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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
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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