.C. S 304 has been repealed and has been replaced
by 49 U.S.C. S 3102(b). This repeal and subsequent
reenactment, however, did not change either the purpose or
the substance of the Motor Carrier Safety Act. Detailed
Explanation Prepared - - Office - - - Revision
by the of the Law
Council, 128 Cong. Record 9543 (1982). Therefore, it is
proper for this Court to look to case law interpreting 49
U.S.C. r; 304, in determining S 3102(b)'s applicability to
state overtime wage requirements.
Section 3102 (b) states:
The Secretary of Transportation may prescribe
requirements for (1) qualifications and maximum
hours of service of employees of, and safety of
operation and equipment of, a motor carrier; and
(2) qualifications and maximum hours of service of
employees of, and standards of equipment of, a
motor private carrier, when needed to promote
safety of operations.
Putman maintains that all of its employees are subject
to the authority of the Secretary of Transportation's maximum
hours requirement and that therefore they do not need to pay
any of their employees overtime. Putman bases this argument
on its interpretation of the definition of "motor carrier."
Federal regulations found at 49 C.F.R. S 391.3(a) define the
term "motor carrier" to include its "employees .. ., who are
responsible for the hiring, supervision, training, assignment
or dispatching of drivers. " Section 3102 (b), gives the
Secretary of Transportation the power to "prescribe the
qualifications of maximum hours of service of . . . a motor
carrier. "
Because a "dispatcher" is included within the definition
of "motor carrier," Putman maintains that the Secretary has
the power to set maximum hour requirements for employees
responsible for the dispatching of drivers. This in turn,
leads to the conclusion that a dispatcher is exempt from
overtime wage requirements pursuant to $ 39-3-406(2) (a), MCA.
Putman's strained interpretation of the statute,
however, ignores United States Supreme Court decisions which
hold that only those employees whose work is related to motor
carrier safety are exempt from overtime compensation. In
United States v. American Trucking ~ssociations (1940), 310
U.S. 531, 60 S.Ct. 1059, 84 L.Ed. 1345, the Supreme Court
made an extensive investigation into the history of the
legislation leading up to the passage of the Motor Carrier
Act, as codified at 49 U.S.C. S 304. Its investigation led
it to the concl.usion that the Act only affected those
employees whose activities affected the safety of operation
of a motor carrier. The Secretary of Transportation was held
to not have jurisdiction to regulate the hours of service of
those employees whose duties did not affect safety.
Therefore, federal maximum hour requirements do not extend to
all employees of a motor carrier as asserted by Putman.
Putman further argues, however, that even if the
Secretary's jurisdiction does not extend to all employees of
a motor carrier, this Court should determine that dispatchers
substantially affect the safety of motor carrier operations,
and that therefore they are exempted from overtime
compensation under $ 39-3-406 (2)(a), MCA. We find little
validity to this argument.
In making this argument, Putman points out that a
dispatcher is responsible for day to day contact with the
drivers. It is contended that if a dispatcher, through error
of judgment, permits a vehicle to depart when the roads are
icy or calls a driver to duty when he is sick or fatigued, an
accident may result. While this may be true, it is clear
that such an error would not be the proximate cause of the
accident. In an opinion made in response to the question now
before us, the Interstate Commerce Commission found that a
dispatcher does not engage in any activities that directly
affect the safety of operation of motor vehicles. In the
--
Matter - Maximum Hours - Service - Motor Carrier Employees
of of of
Ex parte - - 28 M.C.C. 125. In this case this Court
No. MC 2,
will not disagree with a federal agency's own determination
of the extent of its jurisdiction. To do otherwise would
leave employees like McFarlane in limbo relative to wage and
hour regulation in violation of the policy of our statute and
Constitution. See Art. XII, Sec. 2, Mont.Cont. Therefore,
we find that dispatchers are not subject to the regulations
of the Secretary of Transportation concerning maximum hours.
Accordingly, they are not exempted from overtime requirements
contained in 5 39-3-405, FICA.
We find that the Department of Labor's findings that
Judith McFarlane, in her duties as a dispatcher, was entitled
to overtime wages was not an abuse of discretion. Therefore,
the District Co,urt's judgment is affirmed.