Roto-Rooter Services Co. v. Department of Labor

• Decision Date: 16 July 1991
• Docket Number: ROTO-ROOTER,No. 14116,14116
• Citation: 593 A.2d 1386,219 Conn. 520
• Court: Connecticut Supreme Court
• Parties: , 30 Wage & Hour Cas. (BNA) 980 SERVICES COMPANY v. DEPARTMENT OF LABOR et al.

Page 1386

593 A.2d 1386

219 Conn. 520, 30 Wage & Hour Cas. (BNA) 980

ROTO-ROOTER SERVICES COMPANY v. DEPARTMENT OF LABOR et al.

No. 14116.

Supreme Court of Connecticut.

Argued March 22, 1991.

Decided July 16, 1991.

Gregory B. Nokes, Stamford, with whom were Kevin D. O'Leary and, on the brief, William H. Narwold, Hartford, for appellant (plaintiff).

Richard T. Sponzo, Asst. Atty. Gen., with whom, on the brief, were Clarine Nardi Riddle, then Atty. Gen., and Charles A. Overend, Asst. Atty. Gen., for appellees (defendants).

Before SHEA, GLASS, COVELLO, BORDEN and FRANCIS X. HENNESSY, JJ.

GLASS, Associate Justice.

The sole issue in this appeal is whether the trial court properly construed the phrase "commissions on ... services" in General Statutes § 31-76i(g), ¹ which exempts certain employers from the overtime pay requirements of General Statutes § 31-76c, ² to mean commissions earned by employees who only sell services. Because we conclude that the phrase also encompasses commissions earned by employees who perform services, we reverse.

This appeal arises from an administrative ruling by the defendant, the department of labor, ³ determining that the plaintiff, Roto-Rooter Services Company, did not qualify for exemption under § 31-76i(g), which provides in pertinent part: "The provisions of [General Statutes ss] 31-76b to 31-76j, inclusive, shall not apply with respect to ... any employee except outside salesmen (1) whose regular rate of pay is in excess of two times the minimum hourly rate applicable to him under section 31-58, (2) more than half of whose compensation for a representative period, being not less than one month, represents commissions on goods or services, and (3) who does not work more than fifty-four hours during a work week of seven consecutive calendar days...." The defendant's ruling was issued on the following stipulated facts. The plaintiff's employees sell the plaintiff's plumbing, drain and sewer cleaning products and services. They also perform the services sold. In response to the plaintiff's customers' service inquiries, the employees examine and determine the nature of the particular problem at the customers' premises. The employees then recommend and quote a price for the products and services necessary to rectify the problem. If the customers agree to purchase the recommended products and services, the employees provide the products and perform the services. The plaintiff pays the employees a fixed dollar "commission, which varies by the product, per unit of [the plaintiff's] product purchased" by the customers, and a percentage of the gross amount paid by the customers for any service performed. These payments are the sole sources of the employees' weekly income. Each employee's rate of pay, determined by dividing his or her total weekly earnings by the number of hours worked per week, exceeds twice the minimum hourly rate applicable under General Statutes § 31-58; see General Statutes § 31-76i(g)(1); and most of the employees work less than fifty-four hours during a work week of seven consecutive calendar days. See General Statutes § 31-76i(g)(3).

On these facts, the defendant found that while the plaintiff's employees satisfied the requirements of § 31-76i(g)(1) and (3), more than one half of their compensation did not represent "commissions on goods or services" within the meaning of § 31-76i(g)(2). With respect to § 31-76i(g)(2), the defendant determined that the phrase "commissions on goods or services" means commission compensation earned by employees who only sell goods or services. Since more than one half of the commission compensation earned by the plaintiff's employees derived from their performance, rather than sale, of services, the defendant ruled that the plaintiff did not qualify for exemption under § 31-76i(g).

The plaintiff challenged the defendant's adverse ruling by seeking a declaratory judgment in the Superior Court pursuant to General Statutes § 4-175(a). ⁴ Concluding that the defendant had interpreted and applied § 31-76i(g) correctly, the court rendered judgment for the defendant. Thereafter, the plaintiff appealed to the Appellate Court, and we transferred the appeal to this court in accordance with Practice Book § 4023.

On appeal, the plaintiff claims that the trial court improperly concluded that the compensation that its employees earn by performing services did not constitute "commissions on ... services" within the meaning of § 31-76i(g)(2). In the plaintiff's view, that phrase unambiguously encompasses compensation calculated on a commission basis and generated by the performance of services. The defendant contends that the exemption created by § 31-76i(g) is ambiguous because, unlike the duty-specific exemptions in the remaining subsections of § 31-76i, it does not expressly designate the duties an employee must undertake to earn "commissions on ... services." General Statutes § 31- 76i(g)(2). Drawing upon various interpretive aids, the defendant would resolve that purported ambiguity by attributing to the legislature an intent to confine the meaning of that phrase to commissions earned by employees who sell but do not perform services. We agree with the plaintiff that its employees' performance of services generates "commissions on ... services" within the meaning of § 31-76i(g)(2). ⁵

The legislature's failure to impose a duty-specific limitation on the scope of § 31-76i(g)(2) does not, in and of itself, render the exemption ambiguous. Because we are constrained to interpret statutory provisions as written; Ghent v. Planning Commission, 219 Conn. 511, 515, 594 A.2d 5 (1991); the clarity of legislative expression in § 31-76i(g)(2) must be determined by looking first to its language. Sanzone v. Board of Police Commissioners, 219 Conn. 179, 187, 592 A.2d 912 (1991). It is not what the legislature might have said, but rather, the meaning of what it did say, that dictates the scope of the exemption. See Stamford Ridgeway Associates v. Board of Representatives, 214 Conn. 407, 431, 572 A.2d 951 (1990); Schurman v. Schurman, 188 Conn. 268, 273, 449 A.2d 169 (1982).

What the legislature clearly did say in § 31-76i(g)(2) is that an employer whose employees earn "commissions on ... services" clears a preliminary hurdle to qualification for exemption from the overtime pay requirements of § 31-76c. In accordance with its commonly approved usage; see General Statutes § 1-1(a); the word "commission" means "a fee paid to an agent or employee for transacting a piece of business or performing a service"; (emphasis added) Webster's Third New International Dictionary; which fee is "usually calculated as a percentage on the amount of his transactions or amount received or expended." Black's Law Dictionary (5th Ed.1979). The plaintiff's employees, whose compensation is calculated as a percentage of the gross amount paid by customers for the services that they perform, undoubtedly earn "commissions" within the ordinary import of that word. Absent an express statutory definition, the words of a statute must be assigned their commonly approved meaning unless their context indicates that a different meaning was intended. DuBaldo v. Department of Consumer Protection, 209 Conn. 719, 722, 552 A.2d 813 (1989); see State v. Lubus, 216 Conn. 402, 407, 581 A.2d 1045 (1990); State Medical Society v. Board of Examiners in Podiatry, 208 Conn. 709, 721, 546 A.2d 830 (1988). ⁶ Notwithstanding the defendant's contrary assertion, ⁷ we find the statutory context of § 31-76i(g)(2) consistent with a construction of the phrase "commissions on ... services" that encompasses commissions earned by employees who perform services. Particularly significant is the conspicuous absence of any express limitation of subsection (g), in marked contrast to subsections (f), (i) and (j) of § 31-76i, to any type of "salesman." If the legislature had intended to confine the application of § 31-76i(g) to employees whose duties are restricted to selling, it certainly was aware of the explicit language with which it could do so. Furthermore, in the nature of a rule stated in direct operational terms; see 1A J. Sutherland, Statutory Construction (4th Ed. Sands 1985 Rev.) § 27.01; subdivision (3) of § 31-76i(g) mandates: "In determining the proportion of compensation representing commissions, all earnings resulting from the application of a bona fide commission rate shall be deemed commissions on ... services." This provision suggests that "commissions on ... services" within the meaning of § 31-76i(g)(2) are simply earnings calculated on a commission basis, without regard to whether employees generate such earnings by selling services. Finally instructive is the reference in § 31-76i(i) to compensation "paid on a commission basis as defined in the regulations of the labor commissioner issued pursuant to [General Statutes s] 31-60...." In the only regulation so issued, the definition of "commissions" is sufficiently broad to include commissions derived from the performance of services: " 'Commissions' means any premium or incentive compensation for business transacted whether based on per centum of total valuation or specific rate per unit of accomplishment...." Regs., Conn. State Agencies § 31-60-1(a). ⁸

Considering § 31-76i as a whole, therefore, we perceive no manifest legislative purpose to restrict the ordinary import of the phrase "commissions on ... services" in § 31-76i(g)(2) to earnings generated by employees who only sell, rather than perform services. The trial court, accordingly, should not have read such a restriction into § 31-76i(g)(2). Since it is undisputed that the plaintiff's employees satisfy the requirements of § 31-76i(g)(1) and (3), and we hold that those employees earn "commissions on ... services" within the meaning of § 31-76i(g)(2), the plaintiff qualifies for the exemption from § 31-76c under § 31-76i(g). ⁹

The judgment is reversed and the case is...