Dept. of Labor & Indus. v. Lanier Brugh

147 P.3d 588, 135 Wash. App. 808
CourtCourt of Appeals of Washington
DecidedAugust 21, 2006
Docket56192-8-I, 56821-3-I
StatusPublished
Cited by4 cases

This text of 147 P.3d 588 (Dept. of Labor & Indus. v. Lanier Brugh) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dept. of Labor & Indus. v. Lanier Brugh, 147 P.3d 588, 135 Wash. App. 808 (Wash. Ct. App. 2006).

Opinion

147 P.3d 588 (2006)

DEPARTMENT OF LABOR AND INDUSTRIES, Respondent,
v.
LANIER BRUGH, a foreign corporation; Skyline Mail Carriers, Inc., a foreign corporation, Appellants, and
Dill's Star Route, Inc., a foreign Corporation, Defendant.

Nos. 56192-8-I, 56821-3-I.

Court of Appeals of Washington, Division 1.

August 21, 2006.
Publication Ordered and Reconsideration Denied November 22, 2006.

*589 Amanda J. Goss, Attorney General Office, Seattle, WA, for Respondent.

Philip Albert Talmadge, Talmadge Law Group PLLC, Tukwila, WA, for Appellants.

GROSSE, J.

¶ 1 The question of whether federal law preempts state law is governed by the intent of Congress. Congressional intent to preempt state law may be found in three ways. First, Congress may express a clear intent to preempt state law. Second, the scheme of federal regulation may be sufficiently comprehensive to make reasonable the inference that Congress left no room for supplementary state regulation. Third, preemption will be found when there is an actual conflict between federal and state law where (1) compliance with both the federal and state law is physically impossible, or (2) the state law is an obstacle to the full purposes and objectives of Congress. None of these ways are present in the case before us. The decision of the trial court is affirmed.

FACTS

¶ 2 Skyline Mail Carriers, Inc. (Skyline) and Lanier Brugh (collectively the employers) are private employers who contracted to transport mail for the United States Postal Service (USPS) between regional mail centers.[1] In performing the contracts, the employer's truck driver employees work over 40 hours a week within Washington's boundaries. *590 Although the employers pay a straight wage, they do not pay these employees overtime pay for the hours over 40 per week. There is no dispute that the contract between the employers and USPS for mail hauling is governed by the Service Contract Act.[2] The SCA directs the United States Department of Labor to determine a minimum hourly wage for the work expected to be performed for each occupation under the contract.

¶ 3 The contract between the employers and USPS is extensive. The contract does not provide that the federal law is exclusive or expressly prohibit the application of state overtime laws. The contract does not specifically restrict the employers to a certain amount of wages to be paid to their truck drivers, so long as they pay at least the minimum hourly wage rate as determined by the Department of Labor. Under the contract, the employers are not relieved from an obligation to comply with local laws while performing work, rather, the contract requires them to comply with local law. The contract states in section H.12, the PERMITS AND RESPONSIBILITIES (Services) section:

The supplier is responsible, without additional expense to the Postal Service, for obtaining any necessary licenses and permits, and for complying with any applicable federal, state, and municipal laws, codes, and regulations in connection with the performance of the contract.

Further, the contract sets forth in section H.32(d)(1) that "[n]othing in this provision relieves the suppleir [sic] or any subcontractor of any other obligation under law or contract for the payment of a higher wage to any employee."

¶ 4 L & I determined that the employers must pay their drivers overtime for work over 40 hours a week within the state. One of the employers contacted a USPS contracting officer in Seattle, regarding a potential claim for increased compensation under the contract, or for an opinion as to whether the employers must pay overtime. Raymond K. Luke, a contracting officer with USPS, opined that under the SCA and the contract no overtime pay was required, but also noted in a letter to Skyline that

[n]otwithstanding this understanding of the statutory situation, [ (Luke's opinion that no overtime need be paid under the contract)], the Postal Service does not believe that it is in a position to opine authoritatively on the matter by means of a final decision. Washington State is entitled to its interpretation of its statute, and enforces that understanding by appropriate means. While the Postal Service may, at some appropriate stage, undertake to protect its interest, such intervention does not currently seem to be required. This is the case because nothing in the terms of your contract requires that you schedule or employ drivers so as to cause them to accrue service in excess of 40 hours per week.

The employers did not pay overtime because they believed they were not required to do so under the contract or under the opinion received from USPS. One of the employers also possessed a 1994 letter from a bureaucrat with the Department of Labor concerning the payment of overtime, although this letter was never before the trial court.[3]

¶ 5 L & I sued Skyline and Lanier Brugh alleging they failed to comply with the Washington State's Minimum Wage Act (MWA). Defendants Skyline and Lanier Brugh removed the case from superior court to federal court, arguing that the wage claims are preempted by the Service Contract Act (SCA).[4]

*591 ¶ 6 The federal court remanded the case back to superior court for a determination on the merits of the preemption defense. In denying removal from state court, the decision from the Federal District Court set forth that there is no complete preemption, and further stated that "there is no reason to suspect that Congress intended to occupy the entire regulatory field regarding wages and benefits provided to federally-contracted employees." The court indicated that the SCA "was created to provide wage and benefit protections to federally-contracted employees."

¶ 7 Once returned to King County Superior Court, L & I moved for summary judgment on the issues of liability. In a cross-motion for summary judgment the employers raised the defense of federal preemption. The trial court held that the federal law does not preempt the application of Washington's overtime law and granted L & I's motion, while denying that of the employers. This resolved the initial issue of liability. The employers moved unsuccessfully for discretionary review. The issue of the amount of overtime due to the truck drivers was resolved by the parties without further litigation. Following entry of judgments against both employers, they appeal the liability issue, arguing federal preemption.

ANALYSIS

¶ 8 The primary issue presented in this case is whether the passive regulation of wages and hours worked in the federal Service Contract Act (SCA)[5] preempts the overtime wage provisions of Washington's Minimum Wage Act (MWA).[6]

¶ 9 Federal preemption is a defense that may be asserted in actions filed in state court.[7] Whether federal law preempts state law is governed by the intent of Congress.[8] As noted in Department of Labor & Indus. v. Common Carriers, Inc.,[9]

Congressional intent to preempt state law may be found in three ways. First, Congress may express a clear intent to preempt state law. E.g., Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977). Second, the "scheme of federal regulation [may be] sufficiently comprehensive to make reasonable the inference that Congress `left no room' for supplementary state regulation." [California Fed. Sav.

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Cite This Page — Counsel Stack

Bluebook (online)
147 P.3d 588, 135 Wash. App. 808, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dept-of-labor-indus-v-lanier-brugh-washctapp-2006.