Arlington v. Miller's Trucking, Inc.

• Decision Date: 03 March 2015
• Docket Number: No. DA 14–0331.,DA 14–0331.
• Parties: Oliver W. ARLINGTON, Petitioner and Appellant, v. MILLER'S TRUCKING, INC., a Montana Corporation, Respondent and Appellee.
• Court: Montana Supreme Court

378 Mont. 324

343 P.3d 1222

2015 MT 68

Oliver W. ARLINGTON, Petitioner and Appellant

v.MILLER'S TRUCKING, INC., a Montana Corporation, Respondent and Appellee.

No. DA 14–0331.

Supreme Court of Montana.

Submitted on Briefs Oct. 29, 2014.

Decided March 3, 2015.

For Appellant: Oliver W. Arlington (self-represented); Philipsburg, Montana.

For Appellee: Brian J. Smith, Kathryn S. Mahe, Garlington, Lohn & Robinson, PLLP; Missoula, Montana.

Opinion

Justice James JEREMIAH SHEA delivered the Opinion of the Court.

¶ 1 Oliver W. Arlington appeals from an order of the Third Judicial District Court, Granite County, denying his petition for judicial review of the final agency decision issued by the Montana Department of Labor and Industry Hearings Bureau (Department). We affirm in part, reverse in part, and remand to the District Court with instructions to remand to the Hearing Officer for further proceedings consistent with this opinion.

¶ 2 We restate the issues on appeal as:

1. Did substantial evidence support the Hearing Officer's finding that Arlington and Miller's did not have an oral employment agreement guaranteeing over $60,000 per year in wages?

2. Are the Hearing Officer's conclusions of law contrary to applicable wage and hour law?

3. Are the Hearing Officer's factual findings clearly erroneous?

4. Did the Hearing Officer abuse his discretion when he refused to admit documents pertaining to regulatory violations by Miller's?

¶ 3 Arlington raises several other issues on appeal, none of which were raised below. We generally refuse to consider issues raised for the first time on appeal; therefore, we do not address those issues. City of Missoula v. Moore, 2011 MT 61, ¶ 13, 360 Mont. 22, 251 P.3d 679.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 4 Arlington worked as a log truck driver for Miller's Trucking from September 2008 through August 2009. Arlington claims he is owed wages in accordance with a verbal employment agreement which guaranteed him $60,000 to $70,000 a year. Arlington also claims he is owed unpaid overtime wages.

¶ 5 Arlington filed a wage claim with the Department and a contested hearing was held on March 9, 2011. After the conclusion of the hearing, the Hearing Officer dismissed Arlington's claims, finding that there was no agreement for a guaranteed wage of over $60,000 annually and holding that Arlington was exempt from the Fair Labor Standards Act's (FLSA) overtime requirements and therefore was not entitled to overtime pay. The District Court affirmed that decision, and Arlington appealed. In his first appeal, we held that Arlington should have been permitted to obtain and introduce into evidence job advertisements issued by Miller's. Arlington v. Miller's Trucking, Inc., 2012 MT 89, ¶ 25, 364 Mont. 534, 277 P.3d 1198 (Arlington I ). We further held that Arlington was not an exempt employee under the FLSA. Arlington I, ¶ 45. Based on those holdings, we reversed and remanded for a determination of whether the ads bore on Arlington's claim that there was an employment agreement for over $60,000 per year and a determination of the amount of overtime pay owed to Arlington. Arlington I, ¶ 46.

¶ 6 On remand, Arlington was permitted to introduce Miller's job advertisements into evidence. The Hearing Officer found, however, that even in light of the ads, there was still no agreement for a guaranteed wage in excess of $60,000 per year.

¶ 7 Regarding his unpaid overtime claim, Arlington presented evidence of the hours he had worked, showing extensive overtime. Miller's attacked the credibility of Arlington's evidence, presenting evidence suggesting Arlington'sclaimed hours were grossly inflated. The Hearing Officer found that Miller's was unable to keep records of Arlington's hours because Arlington failed to provide Miller's with his hours as requested at the end of each pay period. The Hearing Officer then found that Arlington's records of the hours he worked were not credible because: 1) they were internally inconsistent; 2) they were in conflict with credible testimony from other employees that Arlington was seen resting in his truck for hours that he claimed he was working; and 3) they were inconsistent with the credible testimony of other employees that it took them substantially less time to complete the same work than Arlington was claiming. The Hearing Officer accordingly found that Arlington failed to produce sufficient evidence to show the number of hours he worked.

¶ 8 On review, the District Court affirmed. Arlington appeals.

STANDARDS OF REVIEW

¶ 9 When reviewing a district court's decision regarding the review of an agency action, the Montana Administrative Procedure Act governs this Court's review, and the scope of review is limited. Citizens Awareness Network v. Mont. Bd. of Envtl. Rev., 2010 MT 10, ¶ 13, 355 Mont. 60, 227 P.3d 583. Under § 2–4–704(2)(a), MCA, a 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 reverse or modify the decision if substantial rights of the appellant have been prejudiced because:

(a) the administrative findings, inferences, conclusions, or decisions are:

(i) in violation of constitutional or statutory provisions;

(ii) in excess of the statutory authority of the agency;

(iii) made upon unlawful procedure;

(iv) affected by other error of law;

(v) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;

(vi) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Section 2–4–704(2)(a), MCA.

¶ 10 The same standards used by the district court are applied when reviewing a district court order affirming or reversing an agency decision. Ostergren v. Dep't of Revenue, 2004 MT 30, ¶ 11, 319 Mont. 405, 85 P.3d 738. In contested cases, district courts review administrative decisions to determine whether the findings of fact are clearly erroneous and whether the agency determined the law correctly; we review the district court's decision in the same way. Ray v. Mont. Tech of the Univ. of Mont., 2007 MT 21, ¶ 24, 335 Mont. 367, 152 P.3d 122. If a finding is not supported by substantial evidence, the court misapprehended the effect of evidence, or if this Court's review of the record convinces us a mistake has been made, a finding is deemed clearly erroneous. Montanans v. State, 2006 MT 277, ¶ 19, 334 Mont. 237, 146 P.3d 759.

DISCUSSION

¶ 11 1. Did substantial evidence support the Hearing Officer's finding that Arlington and Miller's did not have an oral employment agreement guaranteeing over $60,000 per year in wages?

¶ 12 The Hearing Officer held that the job postings at issue in Arlington's first appeal only established that Miller's sometimes told prospective employees that drivers “typically” earned $60,000. The Hearing Officer found that even in light of the job postings, there was no oral employment agreement guaranteeing Arlington $60,000 or more per year. The owner of Miller's and several employees testified that compensation was based only on 25% of the load value for every load drivers hauled and that there was no guarantee as to how much a trucker would make annually. The Hearing Officer found that testimony credible. Our review of the record establishes that there was sufficient credible evidence to support the Hearing Officer's determination.

¶ 13 2. Are the Hearing Officer's determinations contrary to applicable wage and hour law?

¶ 14 Arlington argues the Hearing Officer's determination that Arlington's claims should be denied in their entirety stems from a misapplication of the relevant legal standards. Arlington's arguments boil down to two contentions: first, that the Hearing Officer erred when he found that Miller's failure to keep records of Arlington's time was Arlington's fault; second, that the Hearing Officer applied a higher standard to Arlington's burden of proof to establish his hours than was actually required by relevant case law.

¶ 15 Both federal and Montana law require employers to pay employees overtime wages, unless an exemption applies. Under the federal Fair Labor Standards Act (FLSA) and Montana law, an employer is required to pay overtime of at least one and one-half times of an employee's regular rate of pay for hours worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1) (2008) ; § 39–3–405(1), MCA. If an employer does not comply with this provision, an employee may maintain an action against the employer to recover unpaid overtime compensation, penalties, and possibly liquidated damages. 29 U.S.C. § 216(b) (2008) ; §§ 39–3–206 to –207, MCA.

¶ 16 To ensure employees are paid overtime when it is owed, both federal and state laws require employers to keep records of employee's hours. 29 U.S.C. § 211(c) ; Mont. Admin. R. 24.16.6102(1)(g). In Garsjo v. Dep't of Labor & Indus., we adopted the U.S. Supreme Court's approach to determining an employee's claims for unpaid overtime when the employer did not keep records of the employee's time. Garsjo v. Dep't of Labor & Indus., 172 Mont. 182, 188–89, 562 P.2d 473, 476–77 (1977) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687, 66 S.Ct. 1187, 1192, 90 L.Ed. 1515 (1946) ). In Anderson v. Mt. Clemens Pottery Co., the U.S. Supreme Court held that when the employer fails to record the employee's hours, the employee's records may be used to determine the amount of time worked. Anderson, 328 U.S. at 687, 66 S.Ct. at 1192. The employee may substantiate his claim by showing “that he has in fact performed work for which he was improperly compensated and [producing] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.” Garsjo, 172 Mont. at 188–89, 562 P.2d at 476–477 (quoting Anderson, 328 U.S. at 687, 66 S.Ct. at 1192).

Miller's Failure to Keep Records of Arlington's Hours

¶ 17 The Hearing Officer's attribution of fault to Arlington for Miller's failure to keep records of his hours is...