Stewart v. Region II Child and Family Services
| Decision Date | 15 March 1990 |
| Docket Number | No. 89-082,89-082 |
| Parties | , 29 Wage & Hour Cas. (BN 1177, 115 Lab.Cas. P 35,344 In the Matter of Wage Claims of Randall P. STEWART, Allen W. Copeland, Lionel F. McKnire, Greg W. Branter, Arthur Briscoe, Petitioners and Respondents, v. REGION II CHILD AND FAMILY SERVICES, Respondent and Appellant. |
| Court | Montana Supreme Court |
Richard Larson; Waite, Schuster & Larson, Great Falls, for respondent and appellant.
Timothy J. McKittrick, McKittrick Law Firm, Great Falls, for petitioners and respondents.
Melanie A. Symons, Dept. of Labor & Industry, Janice Van Riper, Meloy Law Firm, Montana Residential Child Care Assoc., Nick Rotering, Dept. of Institutions, Cary B. Lund, Dept. of S.R.S., Patrick M. Driscoll, Chronister, Driscoll & Moreen, Mt. Council of Mental Health Centers, Helena, Joe R. Roberts, Mt. Assoc. of Independent Disabilities Services, Helena, for amicus curiae.
Region II, Child and Family Services, Inc., appeals the First Judicial District Court, Lewis and Clark County, review of administrative hearings held by the Montana Department of Labor and Industry. The District Court reversed the agency's determination that live-in employees were not entitled to compensation for time spent sleeping during supervision of residential care facilities and ordered the appellant to pay back wages, liquidated damages, costs, and attorney fees against the employer. We reverse.
Appellant Region II, Child and Family Services, Inc., raises the following issues.
(1) Did the District Court err in substituting its own findings of fact for those of
the Montana Department of Labor and Industry?
(2) Did the District Court err in holding that the respondents' wage claims were subject to the Montana Minimum Wage and Maximum Hour Act as well as the federal Fair Labor Standards Act?
(3) Did the District Court err in holding that the claimants' sleep time was compensable?
(4) Did the District Court err in rejecting interpretative opinions of the Administrator of the Wage and Hour Division of the United States Department of Labor?
(5) Did the District Court err in holding that Region II was not entitled to use the good faith defense of the federal Portal to Portal Act?
(6) Did the District Court err in holding that the claimants were entitled to damages, penalties, costs and attorney fees?
The claimants cross-appeal the issue of whether the District Court erred in failing to award attorney fees based on the claimants' contingency agreement or in the alternative to apply a multiplier to the award.
Region II, Child and Family Services, Inc., is a private, nonprofit corporation which, under contract with the State of Montana, provides residential care facilities for the developmentally disabled and multiple handicapped.
The wage claimants worked at Region II's group homes between 1983 and 1985 as either full-time or weekend trainers and supervisors. Weekend trainers reported to the group home Friday afternoon and remained until Sunday evening. Full-time trainers covered from Sunday night through Friday morning. The full-time employees were on duty, and required to actively supervise clients, from about 7:00 a.m. until 10:00 a.m., when the clients left to attend training programs at the Great Falls Easter Seals Center. Typically, full-time trainers were off duty and free to leave the facilities until the clients returned from school. This four- to nine-hour period was the only time they were free to leave the group home. As the Center provided no training on Saturday or Sunday, weekend employees were required to be on duty throughout each day.
Region II required both types of employees to remain at the group homes overnight and provided sleeping facilities. The overnight period lasted from about 10:00 p.m. to 7:00 a.m. Employees who received five consecutive hours of uninterrupted sleep during this period were compensated only for the time they spent attending clients. If employees did not receive five consecutive hours of uninterrupted sleep, Region II paid for the entire overnight period. Region II established this overnight policy in compliance with two interpretative opinions, known as the White and Cohen letters, issued by the Wage and Hour Division of the United States Department of Labor. The claimants understood the overnight policy when they went to work for Region II.
The claimants filed individual wage claims with the Montana Department of Labor and Industry [hereinafter the Department] for the uncompensated sleep time Region II required them to be present at the group homes. The Department consolidated the claims and held an administrative hearing. The hearing examiner rejected the claims after applying the federal Fair Labor Standards Act [hereinafter F.L.S.A.] (codified at 29 U.S.C. Secs. 201 through 219) and interpretative opinions of the Administrator of the Wage and Hour Division of the United States Department of Labor.
The claimants appealed to the First Judicial District Court for judicial review of the Department's decision, claiming error in the Department's use of the F.L.S.A. as opposed to the Montana Minimum Wage and Maximum Hour Act [hereinafter M.W.M.H.A.] (codified at Secs. 39-3-401 through -410, MCA). The District Court reversed the Department's decision. It agreed with the Department that the F.L.S.A. applied to the claims, but rejected the White and Cohen opinion letters as contrary to legislative intent and held that the F.L.S.A. regulations required that overtime be paid in Region II petitioned the court for another review arguing that the good faith defense of the federal Portal to Portal Act [hereinafter P.P.A.] (codified at 29 U.S.C. Secs. 216, 251 through 262) barred the wage claims under federal law. The District Court denied second review reasoning that even if the P.P.A. barred the claims under federal law, the M.W.M.H.A. would apply and produce the same result.
the claimants' situation. The District Court remanded the claims to the Department directing it to determine damages.
In compliance with the District Court's order, the Department ordered Region II to pay the claimants a total of $99,393.50 in back wages and an equal amount in penalties as required by Sec. 39-3-206, MCA. The Department found that it had no authority to grant the claimants' request for attorney fees. The District Court also reviewed this agency ruling at Region II's request and approved the Department's decision. The District Court further ordered Region II to pay the claimants $13,000 in attorney fees to cover expenses incurred by the claimants while before the District Court.
Region II now appeals the District Court's reversal of the Department's determination of no liability, denial of retrial, review of the Department's determination of damages and penalties, and judgment on attorney fees.
We note that Judge Gordon R. Bennett issued all the substantive orders and opinions that are now the subject of this appeal. The judge of record, Jeffrey M. Sherlock, handled only the final procedural matters following Judge Bennett's retirement in December of 1988.
A district court's review of an agency's findings of fact is strictly limited. The reviewing court may affirm the agency's findings. Section 2-4-704(2), MCA. It may clarify the agency's findings so long as it does not substitute its judgment for that of the agency. Montana State Highway Patrol Officers v. Board of Personnel Appeals (1984), 208 Mont. 33, 39, 676 P.2d 194, 198. The court may overrule an agency's findings of fact if they are clearly erroneous. They are not clearly erroneous if the record contains substantial credible evidence supporting the findings. City of Billings v. Billings Firefighters (1982), 200 Mont. 421, 430-31, 651 P.2d 627, 632. In no case may the district court substitute its own findings of fact for those of the agency. Section 2-4-704(2), MCA. The rules of agency review rely on the principle that the agency, and not the district court, is the finder of fact. If a factual question is essential to an agency's decision, and the agency's findings of fact are so insufficient that they cannot be clarified or are entirely absent, the district court should remand the case to the agency for appropriate findings.
In the present case, the District Court violated this principle by relying on its own findings of fact in at least two instances. The first instance centers on the Department's Finding of Fact No. 11 which states:
Allen Copeland was viewed by the respondent as working periods in excess of 24 hour duty. The other claimants were viewed by the respondent as residing on the premises for an extended period of time. (Emphasis added.)
The District Court correctly noted that this finding is little more than a recitation of the testimony. However, instead of clarifying the finding or remanding it to the Department, the court rejected the finding and proceeded as though the Department had come to the opposite conclusion. The court utilized 29 C.F.R. 785.21, a regulation which applied only if the claimants were not on duty in excess of twenty-four hours and did not live on the employer's property for an extended period. The court thereby substituted its own findings of fact for those of the Department in violation of section 2-4-704(2), MCA.
The second instance resulted from a disagreement between the Department and the District Court as to what law controlled. The Department determined that the F.L.S.A. governed the wage claims, but did not then look to the regulations propagated While the findings of fact necessary to apply the interpretative opinions and those necessary to apply the regulations are substantially the same, the District Court came upon at least one discrepancy. The court refused to apply one regulation, 29 C.F.R. 785.22, because the Department did not make the requisite finding...
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