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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Air Logistics of Alaska, Inc. v. Throop (04/11/2008) sp-6248

Air Logistics of Alaska, Inc. v. Throop (04/11/2008) sp-6248, 181 P3d 1084

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

AIR LOGISTICS OF ALASKA, INC., )
) Supreme Court Nos. S- 12169/12189
Appellant/Cross-Appellee, )
) Superior Court No. 4FA-03- 835 CI
v. )
) OPINION ON REHEARING
DAVID THROOP, individually and on )
behalf of all similarly situated persons, ) No. 6248 April 11, 2008
)
Appellee/Cross-Appellant. )
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks,  Richard D. Savell  and  Randy  M.
          Olsen, Judges.

          Appearances:    Gregory  A.  Miller,   Birch,
          Horton,  Bittner  &  Cherot,  Anchorage,  for
          Appellant/Cross-Appellee.      William     B.
          Schendel,  Schendel  Law  Office,  Daniel  E.
          Winfree,  Winfree Law Office, Fairbanks,  for
          Appellee/Cross-Appellant.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, and Carpeneti, Justices.   [Bryner,
          Justice, not participating.]

          MATTHEWS, Justice.


I.   SUMMARY
          Air Logistics of Alaska, Inc., violated the Alaska Wage
and  Hour  Act (AWHA) by failing to include several pay items  in
the regular rate of pay when calculating the overtime rate of one-
and-a-half  times  the regular rate.  Air Logistics  claims  that
even  though  it  paid  overtime for  hours  during  which  field
mechanics were on-call, it should only be liable for damages  for
overtime hours the mechanics recorded as actually working.  Since
we find that the on-call time was compensable for the purposes of
the  AWHA,  we hold that Air Logistics is liable for damages  for
all  of  the  overtime hours paid and affirm the superior  courts
grant  of summary judgment on the question of compensable  hours.
The  superior  court  erred, however, by  granting  David  Throop
summary  judgment for the contract claim.  While it is true  that
the  overtime  provisions of the AWHA are expressly  incorporated
into all employment contracts, the limitations in the statute are
incorporated  as  well.  Since Throop has  no  viable  breach  of
contract overtime claim, his recovery is governed by the two-year
statute of limitations for AWHA violations rather than the three-
year statute of limitations for contract claims.  We reverse  the
superior  courts  grant  of summary judgment  to  Throop  on  the
contract claim.
          We  affirm  the superior courts holding that liquidated
damages  under  the  AWHA were inappropriate  and  remand  for  a
recalculation of attorneys fees in accordance with this opinion.
II.  FACTS AND PROCEEDINGS
          Air  Logistics  of  Alaska, Inc., is a  Fairbanks-based
helicopter  company.   Prior  to  1990  Air  Logistics  paid  its
mechanics on a salary basis.  It revamped its pay policy in  1990
in response to a Department of Labor ruling issued concerning one
of  its  competitors.  This ruling held that helicopter mechanics
were  no  longer  considered exempt from overtime  provisions  as
professionals  and therefore should be paid on  an  hourly  basis
rather than a salaried one.  Under Air Logisticss new hourly  pay
plan,  mechanics working in the field at remote locations  worked
on a rotating schedule with two weeks on and two weeks off.1  Air
Logistics paid the field mechanics for ten hours of work per day.
Of  these  hours, two per day and any hours over forty  per  week
were  paid  at  an  overtime rate of one and one-half  times  the
mechanics  regular  rate of pay.  The mechanics  were  paid  this
amount  regardless of the hours they actually  worked,  but  they
recorded  the hours they actually worked in a separate column  on
their  time  sheets.  They usually worked fewer  than  ten  hours
often working only a few hours per day.
          In  addition to the hourly rate, Air Logistics paid its
mechanics  several add-ons, such as extra pay when they  were  in
the  field, pay for travel, various safety bonuses, and Christmas
bonuses.2   Some of these were calculated on a daily  or  monthly
basis  (for  example, travel pay was $30 per day of travel),  and
some  were  calculated on an annual basis (for example  Christmas
pay  was  $500 per year).  Air Logistics calculated the  overtime
hourly  wage by multiplying the regular hourly wage by  1.5.   It
did  not  include any of the add-ons in the regular rate  of  pay
when calculating the overtime wage.
          David  Throop worked for Air Logistics from 1979  until
2003.   He worked as a mechanic from 1999 on.  He initiated  this
case  approximately one month after Air Logistics terminated  his
employment  in  March 2003.  At that time, Throop filed  a  class
action  complaint claiming that Air Logistics violated  the  AWHA
          and breached its employment contract by failing to include the
add-ons  as part of the regular rate of pay when calculating  the
overtime rate.3
          After  Throop  submitted his complaint,  Air  Logistics
asked  the  Alaska Department of Labor and Workforce  Development
(DOL)  to issue a written opinion regarding which of the  add-ons
should  be  used when calculating overtime.  In July  2003  Randy
Carr,  who  was  then chief of DOLs Wage and Hour  Administration
Labor Standards and Safety Division, opined that five of the add-
ons   remote  operations pay (ROP), travel  allowance  pay,  tool
allowance pay, Christmas bonus pay, and impact awards for  safety
pay   were properly excluded from each employees regular rate  of
pay  when  calculating  overtime but that  the  advisory  station
operator  pay,  inspector authorization  pay,  major  awards  for
safety,  and  seasonal safety awards should be  included  in  the
regular  rate  of  pay.  Carr also stated that  when  calculating
overtime  Air Logistics should use only actual hours of  work  as
opposed to compensated hours . . . where a reliable record of the
actual  hours  exists.  Air Logistics then paid damages  equaling
the  difference between the overtime rate that its employees  had
been paid and the overtime rate the employees would have received
if  the regular rate had been calculated to include the four add-
ons  that  Carr  suggested.  These amounts were calculated  using
overtime  hours  from the actual work columns of the  timesheets,
rather  than  using all of the overtime hours  paid.   The  total
amount, after an adjustment for a miscalculation, was $6,527.55.
          Throop  dropped his claim as to four of  the  remaining
add-ons,  leaving ROP as the only contested add-on.  The superior
court granted summary judgment in favor of Throop on the question
of whether the ROP should be included in the regular rate of pay.
After  this ruling and after consulting with the director of  the
DOL  on the issue, Air Logistics paid damages for the ROP add-on.
This  amount,  $20,842.83,  was  also  based  on  overtime  hours
recorded as actually worked rather than all overtime hours paid.
          Air  Logistics moved for summary judgment on the  issue
of  how to calculate overtime pay.  Air Logistics noted that  its
mechanics  were often paid for more hours than they  recorded  as
actually  working  and  argued  that  it  should  only  pay   any
additional  overtime  amounts for overtime  hours  the  mechanics
actually worked, rather than the hours for which they were  paid.
Throop  filed  a cross-motion for summary judgment  on  the  same
issue, arguing that class members should receive back pay for any
differential in overtime rates for all of the overtime hours they
were  paid  for,  not  just the hours they recorded  as  actually
working.  The superior court granted summary judgment in favor of
Throop.
          Air  Logistics  also  moved  for  summary  judgment  on
Throops  contract  claim.   Air  Logistics  argued  that  it  had
fulfilled all of its contractual obligations and that Throop  was
impermissibly trying to bring a contract claim to extend the two-
year  statute  of limitations for AWHA claims to  the  three-year
statute of limitations for contract claims.  Throop filed a cross-
motion  for  summary judgment, arguing that since  the  AWHA  was
incorporated  into employment contracts, Air Logistics  violation
          of the AWHA also constituted a breach of contract.  Throop also
argued that his actual employment contact  consisting of a letter
of   hire   and  Air  Logisticss  policy  manual   supported   an
independent  contract claim.  The superior court granted  Throops
motion  for summary judgment on the contract claim, finding  that
since  the  AWHA was implicitly and explicitly incorporated  into
employment  contracts,  Air Logistics breached  its  contract  by
violating  the AWHA.  The superior court concluded that therefore
the contract statute of limitations was appropriate.
          Prior to trial the parties stipulated to the amount  of
damages  owed  by Air Logistics for unpaid overtime  compensation
and  interest.  The only issues remaining for trial were  whether
the  court would impose liquidated damages and injunctive  relief
upon  Air  Logistics.  After a bench trial,  the  superior  court
found  that  AirLog  established  by  the  clear  and  convincing
standard that it subjectively believed it complied with the  law,
and  that  its  subjective  belief  was  objectively  reasonable.
Therefore, it held liquidated damages and injunctive relief  were
inappropriate.  The final judgment imposed $22,420.70 in  damages
against  Air Logistics for the contract claim and $65,608.93  for
the  AWHA  claim  but subtracted three catch-up payments  already
made  by  Air Logistics totaling $27,370.38.  The superior  court
also  awarded  the  class  prejudgment  interest  of  $16,442.37,
attorneys fees of $16,320.42, and costs of $10,118.41.  The total
final  judgment  after  subtracting  the  catch-up  payments  was
$103,540.45.
          Air  Logistics  appeals the superior  courts  grant  of
partial  summary judgment with respect to hours  worked  and  the
contract claim.  Throop cross-appeals the superior courts failure
to  impose  liquidated damages on Air Logistics and the  superior
courts award of attorneys fees.
III. DISCUSSION
     
     A.   Summary  Judgment  Was  Appropriate  on  the  Issue  of
          Compensable Hours.
          
          The superior court granted partial summary judgment  to
Throop on the question of compensable hours, holding that all  of
the  hours paid counted as hours worked under the AWHA.  A  grant
of summary judgment is reviewed de novo.4  We will affirm
          if  the  record contains no genuine issue  of
          material   fact  and  the  moving  party   is
          entitled  to  judgment as a  matter  of  law.
          When   considering  a  motion   for   summary
          judgment, all reasonable inferences  of  fact
          from  the  proffered evidence must  be  drawn
          against the moving party and in favor of  the
          non-moving party.[5]
          
          Air  Logistics  argues  that the  hours  paid  did  not
accurately  reflect  the  hours  the  mechanics  actually  worked
because  the mechanics at remote sites were free to  do  as  they
pleased  for  many hours every day.  Air Logistics cites  several
federal  cases finding that employees were not paid  overtime  in
similar  situations  and  notes that  the  DOL  has  consistently
          maintained that only hours worked should be used for overtime
calculations.  Air  Logistics also argues  that  even  if  Throop
disputes the issue of whether the mechanics were actually working
during the entire pay period, this raises questions of fact, such
as  how  the  mechanics spent their time, sufficient to  preclude
summary judgment.
          Throop argues that work hours under AWHA can be defined
by  agreement between the employee and the employer and that  the
agreement  between  Air  Logistics and its employees  established
that  all  of the paid hours should be used to calculate overtime
for  AWHA  purposes.  Throop also notes that Air  Logisticss  pay
stubs  only report the scheduled hours paid, not the actual hours
worked.  Throop argues that since the DOL regulations require  an
employer  to  disclose  the weekly hours actually  worked  to  an
employee,6  Air  Logistics  repeatedly violated  this  regulation
unless all hours paid are counted as hours worked.
          At  oral argument the superior court seemed to base its
holding  on the fact that the pay stubs only reflected  the  ten-
hour  day  that  the employees were paid and did not  contain  an
entry for the number of hours actually worked.  It emphasized the
DOL  requirement that the employer provide the employee  with  an
earning  statement  that shows the hours  actually  worked.   The
superior  court indicated that Air Logistics would have prevailed
if it had recorded the number of hours actually worked on the pay
stubs.
          We  have  doubts about this approach.  It is true  that
DOL  regulations require the employer to communicate  the  actual
hours  worked for each pay period to its employee.7  It  is  also
true that Air Logistics failed to do this.  However, there is  no
indication  in  the  regulations that  failure  to  provide  this
information  to  employees will result in all  hours  paid  being
considered hours worked for the purposes of the AWHA.   While  an
employee  could certainly bring a complaint against Air Logistics
for  such  an omission, and the DOL could choose to penalize  Air
Logistics,  the  regulations do not mandate the  superior  courts
outcome.
          Instead  it  is  necessary to look to  the  statute  to
determine whether all of the pay hours were compensable under the
AWHA.   The  AWHA  requires an employer to pay employees  at  the
overtime  rate  of  one and one-half times the regular  rate  for
hours  worked  in excess of eight hours a day or  forty  hours  a
week.8   Thus  in  order to determine whether  Air  Logistics  is
liable  for the correct overtime rate for all of the hours  paid,
it  is necessary to determine whether the employees were actually
working  for the purposes of the AWHA.  The key question in  this
analysis is to what extent employees can use their time for their
own purposes.9
          There  is very little Alaska case law dealing with  the
question  of  whether an employees use of time is  restricted  to
such  an extent that it should be classified as compensable under
AWHA.   There  is,  however,  substantial  federal  jurisprudence
dealing  with  the similar question of whether an employees  time
should  be  counted as compensable for the purposes of  the  Fair
Labor  Standards Act (FLSA).10  In Armour & Co. v.  Wantock,  the
          United States Supreme Court noted the following:
               Of  course  an employer, if he  chooses,
          may  hire  a  man  to do nothing,  or  to  do
          nothing  but  wait for something  to  happen.
          Refraining  from other activity  often  is  a
          factor  of  instant readiness to  serve,  and
          idleness plays a part in all employments in a
          stand-by capacity.  Readiness to serve may be
          hired,  quite as much as service itself,  and
          time  spent lying in wait for threats to  the
          safety  of  the  employers  property  may  be
          treated  by the parties as a benefit  to  the
          employer.[11]
          
In other words, to quote Armours companion case Skidmore v. Swift
& Co., [f]acts may show that the employee was engaged to wait, or
they may show that he waited to be engaged.12
          The  jurisprudence  dealing with this  question  covers
widely  varying  situations.   In  Skidmore,  the  United  States
Supreme  Court  noted that it would be imprudent to  lay  down  a
legal  formula  to  resolve  cases so varied  in  their  facts.13
Federal  courts have, however, looked to two predominant  factors
when  dealing  with this question: (1) the degree  to  which  the
employee  is free to engage in personal activities; and  (2)  the
agreements  between  the  parties.14   This  court  adopted  this
analysis in Hutka v. Sisters of Providence in Washington.15   The
following subsections will address both factors in turn.
          1.   The   employees  freedom  to  engage  in  personal
               activities
          In  Owens  v.  Local No. 169, Assn  of Western  Pulp  &
Paper  Workers,  the Ninth Circuit set out many  of  the  factors
courts  have considered when determining the degree to which  the
employee is free to engage in personal activities:
          (1)  whether there was an on-premises  living
          requirement; (2) whether there were excessive
          geographical   restrictions   on    employees
          movements; (3) whether the frequency of calls
          was  unduly restrictive; (4) whether a  fixed
          time    limit   for   response   was   unduly
          restrictive; (5) whether the on-call employee
          could  easily trade on-call responsibilities;
          (6)   whether  use  of  a  pager  could  ease
          restrictions;  and (7) whether  the  employee
          had  actually engaged in personal  activities
          during   call-in  time.   Such  a   list   is
          illustrative, not exhaustive.  No one  factor
          is dispositive.[16]
          
Since the court granted Throop summary judgment on this issue, we
resolve  any  factual  disputes in favor of  Air  Logistics.   We
assume for the purposes of this appeal that the mechanics in  the
field  were  not required to stay on the work site  itself,  that
they  had no set response time requirement, that they could carry
radios that served as pagers, that calls to work were infrequent,
and  that  they  actually engaged in personal  activities  during
hours while they were on-call.
          The  on-premises living requirement (factor  1)  favors
Throop,17  as does the fact that the employees could  not  easily
trade  shifts  (factor  5), since there was  generally  only  one
mechanic in a remote area.  But the infrequency of calls  (factor
3),   the  lack  of  a  fixed  response  time  (factor  4),   the
availability of radios that worked as pagers (factor 6), and  the
fact  that many employees actually engaged in personal activities
(factor 7) favor Air Logistics.  The  remoteness of the locations
inaccessible  by  car  means that the mechanics were  constrained
geographically  in  a  general sense  (factor  2),  which  favors
Throop.  But the employees were not geographically constrained in
the  sense that they had to remain at the work site, which favors
Air Logistics.  Thus a cursory look at the factors suggests that,
taken together, they could favor Air Logistics.
          However,  the  fact that the mechanics were  in  remote
areas  weighs heavily in favor of Throop.  Several of the factors
that  favor  Air Logistics are less important when one  considers
that  the  employees  were  in isolated  locations  for  extended
periods of  time.  Their ability to leave the work site, the lack
of  any  fixed  response time, the availability of a  radio  that
worked  as  a pager, and the fact that they actually  engaged  in
personal activities must be viewed in this context.  It  is  true
that  the mechanics could hike, fish, read, watch movies, or work
out.   But they could not shop, go out to eat, run errands,  work
on  their houses or cars, spend time with friends, or do anything
else  one  would normally do in the community where one  resides.
They  were  not  allowed to bring their families to  two  of  the
remote  stations,  and  even  at the other  stations  they  could
presumably  only do so if their family members  had  no  work  or
school commitments for the two weeks in question.  Because of the
way  the  schedule was set up, the employee had to  suffer  these
restrictions for two full weeks, rather than just for  one  shift
lasting for a day or less.
          A Ninth Circuit case, Brigham ex rel. Estate of Brigham
v.  Eugene  Water  & Electric Board, involved  a  situation  with
similar facts.18  As with the present case, the employees were in
a  remote location and on-call for a certain number of hours each
week.19  They also had an on-premises living requirement, received
infrequent  calls,  and routinely engaged in personal  activities
while they were on-call.20  The facts were more favorable to  the
employees case because the employees were required to stay within
earshot during their on-call shift,21 but less favorable  to  the
employees  because they had the ability to trade shifts.22   Thus
the Brigham facts are comparable to the present case.  In Brigham
the Ninth Circuit found the facts to favor the employees.23
          If  the Owens factors favored the employees in Brigham,
then  the  Air  Logistics employees should  prevail.   While  the
Brigham employees were in a remote area, it was accessible by car
and  only  seventy miles away from Eugene, Oregon.24   Thus  when
they  were not on-call or working they could actually go  into  a
town  or  have  friends visit them.  The Brigham employees  lived
with  their families,25 so they could spend time with  them  even
          when they were on-call and required to stay on premises.26
Finally, the on-call shifts for the Brigham employees only lasted
twenty-four  hours, and there was generally only  one  shift  per
week.27  By comparison, the Air Logistics employees were required
to  stay in the remote location with no access to any town,  even
when  they were not on-call, for fifteen full days, during  which
they  were unable to spend any time with their friends or in many
cases their families.
          We find that the isolated and inaccessible location and
the extended period of time spent there by employees outweigh the
other  factors that favor Air Logistics.  Thus, the Owens factors
favor Throop.
          2.   The employment agreement
          The  second  factor to consider is the  agreement.   An
agreement to pay overtime while an employee is on-call  does  not
necessarily  mean  that  the  time  spent  by  the  employee   is
compensable  under wage and hour law.28  That said,  however,  an
agreement  between  parties is one factor that  the  fact  finder
properly  should consider.29  In Berry v. County of  Sonoma,  the
Ninth Circuit discussed the significance of employment agreements
in resolving whether time is compensable under the FLSA:
          The significance and importance of evaluating
          the  agreements between the parties  is  that
          the  existence of such agreements assists the
          trier  of  fact  in determining  whether  the
          parties  characterized the time spent waiting
          on-call as actual work.  An agreement between
          the parties which provides at least some type
          of  compensation for on-call waiting time may
          suggest the parties characterize waiting time
          as  work.   Conversely, an agreement pursuant
          to  which  the employees are to be paid  only
          for  time  spent  actually working,  and  not
          merely  waiting  to  work,  may  suggest  the
          parties  do not characterize waiting time  as
          work.[30]
          
Under  this  analysis,  the fact that  Air  Logistics  agreed  to
compensate  its  employees at their regular  rate  and  pay  them
overtime  for  any hours scheduled over eight per  day/forty  per
week weighs in favor of the employees.31
          It is also relevant that the employees were effectively
required  to  reside  on  the  premises.   There  is  a   Federal
Department   of   Labor  Wage  and  Hour  Division   interpretive
regulation that deals with situations, such as this one, in which
employees are residing on employers premises or working at home:
               An employee who resides on his employers
          premises on a permanent basis or for extended
          periods  of time is not considered as working
          all   the   time  he  is  on  the   premises.
          Ordinarily,  he may engage in normal  private
          pursuits  and  thus  have  enough  time   for
          eating,  sleeping,  entertaining,  and  other
          periods  of complete freedom from all  duties
               when he may leave the premises for purposes
          of  his own.  It is, of course, difficult  to
          determine the exact hours worked under  these
          circumstances and any reasonable agreement of
          the  parties  which takes into  consideration
          all of the pertinent facts will be accepted.[32
          ]
          
This  interpretive regulation, while not binding,  is  persuasive
authority.33   In Brigham, the court found that even  though  the
Owens   factors  discussed  above  favored  the  employees,   the
agreement  was  reasonable and thus controlling under  29  C.F.R.
785.23.34
          In Brigham the employees were on-call for a twenty-four-
hour period, of which they actually worked for approximately  six
hours.35   Under  their agreement they were compensated  for  ten
hours  of  work.36   In  looking at  whether  the  agreement  was
reasonable,  the  Brigham  court noted the  pressures  and  other
constraints  imposed  on  employees by virtue  of  their  on-call
duties,  and  concluded  there was no reason  why  these  factors
cannot  be accounted for as work time equivalents given the  ways
in  which  they diminished the otherwise unfettered enjoyment  of
the  employees time while on-call.37  Thus, the court found  that
the   parties   agreement   treating   the   otherwise   formally
uncompensated  duty shift call time as equivalent to  four  hours
actual work is eminently reasonable.38
          This analysis can be applied to the case at hand. Here,
the employees performed a few hours of actual work each day, were
on-call  for ten hours, and were required to remain in  a  remote
location  twenty-four hours per day.  Under their agreement  they
were  paid for ten hours a day.  This agreement  that a few hours
of  work, ten hours of on-call time, and twenty-four hours  in  a
remote  location  is  equivalent to  ten  hours  of  actual  work
appears  reasonable.  Thus we find that the agreement to pay  the
employees  ten  hours  per  day favors the  employees  under  the
Federal DOL interpretive regulation.
          Since  the  facts  viewed in favor  of  non-movant  Air
Logistics  favor the employees with respect to both of the  Hutka
factors   the employees freedom to engage in personal  activities
and  the employment agreement  summary judgment on this issue was
appropriate.
     B.   Throops  Contract  Claim  Is Covered  by  the  Two-Year
          Statute of Limitations in the AWHA.
          
          The   standard  of  review  for  summary  judgment   is
discussed above in Part III.A.
          In  addition to alleging direct violations of the AWHA,
Throop  also  claimed that Air Logistics breached his  employment
contract by violating the AWHA.  Air Logistics moved for  summary
judgment on this claim, arguing that there was no factual dispute
regarding  whether Air Logistics paid the members  of  the  class
everything that was required by the terms of their contract.  Air
Logistics argued that Throop was trying to use the contract claim
solely  to extend the statute of limitations from two years,  for
          AWHA claims, to three years, for contracts.  Throop filed a cross-
motion  for  summary  judgment on the same  issue,  arguing  that
contracts  incorporate applicable law.  Throop  argued  that  Air
Logistics breached its contractual obligation to pay overtime  by
violating AWHAs overtime provisions.  Throop also argued that his
employment  contract  (a letter of hire and  the  company  policy
manual)  required  the payment of overtime  in  terms  that  were
either ambiguous or illegal.  He contended that if the terms were
ambiguous they should be construed in a manner that is consistent
with AWHA.  If illegal, Throop argued that AWHA should simply  be
substituted for the illegal terms.
          The  superior court granted Throops motion for  summary
judgment  on the contract claim.  The superior court  noted  that
the  AWHA  expressly incorporates its overtime requirements  into
all  employment  contracts.  It also noted  that,  under  general
rules    of   contract   interpretation,   employment   contracts
incorporate all applicable laws. According to the superior court,
allowing a contract claim to proceed alongside an AWHA claim does
[not  do] violence to the legislatures intent in setting  a  two-
year  statute  of  limitation for AWHA claims  because  AWHA  and
contract  law  offer different remedies:  AWHA offers  liquidated
damages  whereas  contract law offers only actual  damages.   The
court then held that the parties contracted in the shadow of wage
and  hour  law, aware that its provisions set the  scope  of  the
permissible  terms  for their contract.   They  could  have,  and
should have, reasonably expected their contract to be interpreted
in  light  of  these  provisions.   It  granted  Throops  summary
judgment motion, approving his contract claim and enabling Throop
to  recover actual damages (but not liquidated damages) for three
years rather than two.
          Alaska   Statute  23.10.060  sets  out   the   overtime
provisions  of  the  AWHA.  Subsection  (c)  states  that  [t]his
section  is  considered included in all contracts of  employment.
Alaska Statute 23.10.130 sets out the statute of limitations  for
AWHA  claims, stating that [a]n action for unpaid minimum  wages,
unpaid  overtime  compensation, or liquidated  damages  under  AS
23.10.050   23.10.150  is forever barred  unless  it  is  started
within  two  years  after the cause of action accrues.39   Throop
makes two arguments concerning his breach of contract claim.   He
argues  first based on an incorporation theory that  because  Air
Logistics  violated the overtime provisions of AWHA  and  because
those  provisions were incorporated by law into his  contract  of
employment, his contract of employment was breached.  His  second
argument  is  that his actual contract, as reasonably  construed,
required  the  payment of overtime in accordance with  AWHA.   We
address  each  of  these  claims in the paragraphs  that  follow,
beginning with the incorporation theory.
          Under  Gore  v.  Schlumberger Ltd., when AWHA  overtime
requirements are incorporated into a contract, the limitations in
AWHA  are  as  well.40  In Gore the employee  requested  punitive
damages for a violation of the overtime claim of the AWHA.41  The
court   noted   that  the  AWHA  prescribes  with   comprehensive
specificity  the  remedies available for its violation  and  held
that [t]he comprehensiveness of this remedial system implies that
          the legislature did not intend to allow further unenumerated
remedies such as punitive damages.42  The court then addressed an
argument similar to Throops contract claim: whether the appellant
was  entitled to punitive damages under a contract  theory.   The
employee  in  Gore  noted  that  AS  23.10.060  incorporates  the
overtime provisions into employment contracts and argued that the
employer had breached the contract by violating the AWHA.43   The
employee  then  argued for punitive damages  under  a  breach  of
contract theory, arguing that if a contract is willfully violated
punitive damages should be available.44  This court rejected this
claim,  holding that if the statute is a part of every  contract,
so are its limitations.45
          The   analysis  in  Gore  is  applicable   to   Throops
incorporation theory.  The employee in Gore alleged a  breach  of
contract  solely on the basis of a violation of the AWHA overtime
provisions,   emphasizing  that  the  provision   was   expressly
incorporated into contracts by the statute.  The employee in Gore
requested  punitive  damages, which were available  for  contract
claims  but  not AWHA claims.  Throop is requesting a  three-year
statute  of  limitations, which is available for contract  claims
but  not AWHA claims.  In Gore we held that since the statute was
incorporated   into  the  contract,  its  limitations   must   be
incorporated as well.  While Gore dealt with limitations  on  the
type  of  damages available, we believe it is also applicable  to
limitations  regarding  the duration for  which  damages  can  be
recovered.   Thus,  under Gore, Throop can only  recover  on  his
incorporation theory for violations that occurred during the two-
year  statute  of  limitations period  that  is  set  out  in  AS
23.10.130.
          The Gore approach ensures that effect will be given  to
the  AWHAs statute of limitations provision.46  Under Alaska  law
all  employment  is contractual.47  If we were to  adopt  Throops
incorporation argument, any employee who alleged a  violation  of
the  AWHA  overtime  provisions could simply plead  a  breach  of
contract based on the incorporation of the overtime statute  into
the  employment contract.  All overtime claims would be  governed
by  the  three-year statute of limitations for contracts, and  AS
23.10.130   which  explicitly limits actions for unpaid  overtime
compensation to two years   would be largely superfluous.
          But  not  entirely  superfluous.   The  superior  court
reasoned  that  special remedies in the AWHA  liquidated  damages
and full attorneys fees  would still  be subject to the acts two-
year  limit even though unpaid overtime compensation is not. This
rationale  seems  doubtful  both as a  matter  of  the  statutory
language  and  legislative intent.  Section .130 expressly  makes
[a]n action for . . . unpaid overtime compensation, or liquidated
damages under AS 23.10.05023.10.150 subject to its two-year  bar.
Contract actions that include claims for unpaid overtime based on
the  incorporation clause of AS 23.10.060(c) are fairly described
as  action[s] for . . . unpaid overtime compensation . . .  under
AS  23.10.05023.10.150.  Additionally, it is  unlikely  that  the
legislature  intended  the main claim   unpaid  overtime   to  be
governed  by  a limitations period different from the limitations
period    for   special   remedies   claims.    These    combined
          considerations persuade us that section .130 applies to Throops
incorporation-based overtime claim.
          This  conclusion does not mean that all contract claims
for  unpaid overtime are subject to the two-year statute.  Claims
under contracts that call for overtime compensation in terms that
reasonably  can  be  interpreted as  encompassing  the  statutory
definition  should  fall within the contract limitations  period.
We  discussed  one such claim in Quinn v. Alaska State  Employees
Assn.48   Quinn  involved  a claim for  unpaid  overtime.49   The
plaintiffs  original suit only included statutory claims,  not  a
contract claim.50  But the Quinn court construed the complaint to
include  a  breach  of contract claim because the  plaintiff  had
attached  a  copy  of the collective bargaining contract  to  his
motion  for  summary  judgment.51  Although  not  stated  in  the
opinion,  the  contract  explicitly called  for  the  payment  of
overtime at one and one-half times the rate of regular pay.   The
Quinn  court  held that the statute of limitations for  contracts
therefore applied to Quinns overtime claim:  Thus, it is fair  to
construe  Quinns complaint as alleging a breach of the collective
bargaining  agreement, and to hold that the six-year  statute  of
limitation for contracts applies.52
          Throop  argues that his contract called for the payment
of  overtime in ambiguous terms and therefore the contract should
be  construed  so  that it is consistent with AWHA  requirements.
Air Logistics counters that the contract is not ambiguous because
it  clearly  treats  remote operations pay as separate  from  the
hourly  wage  on which overtime will be calculated,  and  clearly
specifies  the  number of hours that will  be  paid  as  overtime
hours.
          Air Logistics has the better of this argument.  Throops
contract  consists  of Air Logisticss policy manual  and  Throops
letter  of  hire.   The policy manual provides that:   For  hours
worked in excess of 8 hours per day or 40 hours straight time per
week,  overtime  will be paid at 1 1/2 times the  regular  hourly
rate.   The policy manual states that all employees will be given
a  letter  of hire that will establish initial rates of  pay  and
initial  assignments  as well as provide the  basis  for  a  more
detailed  explanation of Air Logs compensation  policy.   Throops
letter  of  hire stated that his base hourly wage was  $21.05,  a
rate that excluded ROP which, in turn, was explicitly said to  be
a  separate  pay item.  Likewise, the letter of hire stated  that
for  each  two-week  shift Throop would be  paid  for  ninety-six
straight  time  hours  and fifty overtime hours.   Since  Throops
contract  of employment is clear rather than ambiguous, the  rule
of  construction that ambiguous language in contracts will, where
reasonably  possible,  be  construed  in  accordance  with  legal
requirements does not apply to it.53
          Throop  also suggests that if the contract sets out  an
illegal   definition  of  overtime,  the  court   should   simply
substitute  lawful terms in accordance with AWHA.   In  our  view
this   argument   does   not  substantially   differ   from   the
incorporation   argument  discussed  and  rejected   above.    If
statutory   terms   are  substituted  their  limitations   should
accompany  them.   In  such  case  the  action  would  fairly  be
          considered one for unpaid overtime compensation under . . . AS
23.10.05023.10.150 and would therefore be covered by the two-year
statute of limitations prescribed by AS 23.10.130.
          For  the  reasons  expressed  above,  summary  judgment
should have been granted to Air Logistics on the contract claim.
     C.   The  Superior  Court Did Not Abuse  Its  Discretion  by
          Failing To Award Liquidated Damages.
          
          Throop  argues that the superior court erred by failing
to  award  liquidated  damages.  An  employer  who  violates  the
overtime or minimum wage provisions of the AWHA is usually liable
for  both unpaid overtime or minimum wage and an equal amount  in
liquidated  damages.54  Alaska Statute 23.10.110(d)  provides  an
exception to this rule.  It states that if the employer shows  by
clear  and  convincing evidence that it acted reasonably  and  in
good  faith the court may award no liquidated damages or a lesser
amount  of liquidated damages.55  This provision contains both  a
subjective element  that the employer acted in good faith  and an
objective element  that the employer reasonably believed  it  was
not violating AWHAs overtime provision.
          The  question  of whether an employer  has  shown  good
faith  and reasonableness by clear and convincing evidence  is  a
mixed  question  of law and fact.56  Therefore, factual  findings
will  be  overturned only if they are clearly erroneous,  but  an
application  of the law to established facts will be reviewed  de
novo.57   Once it is established that the superior court did  not
err  in  finding clear and convincing evidence of good faith  and
reasonableness, the superior courts decision regarding whether or
not  to  award  any level of liquidated damages is  reviewed  for
abuse of discretion.58
          The  superior court noted that the burden of  proof  on
the  employer  is  very  high, and the excuse  provision  [in  AS
23.10.110(d)  is]  rarely  enacted.  It  also  noted  that  [t]he
federal  counterpart to AS 23.10.110(d) imposes a lighter  burden
of  proof  on  an  employer,  and yet even  under  those  lighter
standards  excuse  from  the  strict  application  of  the   full
liquidated damages provision is rare.
          The superior court nonetheless found that Air Logistics
met  its  burden  of proving good faith by clear  and  convincing
evidence.   This  decision  was  based  on  testimony  that   Air
Logistics presented its entire pay program to a supervisor in the
DOL  Wage  and  Hour  Division,  Monte  Jordan,  and  that  after
extensive discussions she saw no problem with their payment plan.
All  add-ons, except the later instituted safety bonus, were part
of  the program presented to Jordan.  The court found that all of
Air  Logisticss  witnesses  denied  any  motive  to  mislead  and
testified that their purpose was to do things right, and avoid  a
law  suit  such as a competitor had had to deal with.  The  court
also noted that Air Logistics met with Jordan to confirm that  it
was  complying with the law and that if Jordan had  identified  a
problem  with any of the add-ons Air Logistics would have  simply
modified  its  pay  scheme to comply with  the  law,  and  likely
maintain   the  same  general,  competitive  wages.   There   was
absolutely  no  evidence  that the employer  had  any  motive  to
          conceal the nature of the add-ons from Jordan.
          With  respect  to the objective reasonableness  of  Air
Logisticss belief that it was complying with the law,  the  court
found  that this was confirmed by the differing opinions  offered
by knowledgeable Department of Labor employees:
          While an employer may well find it impossible
          to satisfy the good faith requirement without
          inquiring,  once the employer establishes  by
          testimony that it did make inquiries, and the
          Department  of Labor stated it  appeared  its
          wage   system   met  Alaska  law,   and   the
          Department   of  Labor  has  confirmed   that
          conference meetings discussing the  wage  and
          hour   requirements  were  held,  the   later
          conflicting  opinions of  the  Department  of
          Labor supports the claim by the employer that
          its belief was objectively reasonable.
          
          While  there  is little applicable Alaska law  on  what
constitutes  good  faith and objective reasonableness  under  the
AWHA,  there is a substantial body of federal law on this  issue.
The  AWHA mandates that the employer provide clear and convincing
evidence of good faith and objective reasonableness59 whereas the
FLSA requires an employer to show this to the satisfaction of the
court.60   Federal law is helpful in providing general guidelines
for what constitutes good faith and objective reasonableness.
          Certain factors emerge that are repeatedly relied  upon
by  the  courts.   For example, an employer  who  does  not  take
affirmative steps to learn the law will not be able to show  good
faith  and  reasonableness.61  This mirrors  the  only  statutory
guidance  given on this topic in the AWHA.62  Also, courts  often
examine  whether the employer went to counsel for  advice,63  and
some  cases  indicate  that reliance  on  counsel  alone  can  be
sufficient   to   establish  good  faith  and   reasonableness.64
Contacting the Department of Labor is also an important factor.65
In  Bowrin  v. Catholic Guardian Society, for example, the  court
noted  that courts may find that an employer acted in good  faith
where it relied on representations made by the DOL.66
          Several  courts  have  noted  that  the  fact  that  an
employers decisions are  above board and justified in public  may
satisfy  the  good  faith and reasonableness test.67   One  court
described why this factor is relevant:
          An  employers willingness to state and defend
          a ground suggests a colorable foundation, and
          openness   facilitates  challenges   by   the
          employees.   Double damages are  designed  in
          part  to compensate for concealed violations,
          which  may  escape scrutiny.  An increase  in
          damages   when  concealable  violations   are
          detected  and  corrected  presents  employers
          with the full costs of their actions, a point
          stressed  in the legislative history  of  the
          double-damages provision, which grew  out  of
          concern  that  violations would be  concealed
          and employees undercompensated.[68]
          
Finally, many federal courts have noted that the closeness of the
legal  question bears on the issue of objective reasonableness.69
As  one  court noted, where . . . there is no clear-cut violation
of  the applicable regulations, or the regulations themselves are
not specific, an interpretation that is found by the court to  be
incorrect can still be said to be reasonable.70
          The  superior courts factual findings as to  subjective
good faith are well supported by the record and do not constitute
clear  error.   According  to  the  testimony  of  Air  Logistics
management,  the pay plan was created in 1990 in  response  to  a
ruling issued to another helicopter company by the DOL that found
that  helicopter mechanics were not exempt from AWHA.   Prior  to
this  ruling  Air Logisticss mechanics received  a  salary.   Air
Logistics  tried  to create an hourly wage that approximated  the
same  salary.  According to testimony, management took the entire
proposed pay plan to the DOL to ensure compliance with applicable
laws.   After at least two  and probably more  meetings and phone
calls,  a  DOL supervisor approved the plan.  Air Logistics  also
showed its plan to its lawyer.  There was much testimony that Air
Logistics had no incentive to conceal anything and was trying  to
comply with the law.71  Once it had finalized the new pay plan, it
provided  employees  with detailed information  about  the  plan.
Given  this  testimony,  the superior  courts  finding  that  Air
Logistics  provided clear and convincing evidence  of  subjective
good faith is not clear error.
          The  superior courts holding that there was  clear  and
convincing evidence of objective reasonableness is similarly  not
erroneous  based on the facts related in the preceding paragraph.
Further,  this  case dealt with close legal questions  concerning
technical  aspects of calculating overtime pay.  The question  of
whether  or  not  ROP  should have been included  was  especially
close, as it appears that there was not even consensus among high-
level  DOL  staff as to this issue.72  While it might  have  been
somewhat  easier to determine that the other four add-ons  should
have  been included in the regular rate, that would have required
a  sophisticated analysis of a technical wage and hour issue that
seems  not  to  have  occurred to the  DOL  supervisor  when  she
originally  reviewed the plan.  Finally, the analysis of  whether
the  on-call  hours were compensable under the AWHA was  a  close
question that required a deep understanding of wage and hour case
law.   The  closeness  of  the legal issues  indicates  that  the
overtime errors would not have been obvious to Air Logistics from
the beginning.
          The  only  factor weighing against Air  Logistics  with
respect  to the objective reasonableness factor is the fact  that
it  did  not  get a written determination from the  DOL.   Throop
heavily  emphasizes the failure to obtain confirmation in writing
from the DOL, relying on Armitage v. City of Emporia73 and Renfro
v. City of Emporia.74  In Armitage, the court stated:
          The  sole evidence of reasonableness  offered
          by   the  City  is  the  testimony  of  Chief
          Blemenkamp  that he called the Department  of
          Labor seeking approval of the pay plans.   If
          the  City  would  have obtained  confirmation
          from the Department of Labor, there would  be
          no  lawsuit since the City could not be  held
          liable.   In addition, the City was aware  of
          its  mistakes  due to the pending  litigation
          instituted by the Citys firefighters.   Thus,
          the  Citys failure to obtain written approval
          of  its  pay plans overshadows any  claim  of
          reasonableness.[75]
          
Similarly,  in  Renfro  the  record reflected  [the]  Citys  only
attempt to determine if they were in compliance with the FLSA was
a  phone-call made to a Mrs. Spivey at the DOL by Carol King,  an
administrative assistant for [the] City.76  The court found  this
to  be  inadequate  since King could not recall Spiveys  position
with the DOL or in what detail she described the policy and since
the  city  never  requested  a written  opinion.77   The  factual
circumstances  in the case at hand are different.  Air  Logistics
did not just make a telephone call to the DOL but rather met with
department  representatives on at least two  occasions,  received
approval of its pay plan, and consulted with an attorney.   There
was  no pending litigation, so Air Logistics was not aware of any
possible  violations.  Additionally, Jordan  confirmed  that  the
meetings  occurred  and  stated that most  of  her  responses  to
questions by employers were verbal, and verbal approval of a  pay
plan would not have been unusual.
          Air Logistics initiated interactions with a supervisory
level  DOL  employee,  provided her with  a  detailed  pay  plan,
received  her  approval of the plan, consulted with its  attorney
regarding the issue, was open with its employees about  how  they
were being paid, and lacked intent to conceal or mislead the  DOL
or its employees.  Given these circumstances and the closeness of
the  legal questions involved, the superior court did not err  in
finding    clear   and   convincing   evidence    of    objective
reasonableness.
          Since  we  uphold the superior courts holding that  Air
Logistics showed clear and convincing evidence of good faith  and
reasonableness,  we review for abuse of discretion  the  superior
courts  decision  not  to award liquidated  damages.   Given  the
persuasive  evidence  showing that Air Logistics  acted  in  good
faith,  we  find  that  the  superior court  did  not  abuse  its
discretion by declining to award liquidated damages.
     D.   The  Superior  Court Did Not Abuse Its Discretion  with
          Respect to Most of the Attorneys Fees Award.
          
          Since   this  opinion  reverses  the  superior   courts
holdings regarding the contract claim, the superior court  should
recalculate   attorneys  fees  accordingly.    However,   it   is
appropriate   to   address  several  specific  claims   regarding
attorneys fees.
          Throop   requested  full  attorneys   fees   for   work
associated  with class certification, notice, and  representation
($32,000),  full fees for work related to a sanction against  Air
          Logistics for improperly contacting class members ($13,000), and
85%  95% of the value of class counsels fees, which it stated was
$309,320.  Thus Throop requested over $300,000 in attorneys  fees
for  a  judgment  that totaled a little over  $100,000  including
interest and the catch-up payments.  The superior court,  relying
on  the  contested with trial fee schedule set out in Civil  Rule
82(b)(1),78  awarded  Throop $9,660.42  in  attorneys  fees  plus
$6,660.00 for fees related to the issue of improper contact.
          Throop argues on appeal that the superior court did not
follow  our case law concerning how to calculate Rule 82 fees  in
class  actions.   This court has set out a two-step  method  that
trial  courts  may use when determining Rule 82 awards  in  class
actions: (1) determine the compensable value of the services  the
attorneys  rendered to the class, and (2) apply Rule  82  to  the
amount calculated in Step 1 to decide how much [the losing party]
should pay.79  However, this analysis is not mandatory,80 and the
superior court did not abuse its discretion by declining to apply
it here.
          Throop  also  argues that the superior court  erred  by
disregarding  Air Logisticss catch-up payments  as  part  of  the
recovery.   Throop is correct.  After Throop filed his  complaint
Air  Logistics contacted the DOL to get its opinion regarding the
add-ons.   The  DOL  found that four of  the  add-ons  should  be
included in the regular rate of pay.  Air Logistics then made two
payments  to its employees for those add-ons totaling  $6,527.55.
The  payments only covered the difference in overtime  for  hours
recorded  as  actually worked.  After the superior court  granted
summary judgment on the question of whether the ROP add-on should
be  included  in the regular rate, and after receiving  a  second
opinion  from  the DOL to the same effect, Air Logistics  made  a
second payment totaling $20,842.83. This represented the overtime
differential  for ROP for all hours recorded as actually  worked.
These  payments  were deducted from the final judgment,  and  the
superior court did not include them as part of the money judgment
when  it awarded attorneys fees. Since they were made as a result
of  the  litigation, the fact that Air Logistics made them  early
should not shield them from Rule 82.81
          Throop  argues  that  the superior  court  should  have
awarded  full  fees  for  all work reasonably  incurred  both  in
obtaining  class certification and for issues relating  to  class
representation,  totaling  $32,000.   His  argument   relies   on
Monzingo  v.  Alaska Air Group, Inc., in which this  court  found
that  attorneys fees for class certification issues  may  not  be
awarded  against a non-prevailing plaintiff.82  He does not  cite
any  case  directly supporting the proposition that  a  plaintiff
must  receive full attorneys fees for class certification issues.
The  superior court did not abuse its discretion in denying  this
request.
          Throop  also  argues that the superior court  erred  in
disregarding  the uncontested evidence that all  but  $42,000  of
class counsels work was expended on the class recovery from  [Air
Logistics]  for  illegally unpaid overtime.  The  superior  court
emphasized that prior to trial damages were stipulated under  the
summary  judgment rulings and the trial was only on the issue  of
          injunctive relief and liquidated damages. Air Logistics prevailed
on  these issues.  It noted that the liquidated damages are  tied
to  the  underlying wage claims.  It is virtually  impossible  to
segregate attorney time related to the liquidated damages  claims
from  the  underlying wage issue.  The superior court then  found
that,  [o]n these facts, it would be unreasonable and  unfair  to
award  enhanced  and full fees of $300,000 to the plaintiff  when
the bulk of those efforts were unproductive.  The trial court did
not abuse its discretion in these findings.
IV.  CONCLUSION
          All  of the employees pay hours were compensable  hours
for  the  purposes of the AWHA.  Therefore we AFFIRM the superior
courts  grant  of summary judgment on the issue of hours  worked.
Since  the two-year AWHA statute of limitations for the  contract
overtime claim applies, summary judgment should have been granted
to  Air  Logistics  on  that  claim.  Therefore  we  REVERSE  the
superior  courts  grant  of summary judgment  to  Throop  on  the
contract claim.
          We AFFIRM the superior courts findings as to liquidated
damages  on  the  basis  that Air Logistics  provided  clear  and
convincing evidence of good faith and reasonableness.  We  REMAND
for  a  recalculation  of  attorneys fees  consistent  with  this
opinion.
          In the Supreme Court of the State of Alaska



Air Logistics of Alaska, Inc.,  )
                                )Supreme Court Nos. S-12169/12189
                     Appellant/Cross-Appellee, )
            v.                  )            Order
                                )   Petition for Rehearing
David Throop, individually and on              )
behalf of all similarly situated persons,      )
                                )
                     Appellee/Cross-Appellant.  )        Date  of
Order: 4/11/08
                                )
Trial Court Case # 4FA-03-00835CI

          Before:   Fabe,  Chief Justice, and Matthews, Eastaugh,
                    and  Carpeneti, Justices.  [Bryner,  Justice,
                    not participating.]

     On  consideration  of the Petition for  Rehearing  filed  on
12/20/2007,

     It is Ordered:

     1.   The Petition for Rehearing is Granted.

     2.   Opinion No. 6211, issued on 12/14/07, is Withdrawn.

     3.   Opinion No. 6248 is issued on this date in its place.

     Entered by direction of the court.

                                   Clerk of the Appellate Courts


                                   
                                   Marilyn May

cc:  Supreme Court Justices
     Judge Olsen
     Trial Court Appeals Clerk
     West Publishing
     Other Publishers

Distribution:

     Gregory A Miller
     Birch  Horton  Bittner & Cherot
     1127 West 7th Avenue
     Anchorage AK 99501

     Zane D Wilson
     Cook Schuhmann & Groseclose Inc
     714 Fourth Avenue Suite 200
     Fairbanks AK 99701

     William B Schendel
     Schendel Law Office
     250 Cusham Street, Suite 500
     Fairbanks AK 99701
_______________________________
     1     Air  Logisticss  primary client  is  Alyeska  Pipeline
Service   Company  and  the  remote  locations  were  needed   so
helicopters  could  access remote parts  of  the  pipeline.   The
mechanics in Fairbanks worked normal eight-hour shifts  and  were
only paid overtime for hours actually worked.

     2     The  add-ons listed in Throops complaint included  the
following:  remote operations pay (ROP) or field pay, travel pay,
advisory  station  operator  pay, inspection  authorization  pay,
safety  plan pay, voluntary participation plan pay, and Christmas
pay.  The safety pay apparently broke up into three parts: impact
awards  for  safety  pay, major awards for safety,  and  seasonal
safety awards.

     3     In  April 2004 Superior Court Judge Richard D.  Savell
certified   a   class  of  approximately  forty-five  individuals
consisting  of  [a]ll hourly paid employees of Air Logistics  who
worked  at any time from April 16, 2000, through March 28,  2003,
who  received  any  of the contested add-ons:  remote  operations
pay;  advisory station operator pay; inspector authorization pay;
major  safety award pay; or seasonal safety award pay. After  the
opt-out  period  there were thirty-nine people remaining  in  the
class.  The plaintiff class is referred to collectively as Throop
in this opinion.

     4    DeNardo v. Bax, 147 P.3d 672, 676 (Alaska 2006).

     5    Id. at 676-77 (citation omitted).

     6    8 Alaska Administrative Code (AAC) 15.160(h) (2004).

     7    Id.

     8    AS 23.10.060(b) (emphasis added).

     9     The DOLs regulations concerning overtime specify  that
periods of on call and standby or waiting time  should be counted
towards  overtime unless the employee is completely  relieved  of
all  duties for 20 minutes or more during which the employee  may
use  the time effectively for the employees own purposes.  8  AAC
15.100(c)  .   The definitions for on call time  and  standby  or
waiting time in the DOL regulations also emphasize the importance
of  determining if an employees time can be used effectively  for
the employees own purposes.  8 AAC 15.910(a)(9), (13).

     10     29 U.S.C.  201-19 (2007).  In McKeown v. Kinney  Shoe
Corp., this court noted that the AWHA is based on the FLSA.   820
P.2d   1068,  1071  n.2  (Alaska  1991).   While  federal   court
interpretations  of  the  FLSA are not binding  on  Alaska  court
interpretations of the AWHA . . . we have found the federal court
interpretations  of  the FLSA helpful in interpreting  consistent
aspects of the AWHA.  Id. (citation omitted).

     11    323 U.S. 126, 133 (1944).

     12    323 U.S. 134, 137 (1944).

     13     Id. at 136; see Armour, 323 U.S. at 133 (Whether time
is  spent  predominantly for the employers  benefit  or  for  the
employees  is a question dependent upon all the circumstances  of
the case.).

     14     Owens  v.  Local No. 169, Assn of  W.  Pulp  &  Paper
Workers, 971 F.2d 347, 350 (9th Cir. 1992) (footnotes omitted).

     15    102 P.3d 947, 959 (Alaska 2004) (citing Owens, 971 F.2d
at 350).

     16    971 F.2d at 350-51 (footnotes omitted).

     17     Technically  the mechanics were not required  by  Air
Logistics  to  live on premises, but Air Logistics conceded  that
given  that the field locations were far from any town, they  did
so.

     18    357 F.3d 931 (9th Cir. 2004).

     19    Id. at 933-34.

     20    Id. at 936-37.

     21    Id. at 936.

     22    Id.

     23    Id. at 938.

     24    Id. at 933-34.

     25    Id.

     26    Id. at 937.

     27    Id. at 934, 936-37.

     28     In  Paniagua v. City of Galveston, for  example,  the
plaintiff argued that his employers agreement to pay him five and
one-half hours of overtime for each week he was on standby  makes
his standby time compensable under the FLSA.  995 F.2d 1310, 1316
(5th Cir. 1993).  The court disagreed, stating the following:

               The Citys agreement to pay Paniagua five
          and  one-half  hours overtime for  each  week
          spent   on   standby  does  not   alter   our
          conclusion.  .  .  .  [T]he  City   Personnel
          Director   who   drafted  the   standby   pay
          provision  testified that it was designed  to
          compensate employees for the inconvenience of
          being  on  standby; the use of five and  one-
          half  hours  overtime per week is merely  the
          formula  the City has chosen to quantify  the
          inconvenience.  In short, the Citys agreement
          to  compensate  employees  for  inconvenience
          does  not, in our view, automatically  render
          the  time spent on standby working time under
          the FLSA.
          
Id.  at  1317; see Reimer v. Champion Healthcare Corp., 258  F.3d
720,  725-26 (8th Cir. 2001); Berry v. County of Sonoma, 30  F.3d
1174, 1180 n.5 (9th Cir. 1994); Allen v. Atl. Richfield Co.,  724
F.2d 1131, 1135 (5th Cir. 1984).

     29    Allen, 724 F.2d at 1136; see Owens, 971 F.2d at 354.

     30    30 F.3d at 1180-81.

     31     It  is  true that Air Logistics deemed the hours  pay
hours  and  mentioned  in its personnel  manual  that  the  field
mechanics  would be paid even when they worked fewer hours.   But
we  do  not  think  these caveats override the  basic  point:  by
agreeing  to pay the employees an overtime rate for the hours  in
question  Air Logistics indicated that it considered the  on-call
time to be work.

     32    29 Code of Federal Regulations (C.F.R.)  785.23 (2007)
(emphasis added).

     33    See Leever v. Carson City, 360 F.3d 1014, 1020 n.4 (9th
Cir.  2004)  (We  accept  the Department of  Labors  interpretive
regulations  of  the  FLSA,  including   785.23,  as  persuasive,
although they are not binding.).

     34    357 F.3d at 941.

     35    Id. at 934.

     36    Id.

     37    Id.

     38    Id. at 942.

     39    AS 23.10.130 (emphasis added).

     40    703 P.2d 1165 (Alaska 1985).

     41    Id. at 1165

     42    Id. at 1165, 1166.

     43     Id.  at 1166.  AS 23.10.060 is not mentioned  in  the
opinion, but the appellant in Gore relied upon this provision  in
his  brief.   Gore notwithstanding, one might wonder whether  the
AWHA  limitations  on  the right of overtime  recovery  that  are
expressed  in  sections other than AS 23.10.060 are  incorporated
into  contracts  of employment by operation of  AS  23.10.060(c).
Subsection (c) expressly incorporates only this section, that  is
AS  23.10.060, not other sections of the AWHA:  This  section  is
considered    included   in   all   contracts   of    employment.
Nevertheless, we believe that the incorporation of the  statutory
right  to  overtime necessarily encompasses statutory limitations
on  that  right.  For example, reading AS 23.10.060 in  isolation
one  might  think  that the employment contract  for  a  domestic
servant  would  include the right to overtime compensation.   But
this  is  not  the  case  because of a  statutory  exemption  for
employees in domestic service expressed in AS 23.10.055(a)(4).

     44    Gore, 703 P.2d at 1166.

     45    Id.

     46     See  2A  Norman  J.  Singer, Statutes  and  Statutory
Construction   46:06, at 181, 186-87 (6th ed.  2000)  (A  statute
should  be  construed  so  that  effect  is  given  to  all   its
provisions,  so that no part will be inoperative or  superfluous,
void  or  insignificant, and so that one section will not destroy
another . . . .) (footnotes omitted).

     47    Selid Constr. Co. v. Guar. Ins. Co., 355 P.2d 389, 393
(Alaska 1960).

     48    944 P.2d 468 (Alaska 1997).

     49    Id. at 470.

     50    Id.

     51    Id. at 472.

     52    Id.

     53    See Restatement (Second) of Contracts  203 (1979):  In
the  interpretation of a promise or agreement or a term  thereof,
the  following standards of preference are generally  applicable:
(a)  an  interpretation  that gives  a  reasonable,  lawful,  and
effective   meaning  to  all  the  terms  is  preferred   to   an
interpretation that leaves a part unreasonable, unlawful,  or  of
no effect[.]

     54    AS 23.10.110(a).

     55    AS 23.10.110(d) reads in full as follows:

               In  an  action under (a) of this section
          to  recover  unpaid overtime compensation  or
          liquidated  damages for unpaid  overtime,  if
          the  defendant shows by clear and  convincing
          evidence that the act or omission giving rise
          to the action was made in good faith and that
          the   employer  had  reasonable  grounds  for
          believing that the act or omission was not in
          violation  of  AS 23.10.060,  the  court  may
          decline  to award liquidated damages  or  may
          award  an  amount of liquidated damages  less
          than  the  amount  set out  in  (a)  of  this
          section.
          
     56     See Bratt v. County of L.A., 912 F.2d 1066, 1071 (9th
Cir. 1990).

     57     See State v. Parker, 147 P.3d 690, 694 (Alaska 2006);
Fred  Meyer of Alaska, Inc. v. Bailey, 100 P.3d 881, 884  (Alaska
2004);  Central Bering Sea Fishermens Assn v. Anderson,  54  P.3d
271,  277  (Alaska 2002).  The Ninth Circuit has noted  that  the
determination  regarding  subjective  good  faith  is   generally
factual  and  reviewed  for  clear error  and  the  determination
regarding  objective reasonableness involves applying the  proper
interpretation   of  the  FLSA  and  supporting  regulations   to
uncontested facts, a primarily legal determination, which  should
be reviewed de novo.  Bratt, 912 F.2d at 1071-72; see Fred Meyer,
100  P.3d  at  889  (reviewing the superior courts  determination
regarding good faith for clear error).

     58    See Pabst v. Okla. Gas & Elec. Co., 228 F.3d 1128, 1136
(10th Cir. 2000);  Bratt, 912 F.2d at 1071.

     59    AS 23.10.110(d).

     60     29 U.S.C.  260 (2007).  Federal courts have generally
read  this  to  require  employees  to  bring  forth  plain   and
substantial  evidence.  E.g., Bowrin v. Catholic  Guardian  Socy,
417  F.  Supp. 2d 449, 471 (S.D.N.Y. 2006); Gilliam v. Montgomery
Ward  &  Co., 912 F. Supp. 195, 197 (E.D. Va. 1996);  Dalheim  v.
KDFW-TV, 712 F. Supp. 533, 536 (N.D. Tex. 1989).

     61    E.g., Martin v. Ind. Mich. Power Co., 381 F.3d 574, 584
(6th  Cir. 2004); Gustafson v. Bell Atl. Corp., 171 F.  Supp.  2d
311,  326 (S.D.N.Y. 2001); Debejian v. Atl. Testing Labs.,  Ltd.,
64  F. Supp. 2d 85, 91 (N.D.N.Y. 1999); Pautlitz v. City of Naper
ville, 874 F. Supp. 833, 835 (N.D. Ill. 1994).

     62    AS 23.10.110(g) (Failure to inquire into Alaska law is
not   consistent   with  a  claim  of  good  faith   under   this
subsection.).

     63     See,  e.g., Lee v. Coahoma County, 937 F.2d 220,  227
(5th  Cir. 1991); Hill v. J.C. Penney Co., 688 F.2d 370, 375 (5th
Cir.  1982); Pautlitz, 874 F. Supp. at 835.  Several courts  have
held,  however, that employers who contact an attorney or  agency
generally  about  the  law,  but do  not  give  specific  factual
information  about their case will not meet the  standard.   See,
e.g.,  Kinney v. District of Columbia, 994 F.2d 6, 12 (D.C.  Cir.
1993);  Bowrin, 417 F. Supp. 2d at 473; Debejian, 64 F. Supp.  2d
at  91;  Pautlitz, 874 F. Supp. at 835; Shelton v. Ervin, 646  F.
Supp. 1011, 1020 (M.D. Ga. 1986).

     64     Martin v. David T. Saunders Constr. Co., 813 F. Supp.
893,  903  (D. Mass. 1992); see Hultgren v. County of  Lancaster,
913  F.2d 498, 509 (8th Cir. 1990); VanDyke v. Bluefield Gas Co.,
210 F.2d 620, 622 (4th Cir. 1954).

     65    Lee, 937 F.2d at 227; see Garcia v. Allsups Convenience
Stores, Inc., 167 F. Supp. 2d 1308, 1316 (D.N.M. 2001).

     66    417 F. Supp. 2d at 473.

     67    Bernard v. IBP, Inc., 154 F.3d 259, 267 n.35 (5th Cir.
1998)  (quoting Martinez v. Food City, Inc., 658  F.2d  369,  376
(5th  Cir.  1981)); Bratt v. County of L.A., 912 F.2d 1066,  1072
(9th  Cir. 1990); Herman v. Hogar Praderas de Amor, Inc., 130  F.
Supp.  2d  257, 267 (D.P.R. 2001); Tefft v. State, 894 P.2d  317,
324 (Mont. 1995).

     68     Walton v. United Consumers Club, Inc., 786 F.2d  303,
312 (7th Cir. 1986).

     69     Kinney, 994 F.2d at 12; Cross v. Ark. Forestry Commn,
938  F.2d  912,  918 (8th Cir. 1991); Bratt, 912  F.2d  at  1072;
Gilliam,  912  F. Supp. at 199; Bond v. City of Jackson,  772  F.
Supp. 1516, 1519 (S.D. Miss. 1989); Dalheim, 712 F. Supp. at 540.

     70     Berry v. Sonoma County, 791 F. Supp. 1395, 1416 (N.D.
Cal. 1992), revd on other grounds, Berry v. County of Sonoma,  30
F.3d 1174 (9th Cir. 1994).

     71     The  testimony  that it had no incentive  to  conceal
anything  is convincing because if the DOL had expressed concerns
about  the add-ons Air Logistics could have merely included  them
in  the  regular  rate  when calculating  overtime  and  slightly
reduced  the base rate to achieve the same overall salary  level.
In  light of this there is no obvious motive it might have had to
conceal any information.

     72     Throop  strongly objects to the admission  of  expert
testimony  of  one of the DOL officials, Randy Carr.   When  Carr
testified  about the ROP he was testifying as a fact witness  and
merely  putting forth the fact that he continued to maintain  his
opinion with all of the facts in front of him.  This goes to  the
objective reasonableness of Air Logisticss position.  He was  not
testifying as an expert as to the underlying question of  whether
the ROP should have been included in the regular rate.  As to any
other  expert  testimony,  we review the  question  of  objective
reasonableness  de  novo,  and the superior  courts  holding  can
easily be upheld without relying on Carrs expert testimony.

     73    782 F. Supp. 537 (D. Kan. 1992), revd, Armitage v. City
of Emporia, 982 F.2d 430 (10th Cir. 1992).

     74    948 F.2d 1529 (10th Cir. 1991).

     75    782 F. Supp. at 546 (citation omitted).

     76    948 F.2d at 1541.

     77    Id.

     78     In  general, successful plaintiffs are awarded  full,
reasonable attorneys fees under the AWHA.  AS 23.10.110(c).   The
exception is when, as here, a defendant who violated the overtime
provisions  shows  good  faith and reasonableness  by  clear  and
convincing  evidence. AS 23.10.110(e).  Once  that  occurs,  AWHA
directs the court to calculate attorneys fees using Rule 82.   AS
23.10.110(e)(1).

     79    Municipality of Anchorage v. Gentile, 922 P.2d 248, 263
(Alaska 1996).

     80    See, e.g., Intl Seafoods of Alaska, Inc. v. Bissonette,
146  P.3d  561, 565-66, 573 (Alaska 2006) (upholding an attorneys
fee  award  in a class action where the trial court  awarded  the
prevailing  party  a  percentage of the award  under  Civil  Rule
82(b)(1) subject to adjustments under Civil Rule 82(b)(3)).

     81     The damages in this case were not awarded as a result
of  a  trial.  The payments for the four add-ons for hours worked
were  not  contested  and  attorneys fees  should  be  calculated
accordingly.  The payments for the ROP and compensable hours were
contested  but resolved on summary judgment.  Since the contested
damages  were  awarded  as  a result  of  summary  judgment,  the
superior  court  also  appears to  have  erred  in  applying  the
contested  with  trial fee schedule to the rest  of  the  damages
rather than the contested without trial schedule.

     82    112 P.3d 655, 668 (Alaska 2005).

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