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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Bruns v Municipality of Anchorage (06/01/2001) sp-5416

Bruns v Municipality of Anchorage (06/01/2001) sp-5416

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 

JOHN BRUNS and DENNIS         )
SAATHOFF,                     )    Supreme Court No. S-9394
                              )
             Appellants,      )    Superior Court No.
                              )    3AN-96-1677 CI
     v.                       )
                              )    O P I N I O N
MUNICIPALITY OF ANCHORAGE,    )
ANCHORAGE WATER & WASTEWATER  )    [No. 5416 - June 1, 2001]
UTILITY,                      )
                              )
             Appellee.        )
______________________________)




          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                     Eric T. Sanders, Judge.


          Appearances:  Kenneth W. Legacki, Anchorage,
for Appellants.  Theresa Hillhouse, Assistant Municipal Attorney,
Mary K. Hughes, Municipal Attorney, Anchorage, and Jill D. Bowman,
Stoel Rives LLP, Seattle, Washington, for Appellee.


          Before:  Fabe, Chief Justice, Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.  


          FABE, Chief Justice.


I.   INTRODUCTION
          John Bruns and Dennis Saathoff, former general foremen
for the Municipality of Anchorage's Anchorage Water and Wastewater
Utility, filed suit in Anchorage Superior Court in 1996 claiming
back overtime pay.  Bruns and Saathoff alleged that the
Municipality owed them overtime pay under federal, state, and
municipal law.  The superior court granted the Municipality's
motion for summary judgment and dismissed the plaintiffs' claims on
the basis that the plaintiffs failed to exhaust their
administrative remedies.  Bruns and Saathoff have appealed this
decision.  Because Bruns and Saathoff alleged that they were
threatened with discharge if they pursued their administrative
remedies, there is a factual issue as to whether their failure to
exhaust administrative remedies was excused.  Therefore, we reverse
and remand to the superior court for trial of this factual issue. 
II.  FACTS AND PROCEEDINGS
          John Bruns and Dennis Saathoff are former employees of
the Anchorage Water and Wastewater Utility, a utility owned by the
Municipality of Anchorage.  Both Bruns and Saathoff spent the last
phases of their careers at Anchorage Water and Wastewater Utility
as general foremen.  Bruns was a general foreman from June 11, 1983
until his retirement on January 26, 1996.  Saathoff was a general
foreman from 1979 or 1980 until his retirement on April 29, 1994. 
As general foremen, Bruns and Saathoff were "non-represented
employees" and not within a union's bargaining unit.
          The Municipality has an ordinance governing overtime pay
for non-represented Municipal employees such as Bruns and Saathoff.
Anchorage Municipal Code (AMC) 3.30.129(B)(1) states as a general
rule that "overtime" work [Fn. 1] must be compensated at one and
one-half times the normal pay rate.
          Sometime during 1995 it came to the attention of Thomas
Tierney, Director of the Municipality's Department of Employee
Relations, that the Municipality was inconsistently applying AMC
3.30.129.  In a meeting on October 3, 1995, Tierney reported to the
mayor and other Municipality officials that many non-represented
Municipality employees were entitled to overtime pay under AMC
3.30.129 but were not receiving it.  Tierney explained that the
employees did not "put in" for the overtime because they had the
impression that they were not entitled to it.  At the same time,
the Municipality considered amending AMC 3.30.129 to eliminate
overtime compensation for non-represented employees earning
salaries above a certain level, including both Bruns and Saathoff. 
The Municipality eventually passed an amendment that eliminated
overtime for some employees -- but for fewer than originally
contemplated. [Fn. 2]  This change took place after Bruns and
Saathoff both retired.
          Both Bruns and Saathoff claim that they worked overtime
during their tenure as general foremen, and were not fully
compensated for this overtime work.  Bruns claims that he responded
to an average of nine "call-outs" a year, and he claimed overtime
for at least some of these call-outs. [Fn. 3]  However, Bruns was
not paid for all of the call-outs that he claimed.  Bruns also
asserts that he was eligible for "standby" pay [Fn. 4] but did not
put in for it until the last few months of his career, because he
was under the impression that he would not get it if he asked for
it.  Saathoff also claims that he was on standby and did many call-
outs, and was not paid overtime pay for any of these services.
          On March 1, 1996, Bruns and Saathoff together filed suit
against the Municipality in Anchorage Superior Court, claiming an
entitlement to back overtime pay. [Fn. 5]  Because they based one
claim on the federal Fair Labor Standards Act [Fn. 6] (FLSA), the
Municipality removed the case to the U.S. District Court in
Anchorage.  Bruns and Saathoff also made claims under state and
municipal law; the U.S. District Court exercised supplemental
jurisdiction over these claims.
          The U.S. District Court granted the Municipality's motion
for summary judgment on the federal law claims, because Bruns and
Saathoff were "exempt" employees not subject to the FLSA.  It
remanded claims under state and municipal law to the superior
court.  The U.S. District Court entered final judgment, and the
U.S. Court of Appeals for the Ninth Circuit affirmed the grant of
summary judgment. [Fn. 7]
          In the superior court, the Municipality moved for summary
judgment on the plaintiffs' state and municipal law claims.  Bruns
and Saathoff filed an opposition to these motions, and the superior
court granted the Municipality's motions for summary judgment,
ruling that Bruns and Saathoff failed to exhaust their
administrative remedies.
          The Municipality moved for an award of attorney's fees
and costs, and the superior court awarded $24,421.00 in attorney's
fees to the Municipality.
          Bruns and Saathoff appeal the superior court's rulings.
III. STANDARD OF REVIEW
          This is an appeal of summary judgment entered by a
superior court, and therefore should be reviewed de novo. [Fn. 8] 
We will affirm a summary judgment if there are no genuine issues of
material fact and if the moving party is entitled to judgment as a
matter of law. [Fn. 9]
          This appeal requires us to decide whether the doctrine of
exhaustion of administrative remedies applies to a particular
claim; this is a question of law that we review de novo. [Fn. 10] 
If this doctrine applies, we will review for abuse of discretion
the lower court's findings on whether the available administrative
remedies were actually exhausted. [Fn. 11]  Any conclusions of law,
such as the conclusion that the failure to exhaust was excused,
will be reviewed using our independent judgment. [Fn. 12]
IV.  DISCUSSION
          In the superior court, the Municipality successfully
moved for summary judgment on all claims asserted by Bruns and
Saathoff.  The plaintiffs had two different groups of claims in
this suit: (i) a state law claim under the Alaska Wage and Hour
Act; and (ii) a municipal law claim under AMC 3.30.129(B) and AS
23.05.140(b).
          The plaintiffs have only appealed the dismissal of their
municipal law claims under AMC 3.30.129(B) and AS 23.05.140(b). 
Bruns and Saathoff have abandoned their state law (Alaska Wage and
Hour Act) claims [Fn. 13] on appeal, because the Municipality is
exempted from the Alaska Wage and Hour Act under AS 23.10.055(5).
[Fn. 14]  Therefore, the Alaska Wage and Hour Act is not applicable
to this case.
          The municipal law claims made by Bruns and Saathoff arise
under AMC 3.30.129(B), which requires the Municipality to pay
overtime compensation to its employees under some circumstances. 
This municipal law claim is bound up with a state statute, former
AS 23.05.140(b), which provided:
          If the employment is terminated, regardless of
the cause of termination, all wages, salaries, or other
compensation for labor or services become due immediately and shall
be paid within three working days after the termination at the
place where the employee is usually paid or at a location agreed
upon by the employer and employee.[ [Fn. 15]]

Former AS 23.05.140(b) required an employer to pay all wages due,
including overtime, upon termination of the employee.  Anchorage
Municipal Code 3.30.129(B), in turn defines what wages are due, and
are therefore required to be paid by AS 23.05.140(b). [Fn. 16] 
Anchorage Municipal Code 3.30.129(B) states as a general rule that
approved overtime work in excess of forty hours per week must be
compensated at one and one-half times the normal pay rate. [Fn. 17] 
The ordinance also defines and requires compensation for two
specialized types of overtime pay -- "call-out" pay and "standby"
pay. [Fn. 18]
          As already noted, the plaintiffs claim that they are
entitled to overtime pay owed to them under AMC 3.30.129(B); if
this is true, AS 23.05.140(b) demands that they be paid these
wages, since they must be paid wages due to them after termination. 
However, the superior court, in its decision granting the
Municipality's motion for summary judgment, held that the
plaintiffs' municipal law claim is foreclosed, because the
plaintiffs failed to exhaust the administrative remedies available
under AMC 3.30.101.  Anchorage Municipal Code 3.30.101 provides for
a three-step procedure for grievances filed by employees because of
disputes concerning AMC 3.30.129 and other matters. [Fn. 19]  The
three steps are: (1) "informal discussion," (2) decision by agency
head after receipt of a written grievance, and (3) decision by the
mayor's office. [Fn. 20]
          We have stated that the analysis of the doctrine of
exhaustion of administrative remedies involves three questions.  In
applying the doctrine of exhaustion of remedies, we must decide the
following: (a) is exhaustion of remedies required?; (b) did the
complainant exhaust those remedies?; and (c) is the failure to
exhaust remedies excused? [Fn. 21]  These three questions will be
discussed in turn.
     A.   Bruns and Saathoff Were Required to Exhaust Their
Administrative Remedies.

          Generally, employees must exhaust any administrative
remedies that they have before pursuing direct judicial actions
against their employers. [Fn. 22]  And, as the Municipality argues,
there were administrative remedies available to Bruns and Saathoff: 
AMC 3.30.100-.102 provides a three-step procedure for grievances --
such as those had by Bruns and Saathoff -- concerning alleged
violations of Title 3, Chapter 30 of the Anchorage Municipal Code.
[Fn. 23]  The superior court held that the plaintiffs were required
to exhaust the administrative remedies available under AMC
3.30.100-.102.  The issue of whether an employee is required to
exhaust administrative remedies is a question of law that we review
de novo. [Fn. 24]
          As we have held previously, employees who have a dispute
with the Municipality over some provision of the Municipality's
"Personnel Rules" [Fn. 25] are subject to the requirement that
employees must exhaust the administrative remedies available to
them before  seeking judicial relief.  In Municipality of Anchorage
v. Higgins, [Fn. 26] we considered a case where a plaintiff
employee of the Municipality filed suit because he was reclassified
from a "classified" to an "executive" employee of the Municipality.
[Fn. 27]  We held that the employee in Higgins failed to exhaust
the remedies available under AMC 3.30.101 before proceeding with
judicial action. [Fn. 28]  Like the employee in Higgins, Bruns and
Saathoff have asserted claims under the Municipality's Personnel
Rules.  Therefore, like the employee in Higgins, they must exhaust
the administrative remedies available under AMC 3.30.101.
          In two arguments, the plaintiffs claim that,
nevertheless, they were not required to exhaust the remedies
available under AMC 3.30.101.  The plaintiffs claim: (1) that their
claim is really a state claim under AS 23.05.140(b), and that there
is no exhaustion of remedies requirement for AS 23.05.140(b); and
(2) that the exhaustion of remedies requirement does not apply
because the plaintiffs are challenging the validity of a statute
and not any particular agency decision.  For the reasons stated
below, we reject both of these arguments. 
          1.   The requirements of AMC 3.30.129(B) must be
fulfilled before AS 23.05.140(b) is considered.

          The plaintiffs argue that they were not required to
exhaust their administrative remedies because the exhaustion
requirement does not apply to AS 23.05.140(b), and that their
claims under AMC 3.30.129(B) are better construed as claims under
AS 23.05.140(b).  Specifically, the plaintiffs claim that there is
no exhaustion requirement for AS 23.05.140, that AS 23.05.140
creates rights that are "non-waivable" and not subject to
administrative proceedings, that the Municipality is attempting to
enforce a fifteen-day "private" statute of limitations that does
not apply to AS 23.05.140, [Fn. 29] and that the grievance process
of AMC 3.30.101 is "preempted" by AS 23.05.140. [Fn. 30]  All of
these arguments amount to this: the plaintiffs argue that their
municipal law claim under AMC 3.30.129(B) is better construed as a
state law claim under AS 23.05.140(b), and for the four reasons
above, the exhaustion requirement does not apply to AS
23.05.140(b).
          The plaintiffs' arguments here fail for one central
reason: a violation of AMC 3.30.129(B) is really the predicate for
a violation of AS 23.05.140(b).  Alaska Statute 23.05.140(b) only
requires employers to pay all wages due to terminated employees
within three days of termination.  However, AS 23.05.140(b) does
not define what wages are due, or impose any requirements on
employers that any specific wages, including overtime wages, will
be due.  Anchorage Municipal Code 3.30.129(B), on the other hand,
defines what overtime wages are due, by defining and requiring
overtime, call-out, and standby pay.  As already established, the
plaintiffs had to exhaust administrative remedies before bringing
a claim for a violation of AMC 3.30.129(B).  The plaintiffs cannot
show a violation of AS 23.05.140(b) without first showing a
violation of AMC 3.30.129(B), so they cannot escape the exhaustion
of administrative remedies requirement.
          In reaching this conclusion we are guided by our previous
decisions concerning the application of AS 23.05.140(b).  In Reed
v. Municipality of Anchorage, [Fn. 31] we considered a suit brought
by an employee for unpaid wages under AS 23.05.140(b).  We held
that this claim should be construed as a claim under the underlying
collective bargaining agreement that defines what wages are due to
the employee:
          We do not believe that [the employee's] cause
of action is strictly or solely an action for liability upon a
statute [AS 23.05.140(b)].  Rather, we construe [the employee's]
cause of action in Count I to allege a breach of the collective
bargaining agreement. . . .  The agreement contains the specified
wage rates at which employees . . . are required to be paid.  Both
parties agree that they are bound by the collective bargaining
agreement.  The Municipality's failure to pay the specified wage
would be a violation of the collective bargaining agreement.  Thus,
[the employee's] complaint alleging that the Municipality failed to
pay these rates may be construed to state a cause of action for
breach of the collective bargaining agreement.[ [Fn. 32]]

In Reed, we also held that the six-year contract limitations period
for the underlying collective bargaining agreement would apply to
the employee's claim, rather than the two-year limitations period
for AS 23.05.140(b). [Fn. 33]
          In Quinn v. Alaska State Employees Ass'n, [Fn. 34] we
considered a suit brought by an employee for unpaid overtime under
AS 23.05.140(b).  Quinn also stands for the proposition that the
underlying authority that defines what wages are due -- in Quinn,
the Alaska Wage and Hour Act -- must be looked to first to
determine if wages are due.  In Quinn, we held that claims barred
under the Alaska Wage and Hour Act are not "revived" by AS
23.05.140(b). [Fn. 35]  Quinn and Reed together indicate that, for
a cause of action under AS 23.05.140(b), the court should look
first to the underlying statute or agreement that resolves the
question of what wages are due.
           As we held in Reed and Quinn, claims under AS 23.05.140
are to be construed as claims under the underlying authority that
defines what wages are due.  Alaska Statute 23.05.140 does not
create "non-waivable" rights because it grants no rights at all
unless the wages are owed under AMC 3.30.129(B) or some other
authority.  Reed establishes that the limitations period for AS
23.05.140 does not trump the limitations period for the underlying
authority that establishes what wages are due; [Fn. 36] this also
indicates that AMC 3.30.129(B) (as the underlying authority) and
AMC 3.30.101 are not preempted by AS 23.05.140.  Because the amount
of wages must be established by AMC 3.30.129(B) before applying AS
23.05.140(b), we reject each of the arguments made by the
plaintiffs concerning the independence of their AS 23.05.140(b)
claim. [Fn. 37]
          2.   Bruns and Saathoff sought an administrative remedy.
          The plaintiffs also claim that they were not required to
exhaust their administrative remedies because they were challenging
the validity of a statute, and not an administrative decision, and
under those circumstances, exhaustion is not required.  In State,
Department of Transportation & Public Facilities v. Fairbanks North
Star Borough, [Fn. 38] and Carter v. Alaska Public Employees Ass'n,
[Fn. 39] we held that exhaustion of administrative remedies is not
required when an administrative remedy is not appropriate.  An
administrative remedy is not appropriate when the claimant
challenges the validity of a statute authorizing or requiring
administrative action and does not seek a particular analysis or
application of a statute. [Fn. 40]  In other words, exhaustion is
required when the plaintiff seeks relief that the administrative
agency in question could have (but didn't) grant -- this relief is
"administrative."  On the other hand, if the plaintiff seeks relief
that the administrative agency could not have granted, such as
overturning or interpreting a statute, exhaustion is not required
because the relief sought is "judicial."
          Bruns and Saathoff claim that exhaustion was not required
in their case because they do not challenge any particular agency
decision.  However, Bruns and Saathoff seek a clearly
administrative remedy -- they seek payment of allegedly due
overtime wages.  Bruns and Saathoff do not ask us to interpret or
overturn provisions of state and federal law -- rather, they ask
this court to enforce these provisions.  Therefore, Bruns and
Saathoff seek an administrative remedy and were therefore required
to exhaust their administrative remedies.
     B.   Bruns and Saathoff Did Not Exhaust the Available
Administrative Remedies.

          The parties do not dispute that Bruns and Saathoff failed
to exhaust the available administrative remedies.  Both parties
agree that Saathoff only proceeded through the first step of the
three-step grievance process under AMC 3.30.101, [Fn. 41] by
discussing with his supervisors his dissatisfaction with the
overtime pay situation.  And, Bruns only proceeded through the
second step of the three-step grievance process.  Bruns discussed
the matter with his supervisors and then filed a written grievance
on November 3, 1995 with Tom Tierney, the Municipality's Director
of Employee Relations.  After Tierney denied Bruns's request for
retroactive overtime pay, however, Bruns did not proceed to the
third step of the procedure by appealing the matter to the mayor's
office.  Therefore, neither Bruns nor Saathoff proceeded through
all three steps of the administrative process required by AMC
3.30.101, and neither exhausted his administrative remedies.
     C.   The Failure to Exhaust Administrative Remedies May Be
Excused.

          We have previously held that even if a plaintiff failed
to exhaust her administrative remedies, the plaintiff may still
seek judicial relief if the failure is excused. [Fn. 42]  The
superior court held that the failure of Bruns and Saathoff to
exhaust the available administrative remedies is not excused.  We
will review this decision, which is a conclusion of law, using our
independent judgment. [Fn. 43]
          Bruns and Saathoff argue that their failure to exhaust
the available administrative remedies is excused because threats of
retaliatory discharge [Fn. 44] dissuaded them from going ahead with
the grievance process.
          We have stated that the failure to exhaust administrative
remedies is excused "where the administrative remedy is inadequate
or where the pursuit of the administrative remedy would be futile
due to the certainty of an adverse decision." [Fn. 45]  We have
never considered the issue of whether fear of retaliatory discharge
excuses failure to exhaust administrative remedies.  However, fear
of retaliatory discharge, like futility, bias, or other defects in
the administrative process, can make pursuit of administrative
remedies difficult or ineffective, and in some circumstances can
excuse the employee's failure to exhaust available administrative
remedies. [Fn. 46]
          Bruns and Saathoff have both stated under oath that they
were threatened with retaliatory discharge when they brought up the
subject of overtime pay with their immediate supervisors.  This
presents a factual question of whether threats were actually made
that might excuse the plaintiffs' failure to exhaust their
administrative remedies.  The superior court failed to address this
factual issue explicitly and even if it did so implicitly, a
material factual issue remains that prevents summary judgment. [Fn.
47]
V.   CONCLUSION
          Bruns and Saathoff were required to exhaust the available
administrative remedies provided by AMC 3.30.101 before bringing
this judicial action against the Municipality, and they failed to
do so.  However, because the plaintiffs alleged under oath that
they were threatened with retaliatory discharge if they pursued
their administrative remedies, there is a factual issue as to
whether the failure is excused.  Therefore, we REVERSE the superior
court's grant of summary judgment and award of attorney's fees, and
REMAND for further proceedings. [Fn. 48]


                            FOOTNOTES


Footnote 1:

     Overtime work must be approved by the agency head and includes
hours actually worked in excess of 40 hours in a week.  AMC
3.30.129(B)(1).


Footnote 2:

     Anchorage Ordinance 96-55 (April 2, 1996) (amendment AMC
3.30.129).


Footnote 3:

     In a "call-out," an employee is "called out" to perform
overtime work after completing a scheduled shift.  See AMC
3.30.129(B)(2).


Footnote 4:

     An employee is on "standby" status when the employee must
remain available for work outside of regularly scheduled  working
hours.  See AMC 3.30.129(B)(3).


Footnote 5:

     In this opinion, Bruns and Saathoff will sometimes be referred
to collectively as "the plaintiffs."


Footnote 6:

     29 U.S.C. sec.sec. 201-219.


Footnote 7:

     Bruns v. Municipality of Anchorage, No. 97-36060, 1999 WL
288910 (9th Cir. May 10, 1999) (unpublished opinion).


Footnote 8:

     See Moore v. Allstate Ins. Co., 995 P.2d 231, 233 (Alaska
2000).


Footnote 9:

     See id.; Alaska R. Civ. P. 56(c).


Footnote 10:

     See State, Dep't of Transp. & Pub. Facilities v. Fairbanks
North Star Borough, 936 P.2d 1259, 1260 n.3 (Alaska 1997).


Footnote 11:

     See State v. Beard, 960 P.2d 1, 5 (Alaska 1998). 


Footnote 12:

     See id.


Footnote 13:

     The Alaska Wage and Hour Act claims made by Bruns and Saathoff
were claims under AS 23.10.060(b) and AS 23.10.110.


Footnote 14:

     AS 23.10.055 states in part, "The provisions of AS
23.10.050-23.10.150 do not apply to . . .         (5) an individual
employed by the United States or by the state or political
subdivision of the state."


Footnote 15:

     Former AS 23.05.140(b) (1983).


Footnote 16:

     This is because AS 23.05.140(b) by itself does not define what
wages are due -- it simply requires that wages that are due be
paid.


Footnote 17:

     AMC 3.30.129(B)(1).


Footnote 18:

     Former AMC 3.30.129(B) provides:

          Pay rates for overtime premium pay.

               1.   Time and one-half pay.  Employees
shall be paid at one and one-half times their regular rate of pay
for all hours actually worked in excess of 40 hours in one
week. . . . 

               2.   Call-out pay.  When an employee has
completed his scheduled shift and is "called out" to perform
additional work, he shall receive overtime pay for actual hours
worked with a minimum guarantee of four hours' pay at the
employee's straight time hourly rate.  Overtime pay shall be paid
in accordance with subsection B.1 of this section.

               3.   Standby pay.        In cases where it is
                                        found necessary to have employees remain
                                        available for work in a standby status after
regularly scheduled hours, on scheduled days off, or holidays, they
shall receive two hours' pay at the straight time rate for each day
of such duty.  When such an employee is called out for work, the
standby pay shall be credited toward the minimum call-out payment.


Footnote 19:

     AMC 3.30.100 defines a "grievance" (subject to the procedure
in AMC 3.30.101) as a "dispute involving the interpretation,
application or alleged violation of any section of this chapter
[including AMC 3.30.129]." 


Footnote 20:

     AMC 3.30.101 provides:

          A grievance shall be processed in accordance
with the procedures and within the time limits stated in this
section and section 3.30.102.

               A.   Step 1 -- Informal Discussion
          The aggrieved employee shall discuss the
grievance with the agency head.  If the grievance cannot be
resolved informally through discussion, it shall then be reduced to
writing as a formal grievance, and the written grievance shall be
submitted to the agency head.  The written grievance must be
submitted within 15 days of the date that the employee knows or has
reason to know of the conduct or actions upon which the grievance
is based.  Failure to notify the municipality within the specified
time limits identified in the procedure shall constitute a bar to
further action on the alleged grievance. . . .

               B.   Step 2 -- Decision by Agency Head
          Upon receipt of [the written grievance
submitted in Step 1], an agency head shall, within five working
days, respond in writing.  Upon receipt of the agency head's
response, the employee shall have five working days to appeal the
decision in writing to the mayor.  If the employee fails to appeal
the agency head's decision within five days, such failure to
respond will serve to declare the grievance as settled based upon
the agency head's decision.

               C.   Step 3 -- Decision by Mayor
          Within five working days of receipt of a
written appeal from the decision of the agency head, the mayor or
his designee shall review the matter and respond in writing to the
employee's grievance.  Upon receipt of the mayor's decision, the
employee shall have five working days in which to submit a written
request for arbitration to the director.  If the employee fails to
file a written request for arbitration within the five days, such
failure will serve to declare the grievance as settled based upon
the mayor's decision.

If, after proceeding through all three steps, the employee is not
satisfied with the outcome, the employee may seek arbitration under
AMC 3.30.102.  The results of this arbitration may be appealed to
the superior court under AS 09.43.120-.150.


Footnote 21:

     See State, Dep't of Transp. & Pub. Facilities v. Fairbanks
North Star Borough, 936 P.2d 1259, 1260-61 (Alaska 1997).


Footnote 22:

     See Wilson v. Municipality of Anchorage, 977 P.2d 713, 724
(Alaska 1999).


Footnote 23:

     AMC 3.30.100-.102.


Footnote 24:

     See Fairbanks North Star Borough, 936 P.2d at 1260 n.3.


Footnote 25:

     Title 3, Chapter 30 of the AMC.


Footnote 26:

     754 P.2d 745 (Alaska 1988).


Footnote 27:

     Under the Municipality's Personnel Rules, "classified"
employees can only be fired for cause, while "executive" employees
serve at will without right of grievance or appeal.  See Higgins,
754 P.2d at 746.


Footnote 28:

     Id. at 746-48.


Footnote 29:

     The administrative remedies procedure required by AMC
3.30.129(B) and AMC 3.30.101 has a built-in 15-day "statute of
limitations," since, in the first step of the three-step
administrative grievance procedure required by AMC 3.30.101, the
claimant is required to submit a written grievance within 15 days
after the employee knows of the conduct in question.


Footnote 30:

     The plaintiffs argue that AS 23.05.140 preempts AMC 3.30.101
because the municipal ordinance "substantially interferes with the
effective functioning of the statute or its underlying purpose." 
Foreman v. Anchorage Equal Rights Comm'n, 779 P.2d 1199, 1203 n.8
(Alaska 1989).  The plaintiffs argue that there is substantial
interference because the municipal ordinance's 15-day limitations
period interferes with the much longer two-year limitations period
under state law to enforce AS 23.05.140.  See AS 23.10.130.  The
plaintiffs claim that there is interference because the state
limitations period may lapse in the time that it takes to pursue
administrative remedies under AMC 3.30.101.  The plaintiffs also
argue that AMC 3.30.129(B) and AMC 3.30.101 are "in violation of
the public policy" embodied in AS 23.05.140 because of the conflict
between the two limitations periods.


Footnote 31:

     741 P.2d 1181, 1186 (Alaska 1987).


Footnote 32:

     Reed, 741 P.2d at 1185 (emphasis added).


Footnote 33:

     Id.


Footnote 34:

     944 P.2d 468, 472-73 (Alaska 1997).


Footnote 35:

     Id. at 472.


Footnote 36:

     741 P.2d at 1185.


Footnote 37:

     The plaintiffs' arguments were: AS 23.05.140 has no exhaustion
requirement, AS 23.05.140 creates "non-waivable" rights, the
Municipality is attempting to enforce a "private" statute of
limitations (AMC 3.30.101), and AMC 3.30.101 is "preempted" by AS
23.05.140.


Footnote 38:

     936 P.2d 1259, 1261-62 (Alaska 1997).


Footnote 39:

     663 P.2d 916, 922 n.19 (Alaska 1983).


Footnote 40:

     See Fairbanks North Star Borough, 936 P.2d at 1261-62 (holding
that exhaustion is not required where the state challenged the
validity of an ordinance that would have been applied by the
administrative entity -- a planning commission -- in question);
Carter, 663 P.2d at 922 n.19 (holding that, where the issue was the
interpretation of a public records statute, exhaustion is not
required because "the remedy sought is judicial rather than
administrative").


Footnote 41:

     As discussed earlier, AMC 3.30.101 establishes a three-step
grievance process: (1) informal discussion; (2) decision by the
agency head; and (3) appeal to the mayor's office.  After the
three-step process, under AMC 3.30.102 the matter may be appealed
to arbitration and then to the superior court under AS 09.43.120-
.150.


Footnote 42:

     See State v. Beard, 960 P.2d 1, 5 (Alaska 1998).


Footnote 43:

     See id. at 5-6.


Footnote 44:

     "Retaliatory discharge" is the discharge of the employee by
the employer in retaliation for some activity protected by public
policy, such as the employee's exercise of some political or legal
right, or the employee's investigation of possible violations of
law by the employer.  See Palmatier v. International Harvester Co.,
421 N.E.2d 876, 878-79 (Ill. 1981).


Footnote 45:

     Eidelson v. Archer, 645 P.2d 171, 181 (Alaska 1982).


Footnote 46:

     Courts have held that failure to exhaust administrative
remedies may be excused where the administrative procedures are
ineffective because of lack of meaningful access, bias, futility,
or the possibility that the claimant could face irreparable harm if
the administrative process is followed.  See Kevin W. Reese,
Administrative Remedies Must Be Exhausted Absent Circumstances
Supporting an Exception to Exhaustion Doctrine, 47 S.C. L. Rev. 17,
22 (1995); see also McCarthy v. Madigan, 503 U.S. 140, 148 (1992)
(explaining principle that a failure to exhaust administrative
remedies may be excused when the administrative process is biased);
Bowen v. City of New York, 476 U.S. 467, 483-84 (1986) (holding
that a failure to exhaust administrative remedies may be excused
when the claimant faces a danger of irreparable harm from the
administrative process); Robyns v. Reliance Standard Life Ins. Co.,
130 F.3d 1231, 1236 (7th Cir. 1997) (applying standard that a
failure to exhaust administrative remedies may be excused where
"there has been a lack of meaningful access to the review
procedures"); Eidelson, 645 P.2d at 181 (establishing that failure
to exhaust administrative remedies may be excused where the pursuit
of the administrative remedy would be futile due to the certainty
of an adverse decision).  The plaintiffs' fear of retaliatory
discharge is a type of harm that could render the administrative
remedies here ineffective.

          It is well established that retaliatory discharge, if
carried out, gives rise to a private right of action against the
employer.  We have recognized retaliatory discharge claims in our
prior decisions.  See Norcon, Inc. v. Kotowski, 971 P.2d 158, 167
(Alaska 1999) (recognizing that "retaliatory discharge [for whistle
blowing activities] gives rise to a cause of action for breach of
the duty of good faith and fair dealing"); Bishop v. Municipality
of Anchorage, 899 P.2d 149, 154 (Alaska 1995) (assessing claim for
alleged retaliatory discharge for protected First Amendment
activity).


Footnote 47:

     Because we find that there is a factual issue as to whether
the alleged threats excused the plaintiffs' failure to exhaust
administrative remedies, we will not address the plaintiffs' other
argument that their failure is excused because the administrative
remedies available under AMC 3.30.101 (specifically, the 15-day
limitations period) were inadequate.


Footnote 48:

     The superior court awarded attorney's fees to the Municipality
after granting summary judgment in favor of the Municipality. 
Because we reverse this grant of summary judgment, the award of
attorney's fees must necessarily be reversed as well.