Young v. State
| Decision Date | 01 September 2004 |
| Docket Number | No. 97C-10933; A114099 Control, No. A113141, No. A113645. |
| Citation | 96 P.3d 1239,195 Or.App. 31 |
| Parties | David YOUNG, Appellant, and Larry D. Conn, Leonard J. Drung, Jess Eastman, Debra E. Fery, Bruce L. Fochtman, Lois G. Harris, Cheryl L. Ho, Lloyd Horsley, Wilfred Hudson, Mark A. Jones, Robert Jordan, David C. Judkins, David Kunz, Gordan J. Larson, Margaret J. Loftis, Judy Murray, Scott R. Proctor, Richard Reiter, Helen Satterlee, Ernest Schmidt, Marjorie J. West, James C. Wilson, Randal Windsor, and Michael D. Woodward, Other-Appellants, v. STATE of Oregon, Respondent. David Young, Al Chandler, Mike Reinecke, Karen Eastman (Memory), Appellants, v. State of Oregon, Respondent. David Young, Appellant-Cross-Respondent, v. State of Oregon, Respondent-Cross-Appellant. |
| Court | Oregon Court of Appeals |
John Hoag argued the cause and filed the briefs for appellants. With him on the combined reply and cross-answering brief was David Snyder.
Daniel Casey, Assistant Attorney General, argued the cause for respondent—cross-appellant. With him on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Assistant Solicitor General.
Before HASELTON, Presiding Judge, and DEITS, Chief Judge,1 and WOLLHEIM, Judge.
Plaintiff Young and other members of the plaintiff class (plaintiffs) appeal from several orders and judgments in this class action, raising three issues concerning the trial court's decisions. We granted leave to file an interlocutory appeal from the orders, see ORS 19.225, and the judgments complied with the requirements of ORCP 67 B that existed when the trial court entered them and when plaintiffs filed their appeals. Defendant cross-appeals from a portion of one order that favored plaintiffs.2 We modify the trial court's decision on appeal and affirm on cross-appeal.
Plaintiff filed this case as a class action on behalf of himself and all other state employees whom the state considered to be exempt from the payment of overtime compensation or whom it allowed to accrue compensatory time when working more than 40 hours a week. He argued that ORS 279.340(1) (1995),3 required the payment of overtime to plaintiffs for work occurring between the effective dates of the 1995 amendment extending its coverage to state employees and the 1997 amendment applying the exemption provided in ORS 279.342(5) (1995) to those employees.
Since the 1995 amendment, ORS 279.340(1) has provided:
Or. Laws 1995, ch. 286, § 26. Before the 1995 amendment to ORS 279.340, the statute required the payment of overtime compensation only to employees of "a county, municipality, municipal corporation, school district or subdivision." At the same time, ORS 279.342(5)(a) exempted employees of the same entities whose employment was "executive, administrative, supervisory or professional" from the requirements of the statute. Thus, before 1995, the employers who were subject to the statutory requirement to pay overtime were identical to the employers whose executive, administrative, supervisory, or professional ("white collar") employees were exempt from that requirement. However, when the legislature amended ORS 279.340(1) in 1995 to extend the requirement to pay overtime to all public employers, including the state, it did not make a comparable amendment to ORS 279.342(5)(a). As a result, between 1995 and 1997, there was no statutory provision that exempted "white collar" state employees from the right to overtime compensation.
Plaintiff Young is a "white collar" state employee who worked in excess of 40 hours a week during the pertinent time period. He argued to the trial court that the unambiguous language of the statutes entitled him to compensation for that overtime. In response, the state argued that the failure to provide the same exemption for state employees as for local government employees was a legislative drafting mistake that the court should ignore. According to the state, the court should apply its understanding of the legislature's intent rather than the actual meaning of the statute's words. The circuit court accepted that argument and decided the case on the merits in favor of defendant. In Young v. State of Oregon, 161 Or.App. 32, 983 P.2d 1044, rev. den., 329 Or. 447, 994 P.2d 126 (1999), (Young I), we reversed the trial court's decision. We held that the language of the statute was unambiguous and that there was no principled way to construe it to reach any result other than that plaintiff was entitled to compensation for working more than 40 hours a week. Id. at 39, 983 P.2d 1044. We rejected the various theories that the state proposed for ignoring the statutory language and remanded the case for entry of judgment for plaintiff. Id. at 39-40, 983 P.2d 1044.
On remand, the circuit court certified the case as a class action and entered a number of orders as part of processing the claims of the many members of the plaintiff class. Plaintiffs challenge three of those orders on appeal. First, the court held that the proper method for calculating plaintiffs' overtime compensation is the fluctuating hours method that applies in certain circumstances under the federal Fair Labor Standards Act (FLSA), 29 USC § § 201-219; see also 29 CFR & § 778.114. Second, it held that those plaintiffs whose employment terminated before defendant paid them their overtime compensation are entitled to penalty wages under ORS 652.150 only if the terminations occurred after January 26, 2000, the date of the issuance of the appellate judgment in Young I. Finally, it held that the state is immune from any obligation to pay prejudgment interest on the unpaid overtime and penalties.
Plaintiffs assign error to the first and third orders in their entirety and to the second order to the extent that it denies penalty wages to plaintiffs whose positions terminated on or before January 26, 2000. On cross-appeal, defendant assigns error to the second order to the extent that it awards penalty wages in any circumstance. We modify the order on the method of calculating overtime. Also, as we will explain more fully, we modify the trial court's decision by holding that those plaintiffs whose claims for penalty wages are based on terminations before June 2, 1999, are not entitled to penalty wages but that those plaintiffs whose wage claims are based on terminations after that date are entitled to penalty wages. Finally, we conclude that the state is immune from paying prejudgment interest. In view of our above holding, we affirm on the state's cross-appeal.
Plaintiffs first assign error to the trial court's decision to adopt the method for calculating overtime compensation that the Department of Labor has established under the FLSA when employees work fluctuating hours. We begin by examining the text and context of the applicable statute, ORS 279.340(1), because a statute's wording "is the best evidence of the legislature's intent." PGE v. Bureau of Labor and Industries, 317 Or. 606, 610, 859 P.2d 1143 (1993). Plaintiffs argue that the statute unambiguously requires calculating overtime compensation by dividing the employee's weekly salary by 40 and paying one and one-half times that amount for each hour in excess of 40 that the employee worked in a particular week. They point out that the state agrees that an employee who receives compensatory time when there are insufficient funds to pay overtime will receive one and one-half hours for every hour beyond 40 that the plaintiff worked. Plaintiffs' argument gives one possible meaning of the statutory language considered in isolation, but they fail to recognize that the statute has other possible meanings.
The text of ORS 279.340(1) provides that compensation shall be paid for overtime "at not less than one and one-half times the regular rate of such employment." (Emphasis added.) The statute does not define what the "regular rate" is. The foundation of plaintiffs' argument is their assumption that the statute establishes 40 hours as the regular work week for all state employees. If that were the case, plaintiffs would be entitled to one and one-half times their regular rate for every hour per week worked in excess of 40. That assumption, however, is not correct. The terms of the statute do not establish that the regular work week for any salaried employee is 40 or any other number of hours. Nothing in the statute is inconsistent with the employee having a regularly scheduled work week that is either shorter or longer than 40 hours or having a work week that varies from week to week with the demands of the job. In any of those situations, the "regular rate" of the employment will be something other than the weekly salary divided by 40.
We first look to provisions of the FLSA, on which the Oregon statute was modeled, for guidance in interpreting this statute. Similarly to ORS 279.340(1), the FLSA requires compensation for overtime hours "at a rate not less than one and one-half times the regular rate" of pay. 29 USC § 207(a)(1). The federal courts have consistently interpreted the "regular rate" provision of the FLSA to allow employers to pay a fixed salary for fluctuating hours. Overnight Motor Transport Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942); Marshall v. CHALA Enterprise, 645 F.2d 799 (9th Cir. 1981). Under the FLSA, the "regular rate" calculated on an hourly basis changes depending on the number of hours that an employee works....
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