                                        No. 12495

          I N THE SUPREME COURT O THE STATE OF M N A A
                                 F              OTN




STATE O MONTANA, e x r e 1 WILMER C. NEISS
             F
and HELEN M. NETSS, Husband and Wife,
i n d i v i d u a l l y and d / b / a t h e C a r l i n H o t e l ,

                                Petitioners,



DISTRICT COURT OF THE THIRTEENTH JUDICIAL
DISTRICT O TIIE STATE O M N A A and t h e
                 F                  F OTN
                               .
HONORABLE ROBERT H WI LSON , Judge t h e r e o f ,
and SIDNEY T. SMITH, Commissioner o f Labor
and I n d u s t r y and HONORABLE ROBERT L. WOODAHL,
A t t o r n e y G e n e r a l o f Montana.

                                Respondents.




ORIGINAL PROCEEDING:


Counsel o f Record:

      For P e t i t i o n e r s :

              B e r g e r , Anderson, S i n c l a i r and Murphy, B i l l i n g s , Montana
              Arnold A. B e r g e r a r g u e d , B i l l i n g s , Montana

      F o r Respondents:

              Honorable R o b e r t L. Woodahl, A t t o r n e y G e n e r a l , H e l e n a ,
                Montana
              J o n a t h a n B. Smith a r g u e d , A s s i s t a n t A t t o r n e y G e n e r a l ,
                Helena, Montana
              Harold F. Hanser, County A t t o r n e y , B i l l i n g s , Montana
              E r n e s t F. B o s c h e r t argued, B i l l i n g s , Montana.



                                                     Submitted:        May 22, 1973

                                                        Decided :     JUL 10 1973
Filed:      JUL I 0 1973
Mr. Justice John Conway Harrison delivered the Opinion of the
Court,

     This is an original proceeding brought by petitioners Wilmer
C. and Helen M. Neiss, husband and wife, seeking a writ of super-
visory control directed to the respondents to appear and show
cause why petitionersf motion for summary judgment in the district
court should not be granted, The district court of the thirteenth
judicial district, Yellowstone County, was the original respondent.
The Montana Commissioner of Labor and Industry and the Montana
Attorney General were made parties, pursuant to an order of this
Court.
     The dispute concerns a complaint received by the Montana
Commissioner of Labor and Industry, hereinafter referred to as the
Commissioner, regarding alleged failure of petitioners to pay the
minimum wageas prescribed by statute.   Petitioners operate and do
business as the Carlin Hotel in Billings, Montana, In conducting
such business, petitioners hire desk clerks and room maintenance
employees.
     Involved here are four categories of employees:
     1. Two casual employees whose last names are unknown to the
State of Montana and to petitioners; they are unidentifiable.
     2.   Seven employees who did not assign any claim for wages
to the Commissioner, but settled their own claims with petitioners.
     3. One employee who made complaint to the Commissioner and
duly assigned such claim.
     4,   One employee who asked the county attorney to represent
her in the action,
     Following the Commissioner's receipt of the one complaint
in September 1971, he conducted an audit of petitonersf books.
The audit revealed petitioners had, in fact, failed to pay the
minimum wage to certain employees.   Subsequently the Commissioner
ordered petitioners to pay the former employees the difference
between the amount actually paid and the minimum wage.   Petitioners
did not comply.
                            - 2 -
     The Gommissioner then requested the Yellowstone County
Attorney to institute action against petitioners.     Petitioners
discovered that only one claim of the several mentioned in the
complaint was assigned to the Commissioner.      Petitioners then com-
promised   certain of the claims with some of their former employees
for amounts less than the amounts due under the minimum wage statute.
In answering the Commissioner's complaint, petitioners alleged
satisfaction of the claims, having procured releases from some
former employees.     Petitioners moved the district court for summary
judgment on the basis of the releases obtained from those certain
employees, The district court denied petitioners' motion for sum-
mary judgment and petitioners now seek a writ of supervisory con-
trol in this Court.
     We accept jurisdiction and deny petitioners' request for a
supervisory writ.     The basic issue is whether minimum wage claims
may be compromised by petitioners and then established as a defense
to proceedings seeking enforcement of minimum wage laws.     Our
answer is in the negative.
     Section 41-2306, R.C.M.    1947, provides that all actions
regarding enforcement of minimum wages are commenced in accordance
with sections 41-1301 through 41-1324, R.C.M,    1947, Two of those
sections are significant here.     Section 41-1314.1, R,C,M. 1947,
authorizes the commissioner of labor to conduct all operations
necessary to determine whether any statutory minimum wage provi-
sions have been violated,
                                         ,p'g*
                                        -.
                               Section 41- 3 -2, R.C.M. 1947, provides
in pertinent part:
     It
      Whenever the commissioner determines that one or
     more employees have claims for unpaid wages, he shall,
     upon the written request of the employee, take an
     assignment of the claim in trust for such employee,
     and may maintain any proceeding appropriate to enforce
     the claim, including liquidated damages pursuant to this
     act. With the written consent of the assignor, the
     commissioner may settle or adjust any claim assigned
     pursuant to this section," (Emphasis added)
     It is petitioners' position that if the Commissioner, with
the written consent of the employee, can settle and adjust any
assigned claim, as the statute authorizes, then the individual may
s e t t l e and a d j u s t h i s own c l a i m i n absence of any assignment,
p e t i t i o n e r s ' argument i s untenable.             The Commissioner has t h e
a u t h o r i t y t o compromise c l a i m s because he does so n o t o n l y f o r t h e
b e s t i n t e r e s t of t h e c l a i m a n t , b u t f o r t h e p u b l i c a s w e l l .      That
s i t u a t i o n i s q u i t e a p a r t from t h e i n s t a n c e where t h e p a r t y f a i l i n g

t o pay t h e minimum wage a t t e m p t s t o compromise t h e c l a i m a n t ' s
demand.       The b e s t i n t e r e s t of n e i t h e r t h e p u b l i c nor t h e claimant
i s pursued by t h e p a r t y a t f a u l t ; a compromise sought by t h e p a r t y
a t f a u l t s e r v e s only t h a t p a r t y .
        I n c o n s i d e r i n g t h e purpose of t h e F a i r Labor Standards Act,
t h e United S t a t e s Court of Appeals, Ninth C i r c u i t , i n Wirtz v.
Malthor, I n c . , 391 F.2d 1, 3 , sai.d:
        " ~ t   must b e remembered t h a t r e s t r a i n i n g a p p e l l e e s
        from withholding t h e minimum wages and overtime
        compensation i s meant t o v i n d i c a t e a p u b l i c , r a t h e r
        than a p r i v a t e r i g h t , and t h a t t h e withholding of
        t h e money due i s considered a i c o n t i n u i n g p u b l i c
        o f f e n s e . r I1
The c o u r t then went on t o n o t e t h a t t h e purpose of enforcement
procedures i s twofold:                (1) t o i n c r e a s e t h e e f f e c t i v e n e s s of
enforcement by d e p r i v i n g t h e v i o l a t o r of h i s g a i n ; and (2) t o
p r o t e c t employers who do comply                w i t h t h e Act from having t o
compete unfavorably w i t h t h o s e who do n o t comply.                         W e find these
purposes analogous t o t h e d e c l a r a t i o n of p o l i c y embodied i n
s e c t i o n 41-2301, R.C,M,          1947,
       P e t i t i o n e r s urge t h a t t h e Commissioner's f a i l u r e t o o b t a i n
assignments from a l l t h e c l a i m a n t s proves f a t a l t o t h e ~ o r n m i s s i o n e r ' s
a u t h o r i t y t o a c t on t h e c l a i m a n t s ' b e h e l f and t h a t t h o s e nonassigned
c l a i m s may b e s e t t l e d by t h e c l a i m a n t s themselves,             Again, we do
not agree.          This i s a f i r s t impression c a s e b e f o r e t h i s Court,
I n t h e f u t u r e t h i s problem can be avoided if t h e Commissioner
o b t a i n s assignments from a l l c l a i m a n t s .
        However, s i n c e we a r e d e a l i n g w i t h a p u b l i c r i g h t , p u b l i c
p o l i c y demands the minimum wage s h a l l be paid.                       Minimum wage pro-
v i s i o n s e x i s t f o r t h e b e n e f i t of t h e whole p u b l i c and a c l a i m a n t
of h i s own accord may n o t b a r g a i n away h i s s t a t u t o r y minimum wage.
 I t i s elementary t h a t a law e s t a b l i s h e d f o r a p u b l i c r e a s o n
 cannot be compromised by p r i v a t e agreement,                          Section 49-105, R.C.M.
 1947.
         A s concerns t h e f i r s t c a t e g o r y of employees, l i s t e d h e r e t o -
 f o r e , p e t i t i o n e r s (employers) complied w i t h t h e p r a y e r of t h e
 o r i g i n a l complaint and d e p o s i t e d t h e amount due t h o s e u n i d e n t i f i a b l e
 employees w i t h t h e d i s t r i c t c o u r t .        Having f u l l y complied w i t h t h e
 p r a y e r of t h e s t a t e ' s complaint, t h e r e i s no p e n a l t y o r f o r f e i t u r e
 owing by p e t i t i o n e r s .
         A s concerns c a t e g o r y 2 , t h o s e who s e t t l e d t h e i r c l a i m s f o r
 l e s s than t h e minimum wage, we d i r e c t t h a t t h e amount owing between
 t h e s e t t l e m e n t made and t h e minimum wage b e paid i n t o d i s t r i c t
 c o u r t t o be paid over t o t h o s e employees.                    These employees having
 been r e p r e s e n t e d by t h e county a t t o r n e y , we f i n d t h e p r o v i s i o n s
 f o r a t t o r n e y f e e s and c o s t s provided f o r i n s e c t i o n 41-1322, R.C,M.
 1947, a r e n o t a p p l i c a b l e .     Under t h e circumstances h e r e , liqui--
dated damages a r e l i k e w i s e n o t a p p l i c a b l e .
         A s concerns c a t e g o r y 3 and c a t e g o r y 4 , t h e employees who
 brought a c t i o n e i t h e r through t h e Commissioner o r county a t t o r n e y ,
 p e t i t i o n e r s h e r e i n have a s s e r t e d a counterclaim which must be
 disposed of by t h e d i s t r i c t c o u r t ,
         p e t i t i o n e r s ' r e q u e s t f o r a w r i t of s u p e r v i s o r y c o n t r o l i-s
 denied on t h e m e r i t s .        The cause i s remanded t o t h e d i s t r i c t c o u r t
 f o r whatever f u r t h e r a c t i o n i s n e c e s s a r y , which a c t i o n s h a l l be
 c o n s i s t e n t w i t h t h e d i r e c t i o n s provided h e r e i n .
                                             C \ /



       Chief J u s t i c e
Mr, Justice Wesley Castles dissenting:
     I dissent. The fact statement in the majority opinion is
not complete, The complaint filed by the Commissioner of Labor
sought payment of underpaid wages, a bond or a cessation of
business, Defendants complied by settling the claims not repre-
sented by the Commissioner and by depositing in the district
court the amounts due two casual employees neither party was able
to find.
     A.s to two claimants or employees, one was represented by
the Commissioner after an assignment; the other merely asked the
county attorney to represent her.    As to these two claimants,
the defendants filed counterclaims.   The validity and good faith
of the counterclaims we should accept as true at this stage.
Then and only then, did the Commissioner, without authority as
to part of the claimants under the statute, assert liquidated
damages.
     Keep in mind here that we are being asked to accept juris-
diction by way of supervisory control, We accept jurisdiction
but deny petitioners' request for a supervisory writ and then
go on to rule on the merits, We have ruled that there is no
defense.
     Montana statutes state plainly that the Commissioner shall
take an assignment in trust.   With the written consent of the
assignor, he may settle or adjust.    Then,it follows, under our
statute, the beneficiary or claimant can settle for himself,
     I dissent to the ruling as made here.   The majority opinion
has at least recognized that no penalties should apply, With
this, I agree, I would grant the writ,

                                                             *.

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                                         Associate Justice
