CARDINAL DODGE, INC. V. JOSEPH NORSWORTHY SECRETARY KENTUCKY LABOR CABINET
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RENDERED: June 5, 1998; 10:00 a.m.
NOT TO BE PUBLISHED
NO. 97-CA-0775-MR
CARDINAL DODGE, INC.
V.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE DANIEL A. SCHNEIDER, JUDGE
ACTION NO. 95-CI-7104
JOSEPH NORSWORTHY
SECRETARY KENTUCKY
LABOR CABINET
APPELLEE
OPINION
AFFIRMING
* * * * * * * *
BEFORE:
GUDGEL, CHIEF JUDGE; GARDNER and SCHRODER, Judges.
GARDNER, JUDGE:
Cardinal Dodge, Inc. (Cardinal) appeals from an
opinion and order of the Jefferson Circuit court affirming the
findings of fact, conclusions of law, and final order of the
Kentucky Labor Cabinet (the Cabinet).
We affirm the opinion and
order of the Jefferson Circuit Court.
Having closely studied the record, the law, and the
arguments of counsel, it is our conclusion that we cannot improve
upon the well-written opinion from which Cardinal now appeals.
Rather than parrot the language of the lower court by way of
separate opinion, we adopt the opinion of the Jefferson Circuit
Court as that of this Court.
The Jefferson Circuit Court stated in
relevant part as follows:
BACKGROUND SUMMARY
Cardinal is an automobile dealership
located
at
5311
Dixie
Highway,
Louisville, Kentucky.
An employee of
Cardinal filed a wage and hour complaint
with the Cabinet.
William Gibson, an
investigator with the Cabinet, conducted
an audit and found alleged violations of
KRS 337.050, the seventh day overtime
statute, and KRS 337.275, the minimum
wage statute.
A hearing on the matter was held on June
28, 1995.
A hearing officer with the
Cabinet
issued
Findings
of
Fact,
Conclusions of Law and Final Order
('Final Order') on December 1, 1995. The
Final Order assessed back wages of
$8,433.23 for unpaid statutory minimum
wages for the period of January 1, 1991
through June 8, 1994, and $21,778.84 in
seventh day overtime wages for the same
time period.
A $100 penalty was also
assessed by the Cabinet.
On December 20, 1995, Cardinal filed a
petition for judicial review of the
December 1, 1995 Final Order. A certified
copy of the record before the Cabinet was
filed on January 2, 1996.
A briefing
schedule was set on May 15, 1996.
Cardinal filed its memorandum on June 3,
1996. The Cabinet filed its memorandum
on July 2, 1996.
OPINION
The scope of judicial review of the
Cabinet's Final Order is found in KRS
337.310, which in subsection (2), (prior
to
the
statute's
1996
amendment),
specifically limited said review to
determining whether or not:
(a)
The secretary or director acted
without or in excess of his powers;
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(b)
The order or decision was procured
by fraud;
(c)
The order or decision is not in
conformity to the provisions of
KRS 337.020 to 337.405, and
(d)
If findings of fact are in issue,
whether they support the order or
decision.
Cardinal's first argument is that the
Cabinet erred by assessing seventh day
overtime pay against it since car
salesmen are exempt from KRS 337.050.
Cardinal argues that the language of said
statute exempts professions licensed
under the laws of Kentucky, and Kentucky
law mandates that car salesmen obtain a
license (KRS 190.030).
The Cabinet argues that KRS 337.050
clearly
only
exempts
stenographers,
bookkeepers, or technical assistants of
licensed professions, and car salesmen do
not fit within said category.
KRS 337.050, reads in relevant part as
follows:
(1) Any employer who permits
any employee to work seven days
in any one (1) workweek shall
pay him at the rate of time and
a half for the time worked on
the seventh day....
(2) (a) Subsection (1) shall
not apply in any case in which
the employee is not permitted
to work more than forty (40)
hours during the workweek....
(b) Subsection (1) shall
not
apply
to
telephone
exchanges having less than five
hundred (500) subscribers, nor
to stenographers, bookkeepers,
or technical assistants of
professions such as doctors,
accountants, lawyers, and other
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professions licensed under the
laws of this state, nor to any
employees
subject
to
the
Federal Railway Labor Act and
seamen or persons engaged in
operating boats or other water
transportation facilities upon
navigable
streams,
nor
to
persons
engaged
in
icing
railroad cars, not to common
carriers under the supervision
of the Department of Vehicle
Regulation. (Emphasis added).
The interpretation of a statute is a
matter of law. White v. McAllister, Ky.,
443 S.W.2d 541 (1969).
Statutory
construction and interpretation require
that credence be given to the language
used and that it be given its ordinary
meaning. Young v. Board of Education of
Graves County, Ky. App., 661 S.W.2d 787
(1983).
Based upon the clear language of KRS
337.050(2)(b), the Court finds as a
matter of law that the exclusion at issue
is limited to stenographers, bookkeepers,
or technical assistants of licensed
professions.
Said exclusion cannot be
construed to encompass the licensed
profession itself as argued by Cardinal.
Such an interpretation would differ from
the stated language of the statute.
A
court may not interpret a statute at a
variance with its stated language. Layne
v. Newburg, Ky., 841 S.W.2d 181 (1992).
Accordingly, as car salesmen are not
exempt from the provisions of KRS
337.050, the Cabinet did not err in
assessing
seventh
day
overtime
pay
against Cardinal.
Cardinal also alleges that the method of
calculation used by the Cabinet was
inappropriate to determine the amount
Cardinal owes in seventh day overtime
pay.
Cardinal argues that the rate
should have been based on a minimum wage
rate (i.e., $6.37 per hour) without
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regard to actual earnings. The Cabinet
based its rate upon the employees' actual
weekly earnings including commissions.
At the administrative hearing, William
Gibson,
the
Cabinet's
investigator,
testified that he used the same formula
he has always used in seventh day
overtime cases (Hearing Transcript 'H.T.'
at 28-29). Gibson stated that it was the
Cabinet's practice and policy to use said
formula for any type of overtime pay,
based upon 803 KAR 1:060 (H.T. at 29).
Cardinal argues that 803 KAR 1:060,
however, only mentions overtime pay under
KRS 337.285 (the statute providing for
time and a half for employment in excess
of forty hours).
As stated in Hagan v. Farris, Ky., 807
S.W.2d 488 (1991), '[a] construction of a
law or regulation by officers of any
agency continued without interruption for
a long period of time is entitled to
controlling weight.'
Given that the
Cabinet's method of calculating seventh
day overtime pay is one of long standing,
it is entitled to substantial deference.
As Cardinal has not offered any basis to
show that said method is unreasonable,
the Court will not substitute the
Cardinal's method for the Cabinet's
method.
Cardinal further argues that it is exempt
from the minimum wage provisions of KRS
337.275, since outdoor salesmen are
excluded therefrom via KRS 337.010 and
its car salesmen qualify as outdoor
salesmen under the definition in 803 KAR
1:070 § 5. Cardinal cites to an Attorney
General Opinion dated October 30, 1974
(OAG 74-777), which contends that car
salesmen are excluded from the minimum
wage requirements since the Cabinet
considers them to be outside salesmen,
even though some sales are consummated in
the building.
The Cabinet argues that Cardinal's car
salesmen do not fit within the definition
of outdoor salesmen in 803 KAR 1:070 § 5
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and thus, they are not covered by the
outdoor salesmen exemption category. The
Cabinet also argues that OAG 74-777 is
advisory only and has been superseded by
the subsequently enacted administrative
regulation.
The Court agrees with the Cabinet that
OAG 74-777 is not controlling in these
circumstances.
See Commonwealth v.
Tarter, Ky. App., 802 S.W.2d 944 (1990)
('Opinions of the Attorney General are
merely his interpretation of the law, not
the law itself.') and Kennard v. Bracken
County Library Board of Trustees, Ky.
App., 887 S.W.2d 363 (1994) (courts are
not
bound
by
an
Attorney
General
opinion.)
KRS 337.275(1) requires every employer to
pay its employees a minimum wage, which
is currently the sum of $4.25 per hour.
KRS 337.010(2)(a), however, defines the
term 'employee' as used in KRS 337.275,
and subsection (2) of KRS 337.010 (2)(a)
excludes outside salesmen from the term
'employee.'
Section 5 of 803 KAR 1:070, in relevant
part, explains the meaning of the term
'outside salesmen' to be a person:
(1) Who is employed for the
purpose
of
and
who
is
customarily
and
regularly
engaged
away
from
his
employer's place or places of
business in (a) making sales,
which shall mean the transfer
of title to both tangible and
intangible property;...
The Cabinet's Final Order determined that
the salesmen of Cardinal Dodge were not
outdoor salesmen based upon the following
findings and conclusions at pp.7 and 8
thereof;
As previously determined in
this
decision,
Cardinal's
salespersons conducted sales
primarily on the lot and all
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documents
required
for
completion
of
sales
were
completed
on
Cardinal's
business premises. Even though
salespersons were encouraged to
prospect for sales off the lot
and vehicles were driven and
show [sic] off the lot, the
sales
employees
were
not
employed for the purpose of
customarily
and
regularly
engaging in sales away from
Cardinal's business.
Moreover,
the
regulation
requires that outside salesmen
be engaged in 'making sales'
which means the transfer of
title.
The
evidence
demonstrates that all title
transfers were completed on
Cardinal's business premises.
Accordingly, it is concluded
that Cardinal's salespersons
were
not
outside
salesmen
with[in] the meaning of KRS
337.010(2) (a) 2 and were
therefore
employees
covered
under
the
minimum
wage
requirements of KRS 337.275.
Cardinal argues that three witnesses
(i.e., Terry Downs, Winston Pittman and
Mary Marlene Goodman) testified at the
administrative hearing that salesmen were
allowed to and did, in fact, make sales
off the facility on a regular and
customary basis.
Terry Downs testified that he was a
salesman at Cardinal from July of 1991
through November of 1994 (H.T. at 77).
He testified that his time spent at work
was on the Cardinal lot (H.T. at 85). He
further testified that he was encouraged
to prospect for sales at other places
besides the Cardinal lot, but closing a
deal (i.e., to sign the papers) was done
on the lot (H.T. at 85-86).
Winston Pittman testified that he was the
President of Cardinal (H.T. at 98). He
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stated that it was a regular and
customary thing for his top salesmen to
go out and get customers from other
places (H.t. at 111-112). He also stated
that Cardinal sold a lot of cars that
were not sold at the lot (H.T. at 111).
However, he explained that this was
arriving at a mutual agreement, not the
signing of the papers (H.T. at 112).
Mary Marlene Goodman testified that she
was the financial controller/secretarytreasurer for Cardinal (H.T. at 115).
She testified that some of Cardinal's top
salesmen close some of their sales off
the premises of Cardinal (H.T. at 122).
Two other people testified at the hearing
on this subject.
Ernest Amburgey, a
witness for the Cabinet, testified that
he had been a salesman for Cardinal for
over a year (H.T. at 47). He stated that
they sold there at the Cardinal lot by
either telephoning prospective customers
or catching customers on the lot (H.T. at
61), and the lot was where you had to
make your money and where all the cars
were sold (H.T. at 61-62).
Earl Conrad, also a witness for the
Cabinet, testified that he worked as a
salesman for Cardinal during the 1993
year (H.T. at 90).
He stated that he
worked as a salesman on the lot (H.T. at
93) and spent 'pretty much 100 percent'
of an average workday on the Cardinal lot
(H.t. at 94).
'The rule in Kentucky is that if there is
substantial evidence in the record to
support
an
agency's
findings,
the
findings will be upheld, even though
there may be conflicting evidence in the
record.'
Kentucky Commission on Human
Rights v. Fraser, Ky., 625 S.W.2d 852
(1981). In Commonwealth, Department of
Education v. Commonwealth [of Kentucky,
Kentucky
Unemployment
Insurance
Commission], Ky. App., 798 S.W.2d 464
(1990), the court stated that '[e]vidence
is substantial if when taken alone or in
the light of all the evidence, it has
-8-
sufficient probative value to induce
conviction in the minds of reasonable
persons.'
Based upon the testimony of Downs,
Amburgey,
and
Conrad,
there
was
substantial evidence to support the
Cabinet's
finding
that
Cardinal's
salesmen conducted sales primarily on the
lot.
Also, there was substantial
evidence based upon the testimony of
Downs
and
Pittman
to
support
the
Cabinet's
finding
that
all
title
transfers were completed on Cardinal's
business premises.
As 803 KAR 1:070 § 5 requires that
outdoor salesmen be engaged in sales,
which are defined as the transfer of
title, away from the business premises,
the Cabinet did not err in concluding
that Cardinal's salesmen are not outside
salesmen within the exemption of KRS
337.010(2)(a)(2), and thus, the minimum
wage provisions of KRS 337.275 apply.
Having concluded that the lower court properly affirmed
the order of the Cabinet, we find no basis for tampering with the
opinion and order from which Cardinal appeals.
For the foregoing
reasons, the opinion and order of the Jefferson Circuit Court are
affirmed.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
K. Tracy Rigor
Louisville, Kentucky
Stephen E. Waltrip
Frankfort, Kentucky
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