A group of firefighters working for the City of Billings, Montana filed a lawsuit under Montana’s state wage and hour law contending that they had been structurally underpaid by the City. At the core of the firefighters’ claim was that the City compensated them for only 2,080 hours a year rather than the 2,272 hours the firefighters worked each year while on a 24-on, 48-off schedule.
When the firefighters recovered back wages in the amount $3,075,590 plus attorneys’ fees of $625,000 in the trial court, the case was appealed to the Montana Supreme Court.
The Court not only upheld the basic judgment against the City, it also ruled that the amount of the penalty assessed against the City should be increased.
The dispute came down to the question of whether the firefighters should be treated as receiving annual or hourly wages. The collective bargaining agreement covering the firefighters contained the following pay formula:
“A. Annual base salary is equal to 2,080 hours x hourly base rate of pay listed on the attached salary schedule. Hourly base rate is base pay plus special certification pay.
“B. Regular payday will be every other Friday.”
The salary schedule attached to the contract set forth a base hourly salary. Another provision in the contract called for a form of 24-on, 48-off schedule that resulted in 2,272 hours of work per year, rather than the 2,080 hours that would be worked by an employee on a 40-hour week.
When the City paid the firefighters every other week, the City’s pay stubs reflected that they were paid for 40 hours per week, regardless of whether they worked more or less than 40 hours in that week. Although schedules were kept which would indicate the number of hours worked by the firefighters, the actual number of hours were not sent to the payroll department. This resulted in the firefighters being paid for only 2,080 hours each year, rather than the 2, 272 hours they actually worked.
The firefighters contended that they were hourly employees who should be paid for every single hour that they worked. The City rejoined that the collective bargaining agreement should be construed to guarantee the firefighters a base annual salary, and that the payment of that annual salary in the form of 26 bi-weekly installments did result in the firefighters being paid for all hours worked.
The Court sided with the firefighters. The Court held that “given that the contract specifically lists actual hourly wages, there is no basis for treating the contract as annual salary contract, as the City suggests. For example, a Firefighter I with one certification would have an hourly base rate of $12.7355. Thus, the annual salary would be $26,489.84. Dividing this number by the actual hours worked on the defined schedule would equate to only $11.66 an hour, more than a dollar less per hour than the agreement stated the firefighter was to receive. It is illogical to provide an actual hourly wage but then not pay for every hour worked, thus lowering the agreed-upon hourly wage.”
The firefighters argued that they were entitled to even more, citing a provision of the Montana constitution that established “a maximum period of eight hours” as “a regular day’s work.” The Court rejected the argument, citing a separate sentence in the same constitutional clause to the effect that “the Legislature may change this maximum period to promote the general welfare.” In the Court’s view, by enacting a statute that exempted employers who collectively bargained with their employees from the eight-hour rule, the Legislature had acted within its rights under the constitutional clause.
Kuhr v. City of Billings, 2007 WL 2320055 (Mont. 2007).
This article appears in the October 2007 issue