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In re Wage Claim of Mays

Supreme Court of Montana

September 17, 2019

IN THE MATTER OF THE WAGE CLAIM OF: ELIZABETH M. MAYS, Claimant and Appellant, and SAM'S INC., a Montana corporation d/b/a SAGEBRUSH SAM'S, Respondent and Appellee.

          Submitted on Briefs: August 7, 2019

          APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. BDV-18-356 Honorable Elizabeth A. Best, Presiding Judge.

          For Appellant: Steven T. Potts, Steven T. Potts, PLLC, Great Falls, Montana

          For Appellee: Frank J. Joseph, Frank J. Joseph, P.C., Attorney at Law, Butte, Montana

          OPINION

          Jim Rice Justice.

         ¶1 Elizabeth Mays (Mays) appeals an order entered by the Montana Eighth Judicial District Court, Cascade County, on judicial review, which affirmed in part, reversed in part, and remanded a decision by the Department of Labor and Industry's Office of Administrative Hearings (Agency) on Mays' wage claim against Sam's Inc., d/b/a Sagebrush Sam's (Sam's). We affirm, and restate the issues as follows:

1. Is the District Court's order, which included a remand to the Agency, a final judgment for purposes of appeal?
2. Did the District Court err by affirming the Agency's determination of the terms of Mays' employment?
3. Did the District Court err by affirming the Agency's determination that Sam's was not obligated to reimburse Mays for fees?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶2 Sam's engaged Mays to work as an exotic dancer pursuant to an Independent Contractor Agreement (ICA) the parties executed on July 25, 2013. Under the ICA, Mays was designated an independent contractor, and she paid Sam's $15 per night for stage rental fees and $4 or $5 for private dance room fees. Mays was paid nothing by Sam's, but was permitted under the ICA "to keep payments/tips which are received directly from Sam's clientele." In a paragraph entitled, "Term," the ICA provided: "Because the Stage is rented by the shift, this Agreement contemplates that the parties may agree to which day(s) the Stage and Contractor will be available. Thus, the specific days for which this contract will apply will be orally agreed to later by the parties."

         ¶3 Mays was engaged at Sam's intermittently, working for brief periods and then leaving to work elsewhere or pursue other activities. The time period at issue pertained to dates Mays worked at Sam's in 2015 and 2016. After working a number of stints in the summer of 2015, Mays went to Wisconsin and resided there from August 23, 2015 through March 7, 2016, attending school and working at a local exotic dance club. While Mays was in Wisconsin, Sam's contacted her several times regarding work, but Mays declined each time. Mays returned to work at Sam's for a brief period starting March 8, 2016, but Sam's terminated the relationship on March 14, 2016, due to a dispute between the parties.

         ¶4 On June 7, 2016, Mays filed a wage claim with the Montana Department of Labor and Industry, alleging she was misclassified as an independent contractor and was owed employment wages for hours she worked, claiming minimum wage. The matter was referred to the Independent Contractor Central Unit (ICCU) to determine the employment relationship between Mays and Sam's. Finding Mays did not satisfy the criteria to be an independent contractor, the ICCU determined Mays was an employee and transferred the matter to the Wage and Hour Unit to determine whether Mays was owed wages. In turn, the Wage and Hour Unit determined that Mays was initially employed by Sam's for several finite periods, which ended on August 22, 2015, and that she was separately employed for another time period between March 8, 2016 and March 14, 2016. Due to the 180-day limitation for filing wage claims under § 39-3-207, MCA, Mays was eligible to claim only wages for the work performed during this final period, as the time for filing had lapsed for the earlier, separate, periods of employment. Accordingly, the Wage and Hour Unit determined that Sam's owed Mays $33.43, computed as $8.05 per hour, times 8.5 hours, minus $60 private dance fees Mays had received, plus $25 in improper withholdings. Mays pursued a contested case hearing before the Agency, after which the Hearing Examiner likewise determined Mays was owed $33.43 in wages, reasoning with regard to her claim for earlier time periods that she "left her employment with Sam's in 2015, and her return in 2016 cannot be used to tie the present claim with her previous work in 2015."

         ¶5 Mays sought judicial review, and the District Court determined that the Agency's findings regarding Mays' employment periods were not clearly erroneous; that the ICA did require a different determination about Mays' periods of employment; and that Sam's was not obligated to reimburse Mays' fees beyond the statutory limitation period. However, the District Court reversed the Agency's determination that Sam's was entitled to an offset for Mays' tips, concluding the exclusion for tips under § 39-3-402(7)(b), MCA, applied because Sam's sold food and beverages. The District Court also reversed the Agency's determination that Sam's was not required to pay a penalty under § 39-3-206(1), MCA, finding that Sam's attempt to "circumvent applicable wage law" was unlawful under Smith v. TYAD, Inc., 2009 MT 180, ¶ 28, 351 Mont. 12, 209 P.3d 233, and that the language imposing a penalty under ยง 39-3-206(1), MCA, was mandatory. Sam's does not cross-appeal these issues, and therefore we do not address them. The ...


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