Alyeska Pipeline Service Co. v. Shook

978 P.2d 86, 1999 Alas. LEXIS 48, 1999 WL 219436
CourtAlaska Supreme Court
DecidedApril 16, 1999
DocketS-8015
StatusPublished
Cited by10 cases

This text of 978 P.2d 86 (Alyeska Pipeline Service Co. v. Shook) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alyeska Pipeline Service Co. v. Shook, 978 P.2d 86, 1999 Alas. LEXIS 48, 1999 WL 219436 (Ala. 1999).

Opinions

OPINION

EASTAUGH, Justice.

I. INTRODUCTION

Under Alaska law, an employee may not privately settle a wage and hour claim for a sum less than the damages required by the Alaska Wage and Hour Act (AWHA). In exchange for a large employment severance payment, Thomas Shook released his former employer, Alyeska Pipeline Service Company, “from any and all claims ... arising from his employment or as a result of this separation of employment.” When Shook later sued Alyeska claiming AWHA violations, Alyeska moved for summary judgment on the theory the severance payment fully offset, and thus extinguished, Shook’s AWHA claim. The superior court denied Alyeska’s motion. We reverse. We conclude that the release encompassed Shook’s claims, and that, because it substantially exceeded the maximum he could have recovered under the AWHA, the severance payment fully satisfied any potential AWHA award. It therefore required dismissal of his AWHA claim. We remand for entry of judgment for Alyeska.

II. FACTS AND PROCEEDINGS

Alyeska employed Shook from August 1982 until March 1995. From 1987 to 1995, Shook was a Senior Business System Analyst, classified by Alyeska as an exempt employee not eligible for overtime pay under the AWHA. The AWHA does not apply to “an individual employed in a bona fide executive, administrative, or professional capacity or in the capacity of an outside salesman or a salesman who is employed on a straight commission basis.”1

Alyeska terminated his employment in March 1995 as part of a company-wide reduction in force. Shook signed a document entitled “Separation Agreement and General Release,” and received a lump sum severance payment of $141,496.73 from Alyeska as part of his involuntary severance package.

In May 1995 Shook brought a class action complaint on behalf of himself and other current and former Alyeska employees, alleging that Alyeska had violated the overtime provisions of the AWHA. He contended that he and all of Alyeska’s present and former employees employed in an “executive, administrative, or professional capacity” had been improperly classified as exempt, and that they were entitled to back overtime pay, plus liquidated damages, penalties representing ninety days’ lost wages, and attorney’s fees.

The superior court granted class certification “only on the question of whether Alyes-ka employees subject to suspension without pay were properly classified as exempt.” Alyeska moved for summary judgment against Shook individually, assuming for purposes of its motion that Shook was correct on the merits of his AWHA claim. Alyeska introduced evidence of the general release Shook signed when he separated. Alyeska asserted that it was entitled to set off its lump sum severance payment against any recovery that Shook might obtain. Alyeska calculated that Shook’s maximum potential recovery from a successful AWHA case was about $71,000, including statutory liquidated [88]*88damages and prejudgment interest. Alyes-ka’s calculation made no allowance for an award of attorney’s fees. Reasoning that its severance payment of $141,496.73 exceeded Shook’s maximum potential AWHA recovery, Alyeska urged the court to dismiss Shook’s claim, and to give plaintiffs’ counsel thirty days to name a new class representative.

Shook did not argue that he could potentially recover more than $71,000 under the AWHA or that there was any genuine dispute about his maximum potential AWHA recovery. He instead argued that there were genuine fact disputes about the scope of the release and what part of the severance payment was intended to discharge AWHA claims.

The superior court denied Alyeska’s motion. It found that the release did not necessarily cover Shook’s AWHA claim, and that Alyeska was not clearly entitled to a setoff. It also found “no indication that either Shook or Alyeska contemplated that Shook had a potential claim for unpaid overtime wages.” We granted Alyeska’s petition for review of the denial of its summary judgment motion.

III. DISCUSSION

A. The Purpose of the Payment

The separation agreement Shook signed contains language that “releases and discharges Alyeska ... from any and all claims- ... arising from [Shook’s] employment.”2 Alyeska argues that the release covers Shook’s AWHA claim, because it is a claim arising from Shook’s employment.3 According to Alyeska, the release language is unambiguous; it argues that “Alyeska paid Plaintiff over $140,000 in return for his promise not to sue Alyeska over anything relating in any way to his employment.”

Shook maintains that, in construing the release, the court should consider extrinsic evidence of the parties’ intentions regarding the AWHA claim. In his superior court affidavit, Shook affined that he had not previously asserted any AWHA claims and had not discussed with Alyeska the waiver of such claims before he signed the agreement. He argues that a question of fact remains about whether he expected or intended to relinquish his AWHA claims. He also asserts that, because he and Alyeska could not have settled their AWHA claims without court approval, he would not have expected the release to cover them.

The question whether the release encompassed Shook’s AWHA claims is relevant to deciding whether Alyeska is entitled to offset any part of the severance payment against Shook’s AWHA claims. Alyeska does not argue that the release is an absolute bar to Shook’s claims.

[89]*89The superior court found no indication that the parties contemplated Shook’s possible AWHA claims, and found no reasonable relationship between the severance payment and Alyeska’s potential liability under the AWHA. The court concluded that the severance payment “was not paid to settle a specific overtime claim.”4

We interpret contracts so as to “give effect to the reasonable expectations of the parties.”5 We give effect to a broad release even if the parties did not specifically list all of their possible claims. For example, in Martech Construction Co. v. Ogden Environmental Services, Inc.,6 we noted the broad language of a release executed by an equipment supplier and subcontractor.7 The parties there purported to release each other “fully, finally, and completely from all liability for whatever damage, known or unknown, arising from or relating to the subject contract.” 8 We characterized the agreement as “a complete washing of the hands between the parties using as soap blatantly broad language to cover all possible causes of action.”9 We therefore found it irrelevant that, at the settlement negotiations, the parties had never discussed the equipment that became the subject of the dispute: “The broad language used implies that claims not specifically contemplated are settled.”10

Similarly, we give effect to the broad language of indemnity agreements, even as against the indemnitee’s own negligence.11 We have, however, refused to enforce indemnification agreements that would tend to promote a breach of duty to the public safety.12

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Neese v. LITHIA CHRYSLER JEEP OF ANCHORAGE
210 P.3d 1213 (Alaska Supreme Court, 2009)
Neese v. Lithia Chrysler Jeep of Anchorage, Inc.
210 P.3d 1213 (Alaska Supreme Court, 2009)
Industrial Commercial Electric, Inc. v. McLees
101 P.3d 593 (Alaska Supreme Court, 2004)
Barry v. University of Alaska
85 P.3d 1022 (Alaska Supreme Court, 2004)
Shook v. Alyeska Pipeline Service Co.
51 P.3d 935 (Alaska Supreme Court, 2002)
DeSalvo v. Bryant
42 P.3d 525 (Alaska Supreme Court, 2002)
Alyeska Pipeline Service Co. v. Shook
978 P.2d 86 (Alaska Supreme Court, 1999)

Cite This Page — Counsel Stack

Bluebook (online)
978 P.2d 86, 1999 Alas. LEXIS 48, 1999 WL 219436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alyeska-pipeline-service-co-v-shook-alaska-1999.