Bronken S Goodtime Co. v. Bishop

No. 82-220
I N THE SUPREME COURT OF THE STATE OF !O J A ; A
I TT TS
1982
B O K N ' S G O O D T I f E COfi'IFA'NY
R N E
P e t i t i o n e r and Respondent,
-vs-
DAVID J . BISHOP,
Respondent and A p p e l l a n t .
Appeal from: The D i s t r i c t C o u r t o f t h e E i g h t e e n t h J u d i c i a l D i s t -
r i c t , I n and f o r t h e County o f G a l l a t i n , The Eonor-
a b l e W. W, L e s s l e y , J u d g e p r e s i d i n g .
C o u n s e l o f Record:
For Appellant:
Wellcome & F r o s t , Bozeman, Montana
F o r Respondent:
Lyman B. B e n n e t t , 111, Bozeman, Montana
P a u l J. Van T r i c h t , Dept. o f L a b o r , H e l e n a ,
F4ontana.
Submitted on B r i e f s : September 9 , 1932
Decided: December 6 , 1982
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
Plaintiff appealed from a District Court reversal of a
hearing officer's award to plaintiff of wages and a penalty
due from defendant employer. We vacate the judgment and
reinstate the hearing officer's decision.
John Bronken incorporated defendant corporation in
March, 1979, with the anticipation of being a wine distri-
butor because the wine initiative had passed, legalizing the
sale of wine in grocery stores as of July 1, 1979. In early
April, 1979, plaintiff and John Bronken, president of
defendant corporation, met at the Elks Club in Bozeman,
Montana, to discuss the terms of plaintiff's employment with
defendant. Plaintiff was to be the head of the wine depart-
ment. There is a conflict of testimony as to what was
agreed upon at this meeting. Defendant claims that the
union contract under which some of his other employees were
hired was discussed in relation to plaintiff's hourly wage
only (plaintiff was paid as a driver-salesman under the
contract) and that the rest of the union contract at issue
here was not applicable to plaintiff. Plaintiff claims that
all aspects of his employment were to be governed by the
entire union agreement.
Plaintiff requested to be paid weekly as was customary
with the union employees, but plaintiff also expressed dis-
approval of joining the union so money which would have
ordinarily gone to his union pension and hospitalization
benefits was paid to him directly. The topics of sick
leave, vacation pay and overtime compensation were not
addressed at this meeting.
Prior to April 16, 1979, plaintiff went to defendant's
offlce to obtain some sweeping compound to clean out
plaintiff's apartment and Bronken gave plaintiff a copy of
the union agreement. No portions of this agreement were
edited or stricken out.
Although plaintiff did not actually appear at
defendant's place of business to begin working until April
23, 1979, his pay raises indicate that his official hiring
date was April 16, 1979. His duties were to manage and set
up the wine department for defendant and included promoting
the wines defendant wholesaled to restaurants and managing
the accounts thus set up.
Dan Rasmussen was hired on a day-to-day basis for
approximately two weeks to assist in setting up the wine
department in its initial stages and, at the end of that
time, was laid off. During the fall of 1979, Gary Johnson
was hired as a wine deliverer, which included delivering
wine that plaintiff had presold. Johnson also received
instructions from plaintiff on displays to be built and on
keeping store shelves stocked with wine. John Bronken
testified that Johnson reported directly to plaintiff and no
one else.
Plaintiff was discharged on April 14, 1980, and on
June 17, 1980, plaintiff filed a wage claim with the Labor
Standards Division of the Department of Labor and Industry,
alleging that defendant owed him wages including overtime
and payment for holidays, vacations and for working on his
birthday. On January 19, 1981, a hearing was held before a
hearing officer of the Labor Commission. The hearing
officer found that the union contract was the best indicator
of the employment relationship between plaintiff and
defendant and that it governed said relationship. 'The
h e a r i n g o f f i c e r a l s o found t h a t p l a i n t i f f was n o t a s u p e r -
v i s o r a n d t h a t d e f e n d a n t owed p l a i n t i f f $1,404.48 i n wages
which i n c l u d e d o v e r t i m e , v a c a t i o n p a y , and f o u r h o u r s p a y o n
t h e day of d i s c h a r g e and t h a t d e f e n d a n t owed a p e n a l t y o f
$1,404.48 by v i r t u e o f s e c t i o n 39-3-206, MCA.
On February 20, 1981, the Department of Labor and
Industry ordered defendant to pay these two sums to the
Department t o hold i n t r u s t f o r p l a i n t i f f . The D e p a r t m e n t
order was appealed to the Eighteenth Judicial District
C o u r t , G a l l a t i n County, and t h e Department i n t e r v e n e d . The
D i s t r i c t Court reversed t h e hearing o f f i c e r ' s determination
and found that defendant owed plaintiff nothing because
t h e r e was no m u t u a l consent with regard t o overtime pay,
h o l i d a y pay o r p a y f o r t h e day of discharge. Motions to
amend t h e D i s t r i c t C o u r t o r d e r w e r e d e n i e d . The D e p a r t m e n t
and plaintiff appeal from the District Court decisions
reversing the hearing officer I s decision and denying the
m o t i o n t o amend.
W e f r a m e t h e i s s u e s on a p p e a l t h u s :
(1) Was the hearing officer's conclusion that the
u n i o n a g r e e m e n t g o v e r n e d t h e employment r e l a t i o n s h i p b e t w e e n
plaintiff and defendant c l e a r l y erroneous i n view of the
reliable, probative and s u b s t a n t i a l e v i d e n c e on t h e whole
record?
(2) Was the hearing officer's determination that
p l a i n t i f f was n o t a s u p e r v i s o r c l e a r l y e r r o n e o u s i n v i e w o f
the reliable, probative and substantial evidence on the
whole r e c o r d ?
Before addressing t h e s e i s s u e s , we i n i t i a l l y t a k e n o t e
of the scope of judicial review of agency decisions:
"(2) The court may not substitute its
judgment for that of the agency as to the
weight of the evidence on questions of
fact. The court may affirm the decision
of the agency or remand the case for fur-
ther proceedings. The court may reverse
or modify the decision if substantial
rights of the appellant have been preju-
diced because the administrative find-
ings, inferences, conclusions, or deci-
sions are:
"(a) in violation of constitutional or
statutory provisions;
"(b) in excess of the statutory authority
of the agency;
"(c) made upon unlawful procedure;
"(d) affected by other error of law;
"(e) clearly erroneous in view of the
reliable, probative, and substantial
evidence on the whole record;
"(f) arbitrary or capricious or charac-
terized by abuse of discretion or clearly
unwarranted exercise of discretion; or
"(g) because findings of fact, upon
issues essential to the decision, were
not made although requested." Section 2-
4-704(2), MCA.
Our limited scope of judicial review of agency
decisions was recently discussed in State ex rel. Montana
Wilderness Association et al. v. Board of Natural Resources
and Conservation et al. (1982), - Mont . , 648 P.2d
734, 39 St.Rep. 1238. A court may not reverse the agency
decision unless substantial rights of the appellant have
been prejudiced because the agency determination was clearly
erroneous in light of the reliable, probative and substan-
tial evidence (section 2-4-704(2)(e), MCA). Also, a review-
ing court may not substitute its judgment for that of the
agency's as to the weight of the evidence on questions of
fact (section 2-4-704(2), MCA). In Montana Wilderness
Association, s u p r a , w e n o t e d t h a t o u r r e v i e w was l i m i t e d t o
d e t e r m i n i n g whether t h e a d m i n i s t r a t i v e b o d y ' s d e c i s i o n was
s u p p o r t e d by s u b s t a n t i a l e v i d e n c e .
Regarding t h e f i r s t i s s u e , p l a i n t i f f a r g u e s t h a t t h e r e
are a number of c o r r e l a t i o n s between the parties' actual
c o n d u c t and t h e terms o f t h e u n i o n a g r e e m e n t , i n c l u d i n g t h e
facts that plaintiff received in cash the equivalent of
union health and pension benefits, he was paid on all
holidays mentioned in the union agreement except his
b i r t h d a y a n d was p a i d w e e k l y a s were m o s t u n i o n e m p l o y e e s .
P l a i n t i f f f u r t h e r a r g u e s t h a t t h e r e was a n i m p l i e d c o v e n a n t
of good faith and fair dealing in employment c o n t r a c t s ,
c i t i n g G a t e s v. L i f e of Montana I n s u r a n c e Company (1982),
,
- Mont. - 638 P.2d 1 0 6 3 , 39 S t . R e p . 1 6 , and t h a t s i n c e
d e f e n d a n t c r e a t e d t h e a m b i g u i t y i n t h e employment c o n t r a c t ,
t h e a m b i g u i t y s h o u l d be r e s o l v e d a g a i n s t d e f e n d a n t .
Appellant Department contends t h a t t h e D i s t r i c t Court
e r r e d i n a p p l y i n g t h e law of e x p r e s s c o n t r a c t s t o t h e f a c t s
and t h a t t h e h e a r i n g o f f i c e r c o r r e c t l y a p p l i e d t h e l a w o f
implied contracts. The D e p a r t m e n t t h e n r e a s o n s t h a t c o n d u c t
of t h e d e f e n d a n t r e q u i r e d a f i n d i n g t h a t t h e union c o n t r a c t
was a n i m p l i e d p a r t o f t h e employment b e t w e e n p l a i n t i f f a n d
defendant.
D e f e n d a n t c o n c e d e s t h a t t h e p o r t i o n s o f t h e u n i o n con-
t r a c t r e l a t i n g t o wages, reimbursement f o r t r a v e l expenses
a n d h e a l t h and p e n s i o n b e n e f i t s w e r e i n c o r p o r a t e d i n t o t h e
employment a g r e e m e n t , b u t a r g u e s t h a t t h e r e was no m u t u a l
c o n s e n t w i t h r e g a r d t o o v e r t i m e , h o l i d a y p a y and p a y o n d a y
of d i s c h a r g e . Defendant f u r t h e r a r g u e s t h a t t h e r e must have
been a s p e c i f i c i d e n t i f i c a t i o n of t h e terms of the union
agreement to be incorporated into the employment agreement
between plaintiff and defendant before adoption by reference
may be had and, since there was no discussion of those terms
at the meeting at the Elks Club, they may not be incorpor-
ated.
There was substantial evidence here to support the
hearing officer's findings. We affirm them. Matter of Shaw
(19tiO), - Mont . , 615 P.2d 910, 37 St.Rep. 1480. It
is clear from the record that plaintiff's employment con-
tract paralleled the union contract in numerous ways includ-
ing paid holidays, health and pension benefits, weekly pay-
checks and travel expense reimbursement. It is also uncon-
troverted that defendant furnished plaintiff with a copy of
the union agreement with no portions deleted or marked out.
The hearing officer could reasonably conclude, as he did,
that the union contract could also be looked to for the
contested portions of plaintiff's pay, i.e., overtime, vaca-
tion pay, payment on the day of discharge, and holiday pay.
The focus of the second issue involves the hearing
ofricer's rejection of defendant's claim that plaintiff
acted in a supervisory capacity and was thus exempt from
overtime pay consideration. Plaintiff argues that even if
the union agreement is not incorporated into the employment
agreement, it is clear that plaintiff is still entitled to
the overtime wages awarded because plaintiff was not a
supervisor or bona fide executive under section 39-3-
406(l)(j), MCA. To be a bona fide executive requires that
the individual customarily and regularly supervise at least
two fulltime employees or the equivalent. Rosebud County v.
Roan (198l), - Mont . , 627 P.2d 1222, 38 St.Rep. 639.
See also, Garsjo v. Department of Labor and Industry (1977),
172 Mont. 182, 562 P.2d 473.
Defendant employer points to the fact that Gary
Johnson basically worked for plaintiff and that plaintiff
was also responsible for the supervision of Dan Rasmussen
who was hired for approximately two weeks to help set up the
wine displays.
There was substantial credible evidence to support the
hearing officer's determination. Shaw, supra. The record
wholly fails to show that plaintiff customarily and regu-
larly supervised at least two fulltime employees. At best,
plaintiff regularly exercised authority over one employee
(Johnson) in certain aspects of Johnson's job (Johnson would
deliver wine that plaintiff had presold). Plaintiff did not
customarily and regularly supervise Rasmussen.
Accordingly, the District Court decision is vacated,
and the hearing officer's determination is reinstated.
b-dna$&-iidg.
Chief ce
J U S ~
We concur:
7 fl