BRONKEN S GOODTIME CO v BISHOP
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No. 82-220 I N THE SUPREME COURT OF THE STATE OF !O J A ; A I TT TS 1982 B O K N ' S G O O D T I f E COfi'IFA'NY R N E P e t i t i o n e r and Respondent, -vsDAVID J . BISHOP, Respondent and A p p e l l a n t . Appeal from: The D i s t r i c t C o u r t o f t h e E i g h t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County o f G a l l a t i n , The Eonora b l e W. W, L e s s l e y , J u d g e p r e s i d i n g . C o u n s e l o f Record: For Appellant: Wellcome & F r o s t , Bozeman, Montana F o r Respondent: Lyman B. B e n n e t t , 111, Bozeman, Montana P a u l J. Van T r i c h t , Dept. o f L a b o r , H e l e n a , F4ontana. Submitted on B r i e f s : Decided: September 9 , 1932 December 6 , 1982 Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Plaintiff appealed from a District Court reversal of a hearing officer's award to plaintiff of wages and a penalty due from defendant employer. We vacate the judgment and reinstate the hearing officer's decision. John Bronken incorporated defendant corporation in March, 1979, with the anticipation of being a wine distributor because the wine initiative had passed, legalizing the sale of wine in grocery stores as of July 1, 1979. In early April, 1979, plaintiff and John Bronken, president of defendant corporation, met at the Elks Club in Bozeman, Montana, to discuss the terms of plaintiff's employment with defendant. ment. Plaintiff was to be the head of the wine depart- There is a conflict of testimony as to what was agreed upon at this meeting. Defendant claims that the union contract under which some of his other employees were hired was discussed in relation to plaintiff's hourly wage only (plaintiff was paid as a driver-salesman under the contract) and that the rest of the union contract at issue here was not applicable to plaintiff. Plaintiff claims that all aspects of his employment were to be governed by the entire union agreement. Plaintiff requested to be paid weekly as was customary with the union employees, but plaintiff also expressed disapproval of joining the union so money which would have ordinarily gone to his union pension and hospitalization benefits was paid leave, vacation to him directly. pay and overtime The topics of sick compensation were not addressed at this meeting. Prior to April 16, 1979, plaintiff went to defendant's offlce to obtain some sweeping compound to clean out plaintiff's apartment and Bronken gave plaintiff a copy of the union agreement. No portions of this agreement were edited or stricken out. Although plaintiff did not actually appear at defendant's place of business to begin working until April 23, 1979, his pay raises indicate that his official hiring date was April 16, 1979. His duties were to manage and set up the wine department for defendant and included promoting the wines defendant wholesaled to restaurants and managing the accounts thus set up. Dan Rasmussen was hired on a day-to-day basis for approximately two weeks to assist in setting up the wine department in its initial stages and, at the end of that time, was laid off. During the fall of 1979, Gary Johnson was hired as a wine deliverer, which included delivering wine that plaintiff had presold. Johnson also received instructions from plaintiff on displays to be built and on keeping store shelves stocked with wine. John Bronken testified that Johnson reported directly to plaintiff and no one else. Plaintiff was discharged on April 14, 1980, and on June 17, 1980, plaintiff filed a wage claim with the Labor Standards Division of the Department of Labor and Industry, alleging that defendant owed him wages including overtime and payment for holidays, vacations and for working on his birthday. hearing On January 19, 1981, a hearing was held before a officer of the Labor Commission. The hearing officer found that the union contract was the best indicator of the employment relationship between plaintiff and defendant and that it governed said relationship. was n o t a s u p e r - h e a r i n g o f f i c e r a l s o found t h a t p l a i n t i f f v i s o r a n d t h a t d e f e n d a n t owed p l a i n t i f f 'The $1,404.48 i n wages which i n c l u d e d o v e r t i m e , v a c a t i o n p a y , and f o u r h o u r s p a y o n t h e day of $1,404.48 On Industry d i s c h a r g e and t h a t d e f e n d a n t owed a p e n a l t y o f by v i r t u e o f s e c t i o n 39-3-206, February ordered 1981, 20, defendant the to MCA. Department pay these two Department t o hold i n t r u s t f o r p l a i n t i f f . order was appealed to the Eighteenth of Labor sums and to the The D e p a r t m e n t District Judicial C o u r t , G a l l a t i n County, and t h e Department i n t e r v e n e d . The D i s t r i c t Court reversed t h e hearing o f f i c e r ' s determination and found t h e r e was that defendant no m u t u a l owed plaintiff consent with h o l i d a y pay o r p a y f o r regard t h e day of plaintiff reversing the appeal hearing from the officer I Motions to The D e p a r t m e n t District s because t o overtime pay, discharge. amend t h e D i s t r i c t C o u r t o r d e r w e r e d e n i e d . and nothing Court decision and decisions denying the m o t i o n t o amend. W e f r a m e t h e i s s u e s on a p p e a l t h u s : (1) Was the hearing officer's conclusion that the u n i o n a g r e e m e n t g o v e r n e d t h e employment r e l a t i o n s h i p b e t w e e n plaintiff and defendant reliable, probative c l e a r l y erroneous i n view of the and s u b s t a n t i a l e v i d e n c e on t h e whole record? (2) Was the hearing officer's determination that p l a i n t i f f was n o t a s u p e r v i s o r c l e a r l y e r r o n e o u s i n v i e w o f the reliable, probative and substantial evidence on the whole r e c o r d ? Before addressing t h e s e i s s u e s , we i n i t i a l l y t a k e n o t e of the scope of judicial review of agency decisions: "(2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: "(a) in violation of constitutional or statutory provisions; "(b) in excess of the statutory authority of the agency; "(c) made upon unlawful procedure; "(d) affected by other error of law; clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; "(e) "(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or "(g) because findings of fact, upon issues essential to the decision, were not made although requested." Section 24-704(2), MCA. Our limited scope of judicial review of agency decisions was recently discussed in State ex rel. Montana Wilderness Association et al. v. Board of Natural Resources and Conservation et al. 734, 39 St.Rep. 1238. (1982), - Mont . , 648 P.2d A court may not reverse the agency decision unless substantial rights of the appellant have been prejudiced because the agency determination was clearly erroneous in light of the reliable, probative and substantial evidence (section 2-4-704(2)(e), MCA). Also, a review- ing court may not substitute its judgment for that of the agency's as to the weight of the evidence on questions of fact (section 2-4-704(2), MCA). In Montana Wilderness s u p r a , w e n o t e d t h a t o u r r e v i e w was l i m i t e d t o Association, d e t e r m i n i n g whether t h e a d m i n i s t r a t i v e b o d y ' s d e c i s i o n was s u p p o r t e d by s u b s t a n t i a l e v i d e n c e . Regarding t h e f i r s t i s s u e , p l a i n t i f f a r g u e s t h a t t h e r e are a number of c o r r e l a t i o n s between the parties' actual c o n d u c t and t h e terms o f t h e u n i o n a g r e e m e n t , i n c l u d i n g t h e facts that union health holidays plaintiff and received pension mentioned in in cash benefits, the union he the equivalent was paid agreement of on all except his b i r t h d a y a n d was p a i d w e e k l y a s were m o s t u n i o n e m p l o y e e s . P l a i n t i f f f u r t h e r a r g u e s t h a t t h e r e was a n i m p l i e d c o v e n a n t of good faith and c i t i n g G a t e s v. fair L i f e of , - Mont. - 638 P.2d dealing in employment c o n t r a c t s , Montana I n s u r a n c e Company 1 0 6 3 , 39 S t . R e p . (1982), 1 6 , and t h a t s i n c e d e f e n d a n t c r e a t e d t h e a m b i g u i t y i n t h e employment c o n t r a c t , t h e a m b i g u i t y s h o u l d be r e s o l v e d a g a i n s t d e f e n d a n t . Appellant Department contends t h a t t h e D i s t r i c t Court e r r e d i n a p p l y i n g t h e law of e x p r e s s c o n t r a c t s t o t h e f a c t s and t h a t t h e h e a r i n g o f f i c e r c o r r e c t l y a p p l i e d t h e l a w o f implied contracts. The D e p a r t m e n t t h e n r e a s o n s t h a t c o n d u c t of t h e d e f e n d a n t r e q u i r e d a f i n d i n g t h a t t h e union c o n t r a c t was a n i m p l i e d p a r t o f t h e employment b e t w e e n p l a i n t i f f a n d defendant. D e f e n d a n t c o n c e d e s t h a t t h e p o r t i o n s o f t h e u n i o n cont r a c t r e l a t i n g t o wages, reimbursement f o r t r a v e l expenses a n d h e a l t h and p e n s i o n b e n e f i t s w e r e i n c o r p o r a t e d i n t o t h e employment a g r e e m e n t , b u t a r g u e s t h a t t h e r e was no m u t u a l c o n s e n t w i t h r e g a r d t o o v e r t i m e , h o l i d a y p a y and p a y o n d a y of d i s c h a r g e . been a Defendant f u r t h e r a r g u e s t h a t t h e r e must have s p e c i f i c i d e n t i f i c a t i o n of t h e terms of the union agreement to be incorporated into the employment agreement between plaintiff and defendant before adoption by reference may be had and, since there was no discussion of those terms at the meeting at the Elks Club, they may not be incorporated. There was substantial evidence here to support the hearing officer's findings. (19tiO), - Mont . , We affirm them. Matter of Shaw 615 P.2d 910, 37 St.Rep. 1480. It is clear from the record that plaintiff's employment contract paralleled the union contract in numerous ways including paid holidays, health and pension benefits, weekly paychecks and travel expense reimbursement. It is also uncon- troverted that defendant furnished plaintiff with a copy of the union agreement with no portions deleted or marked out. The hearing officer could reasonably conclude, as he did, that the union contract could also be looked to for the contested portions of plaintiff's pay, i.e., overtime, vacation pay, payment on the day of discharge, and holiday pay. The focus of the second issue involves the hearing ofricer's rejection of defendant's claim that plaintiff acted in a supervisory capacity and was thus exempt from overtime pay consideration. Plaintiff argues that even if the union agreement is not incorporated into the employment agreement, it is clear that plaintiff is still entitled to the overtime wages awarded because plaintiff was supervisor or bona fide executive under 406(l)(j), MCA. not a section 39-3- To be a bona fide executive requires that the individual customarily and regularly supervise at least two fulltime employees or the equivalent. Roan (198l), - Mont . , Rosebud County v. 627 P.2d 1222, 38 St.Rep. 639. See also, Garsjo v. Department of Labor and Industry (1977), 172 Mont. 182, 562 P.2d 473. Defendant employer points to the fact that Gary Johnson basically worked for plaintiff and that plaintiff was also responsible for the supervision of Dan Rasmussen who was hired for approximately two weeks to help set up the wine displays. There was substantial credible evidence to support the hearing officer's determination. Shaw, supra. The record wholly fails to show that plaintiff customarily and regularly supervised at least two fulltime employees. At best, plaintiff regularly exercised authority over one employee (Johnson) in certain aspects of Johnson's job (Johnson would deliver wine that plaintiff had presold). Plaintiff did not customarily and regularly supervise Rasmussen. Accordingly, the District Court decision is vacated, and the hearing officer's determination is reinstated. b-dna $&-iidg. Chief We concur: 7 fl J U S ~ ce
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