Labor Commissioner v. Mapes Hotel Corporation

505 P.2d 288 (1973)

LABOR COMMISSIONER of the State of Nevada, Appellant, v. MAPES HOTEL CORPORATION, Respondent.

No. 7021.

Supreme Court of Nevada.

January 15, 1973.

Rehearing Denied April 5, 1973.

Robert List, Atty. Gen., and Julien Smith, Deputy Atty. Gen., Carson City, Wilbur H. Sprinkel, Sp. Counsel, Reno, for appellant.

Hale & Belford and Gary R. Silverman, Reno, for respondent.

GUNDERSON, Justice:

As assignee of two hotel bellmen, pursuant to N.R.S. 607.170, the appellant Labor Commissioner sued respondent to recover the balance of wages allegedly earned at $1.60 per hour, penalties, and attorneys' fees. Respondent filed a "motion *289 to quash" service of process for "lack of jurisdiction over the subject matter," which the district court granted upon ascertaining that the assignor-bellmen's duties were sufficiently related to interstate commerce to come within the purview of the federal Fair Labor Standards Act of 1938, as amended (29 U.S.C. §§ 201-219, herein called "FLSA"). This appeal follows.

For certain affected employees, which the parties agree include the assignor-bellmen, the FLSA currently requires minimum wages of $1.60 per hour. § 206(b). However, the FLSA also affords an employer a limited and qualified right to claim credit against this hourly minimum, if an employee "customarily and regularly receives more than $20 a month in tips." § 203(m)(t). Hence, because the assignor-bellmen received tips, respondent paid them less than $1.60 per hour. That practice precipitated the instant action, which the district court evidently believed was outside its jurisdiction because the parties' rights are governed purely by the FLSA.

Although we agree the assignor-bellmen's rights in this case are controlled by the FLSA, and not by N.R.S. 608.160(1)(b) as appellant suggests, we do not agree that Nevada courts lack jurisdiction to enforce rights under the FLSA. Furthermore, appellant's complaint may be read to allege claims based on contract. Accordingly, we reverse.

1. Appellant contends respondent's right to credit for tips, granted by the FLSA, has been divested by N.R.S. 608.160(1)(b) which forbids an employer to "[a]pply as a credit toward the payment of the statutory minimum hourly wage any tips or gratuities bestowed upon his employees." Stats.Nev. 1971, ch. 582. However, it is unclear whether our legislature, by alluding to "the statutory minimum hourly wage," intended that N.R.S. 608.160(1)(b) would apply to wage statutes such as the FLSA that are enacted by other legislative bodies, or merely to wage minimums established in Nevada statutes. N.R.S. 608.250, Nevada's statute establishing a minimum wage for men, expressly excepts men whose minimum wages are established by the FLSA. Arguably, this suggests intent not to legislate on matters affecting such minimum wages, and there are reasons our legislature might make this decision.

For example, a state legislature might not wish to forbid crediting tips against a wage standard Congress may enlarge at any future time, expecting that tips will be credited against it. This is especially so because, as the United States Supreme Court has observed, the FLSA does not contemplate giving "the tipping employments an earnings-preference over the nonservice vocations," and a state legislature could wish to defer to this congressional policy. Cf. Williams v. Jacksonville Terminal Co., 315 U.S. 386, 388, 62 S. Ct. 659, 662, 86 L. Ed. 914 (1942).

In any event, since N.R.S. 608.160(1)(b) is a penal statute, it must be construed in respondent's favor.[1] Peck v. Woomack, 65 Nev. 184, 192 P.2d 874 (1948); Orr Ditch Co. v. Dist. Ct., 64 Nev. 138, 178 P.2d 558 (1947); Ex parte Davis, 33 Nev. 309, 110 P. 1131 (1910). "Penal statutes should be so clear as to leave no room for doubt as to the intention of the Legislature, and where a reasonable doubt does exist as to whether the person charged with a violation of its provisions is within a statute, that doubt must be resolved in favor of the individual." 33 Nev. at 318, 110 P. at 1135.

2. The FLSA expressly states that an action based on failure to pay minimum wages "may be maintained in any court of competent jurisdiction." § 216(b). Accordingly, it is uniformly held that state courts have jurisdiction concurrent with that of federal courts to determine claims *290 governed by the FLSA. Camfield v. West Texas Utilities Co., Tex.Civ.App., 170 S.W.2d 552 (Tex.Ct.Civ.App. 1942); Cunningham v. Davis, 203 Ark. 982, 159 S.W.2d 751 (1942); Tidewater Optical Co. v. Wittkamp, 179 Va. 545, 19 S.E.2d 897 (1942).

Reversed and remanded for further proceedings.

THOMPSON, C. J., and MOWBRAY, BATJER, and ZENOFF, JJ., concur.

[1] For violation of NRS 608.160, NRS 608.190(2) provides a penalty of up to $300, payable to the State, in addition to penalties NRS 608.040 makes collectible by employees who are not paid wages when due.