Montana Public Employee's Ass'n v. Montana Dept. of Transp.

• Decision Date: 30 January 1998
• Docket Number: No. 97-120,97-120
• Citation: 287 Mont. 229,954 P.2d 21
• Parties: , 135 Lab.Cas. P 33,643, 4 Wage & Hour Cas.2d (BNA) 691, 1998 MT 17 MONTANA PUBLIC EMPLOYEE'S ASSOCIATION, a Montana non-profit Corporation; on behalf of, as their union, Tim Fellows, Jerry Brown, and all other employees of the Montana Department of Transportation similarly situated, Plaintiffs and Appellants, v. MONTANA DEPARTMENT OF TRANSPORTATION, Defendant and Respondent.
• Court: Montana Supreme Court

Page 21

954 P.2d 21

287 Mont. 229, 135 Lab.Cas. P 33,643,

4 Wage & Hour Cas.2d (BNA) 691, 1998 MT 17

MONTANA PUBLIC EMPLOYEE'S ASSOCIATION, a Montana non-profit

Corporation; on behalf of, as their union, Tim Fellows,

Jerry Brown, and all other employees of the Montana

Department of Transportation similarly situated, Plaintiffs and Appellants, v. MONTANA DEPARTMENT OF TRANSPORTATION, Defendant and Respondent.

No. 97-120.

Supreme Court of Montana.

Submitted on Briefs May 15, 1997.

Decided Jan. 30, 1998.

Carter N. Picotte, Helena, for Plaintiffs and Appellants.

Mike Pickard, Human Resources Attorney, Montana Department of Transportation, Helena, for Defendant and Respondent.

NELSON, Justice.

¶1 The Montana Public Employee's Association (MPEA) appeals an order of the District Court for the First Judicial District, Lewis and Clark County, granting summary judgment in favor of the Montana Department of Transportation (MDT) in a controversy between the parties over the status of the "District Construction Allowance" (DCA) paid to certain MDT employees. We reverse and remand.

¶2 The sole issue raised on appeal is whether the District Court erred in determining that the DCA may not be included in the base pay of MDT employees for the purpose of calculating overtime.

Factual and Procedural Background

¶3 MDT employs a limited number of individuals in its construction bureau whose job sites change from time to time. For that reason, reporting stations have been established in various locations so that employees can report to work at a location closer to their homes. MDT then provides transportation from the reporting station to the actual work site during work hours.

¶4 MPEA acts as a labor union on behalf of public employees. MPEA and MDT negotiated a collective bargaining agreement on September 27, 1991, wherein they agreed that an allowance, the DCA, would be paid to certain construction bureau employees based upon the distance they travel from their home to the reporting station. This agreement was reaffirmed by the parties on several occasions, the last, prior to the filing of the complaint, being May 10, 1994. Eligibility for the DCA is based on the relationship of the reporting station to the central post office of the employee's home town. Employees who reside in reasonable proximity to a reporting station or work site do not receive the DCA.

¶5 The DCA is found in a supplement to the collective bargaining agreement between the parties. It provides, in part:

1. Purpose and Application

a. Purpose: The purpose of this policy is to provide an allowance for District Construction personnel who are assigned to a project by the appropriate authority. This allowance is intended to accommodate special circumstances of employees in the District Construction offices who must report to different reporting stations. It is not provided as per diem, and employees are not considered to be in a travel status anytime they are covered under this policy.

b. Application: This policy will apply only to District Construction personnel who are subject to assignment to projects which require them to report to a designated reporting station in excess of twenty (20) miles one way from the central post office in the community in which he/she resides, or if the employee prefers a rural location, he/she will be considered to be residing at the central post office in the nearest city, town or community for mileage calculations only.

c. "Designated Reporting Station" means a collecting point for state vehicles, an office located in a town, the field office, the district office or other location serving the best interest of the Department. Reporting stations will be established where reasonable accommodations are available. Management will be the sole determiner of "reasonable accommodations." d. "Designated Shift" means a shift in which the employee actually works two (2) or more hours with the remainder of the regular shift in a pay status.

Supplemental to Master Contract for Department of Transportation Non-Maintenance Unit (May 10, 1994), pp. 8-9.

¶6 On May 9, 1995, MPEA filed a complaint against MDT seeking a Declaratory Judgment and alleging that the DCA should be treated as an element of an employee's base pay for purposes of calculating overtime compensation. On January 17, 1996, MPEA filed an amended complaint basing its claim, in part, on the provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 through 219.

¶7 MPEA and MDT stipulated to the facts and agreed that the FLSA controls. The parties filed cross motions for summary judgment. On December 10, 1996, the District Court entered its Order on Motions for Summary Judgment wherein the court concluded that since the DCA was reimbursement for travel expenses, it could not be included in an employee's base pay for purposes of calculating overtime compensation. MPEA appealed.

Standard of Review

¶8 Our standard of review in appeals from summary judgment rulings is de novo. Motarie v. N. Mont. Joint Refuse Disposal (1995), 274 Mont. 239, 242, 907 P.2d 154, 156 (citing Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785). When we review a district court's grant of summary judgment, we apply the same evaluation as the district court based on Rule 56, M.R.Civ.P. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. In Bruner, we set forth our inquiry:

The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. We review the legal determinations made by a district court as to whether the court erred.

Bruner, 900 P.2d at 903 (citations omitted).

Discussion

¶9 Whether the District Court erred in determining that the DCA may not be included in the base pay of MDT employees for the purpose of calculating overtime.

¶10 The parties agree that there are no factual disputes in this case and that the FLSA is controlling. The FLSA is a federal statute establishing minimum wage, overtime pay, child labor, and equal pay requirements. 29 C.F.R. § 778.0 (1997). The Department of Labor (DOL) is responsible for determining the operative definitions of the terms used in the FLSA through interpretive regulations and as a general rule, DOL regulations are entitled to judicial deference and are the primary source of guidance for determining the scope and extent of exemptions to the FLSA. Spradling v. City of Tulsa, Okl. (10th Cir.1996), 95 F.3d 1492, 1495 (citing Udall v. Tallman (1965), 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616).

¶11 Exemptions from or exceptions to the FLSA's requirements are to be narrowly construed against the employer asserting them. Donovan v. Brown Equipment & Service Tools, Inc. (5th Cir.1982), 666 F.2d 148, 153 (citing Arnold v. Ben Kanowsky, Inc. (1960), 361 U.S. 388, 392, 80 S.Ct. 453, 456, 4 L.Ed.2d 393). Furthermore, the employer bears the burden of showing that the employee fits "plainly and unmistakenly within the exemption's terms." Spradling, 95 F.3d at 1495 (citing Aaron v. City of Wichita (10th Cir.1995), 54 F.3d 652, 657 cert. denied 516 U.S. 965, 116 S.Ct. 419, 133 L.Ed.2d 336; Reich v. State of Wyoming (10th Cir.1993), 993 F.2d 739, 741).

¶12 Under the FLSA,

no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

29 U.S.C. § 207(a)(1) (1997) (emphasis added). An enterprise "engaged in commerce or in the production of goods for commerce" includes an enterprise that "is an activity of a public agency," 29 U.S.C. § 203(s)(1)(C) (1997), and a "public agency" includes the government or any agency of a state or a political subdivision of a state, 29 U.S.C. § 203(x) (1997).

¶13 Additionally, "regular rate" is defined in the FLSA as follows:

As used in this section the "regular rate" at which an employee is employed shall be deemed to include all remuneration for employment paid to, or on behalf of, the employee, but shall not be deemed to include--

...

(2) payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause; reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of his employer's interests and properly reimbursable by the employer; and other similar payments to an employee which are not made as compensation for his hours of employment; ...

29 U.S.C. § 207(e) (1997). Although the "regular rate" is a rate per hour, the FLSA does not require employers to compensate employees on an hourly rate basis; their earnings may be determined on a piece-rate, salary, commission, or other basis. 29 C.F.R. § 778.109 (1997). The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid. 29 C.F.R. § 778.109 (1997).

¶14 In granting summary judgment in favor of MDT, the District Court concluded that the DCA is not made as compensation for hours of employment or hours worked because employees receive the DCA regardless of the number of hours worked, so long as they work more than two hours in a shift. The court also...