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Blake v. Classic Alaska Trading/Big Ray's Alaska, Inc.

United States District Court, D. Alaska

August 27, 2018




         Pursuant to the request of the defendant in this case, the Court has considered whether to exercise its discretion to certify a question of Alaska state law to the Alaska Supreme Court under Alaska Appellate Rule 407(a). Under this Rule, the Court may certify to the Alaska Supreme Court a question of state law “which may be determinative of the cause then pending in [this Court] and as to which it appears to [the Court] there is no controlling precedent in the decisions of the supreme court of this state.”[1] “The decision to certify a question to a state supreme court rests in the ‘sound discretion' of the district court.”[2]

         As explained herein, the Court concludes that the standard for certification is satisfied here with respect to the question of what is the proper burden of proof that applies to establishing an exemption from overtime under the Alaska Wage and Hour Act, AS 23.10.50-150.


         Catherine Scalf is a former employee of Classic Alaska Trading/Big Ray's, Inc. who filed a claim against the company for violations of federal and state labor laws related to her time working at the company's Big Ray's stores in Fairbanks, Alaska.[3] She contends she was not paid overtime wages as required under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”), and the Alaska Wage and Hour Act, AS 23.10.50- 150 (“AWHA”). The Court recently denied the parties' cross motions for summary judgment as to Catherine Scalf's claims. Trial in Ms. Scalf's case has not yet been scheduled. Ms. Scalf's claims against Classic turn on whether Ms. Scalf is considered a non-exempt employee who is entitled to overtime wages, or an exempt employee to whom Classic was not obligated to pay overtime under either the FLSA or the AWHA.

         The FLSA requires that employers pay overtime wages to employees who work more than 40 hours per week.[4] However, “[e]mployees who are employed in executive, administrative, or professional capacities are exempt from that overtime requirement.”[5]Regulations define whether an employee is “employed in a bona fide executive, administrative, or professional capacity” so as to be exempt under 29 U.S.C. § 213(a)(1). The AWHA, like the FLSA, requires employers to pay overtime wages, equal to one and one-half times the regular rate, to employees who work more than 40 hours per week.[6]Like the FLSA, the AWHA recognizes exemptions to the overtime requirement for individuals employed “in a bona fide executive, administrative, or professional capacity.”[7]Furthermore, the AWHA adopts the federal definitions for the exemptions.[8] Accordingly, the Alaska Supreme Court has held that when determining whether an employee is exempt under the AWHA, “trial courts should . . . . apply the ‘primary duty test' of [DOL regulations].”[9]

         In determining exemptions under the FLSA, courts in the Ninth Circuit apply a preponderance of the evidence standard.[10] However, the standard of proof that the Alaska Supreme Court would apply to exemption claims under the AWHA is not entirely clear at this time. Therefore, this Court respectfully requests that the Alaska Supreme Court address the applicable standard of proof for an exemption to apply under the AWHA.

         In 1993, the Alaska Supreme Court in Dayhoff v. Temsco Helicopters, Inc. adopted a “beyond a reasonable doubt” standard for establishing an exemption under Alaska law.[11] Specifically, the Court held, “If there is a reasonable doubt as to whether an employee meets the criteria for exemption, the employee should be ruled non-exempt.”[12]Again in 2004, the Court held in Fred Meyer of Alaska, Inc. v. Bailey that “[t]he burden is on the employer to prove beyond a reasonable doubt that the employee is exempt.”[13]

         Shortly thereafter, in 2005, the Alaska Legislature amended the AWHA to mirror the FLSA and its accompanying regulations with regard to the exemptions for executive, administrative, and professional employees.[14] The Alaska Supreme Court subsequently appeared to question whether exemptions under the AWHA should continue to require proof beyond a reasonable doubt. In Resurrection Bay Auto Parts, Inc. v. Alder, the Court stated:

We have held [] that employers are required to prove AWHA exemptions beyond a reasonable doubt. Although the burden-of-proof issue is not raised on appeal, we note that other than the Fourth, the circuits that have explicitly adopted a standard of proof for the applicability of FLSA exemptions require proof by a preponderance of the evidence.[15]

         The Court also held:

[a] federal statute, the Fair Labor Standards Act (FLSA), applies concurrently and requires overtime pay under circumstances identical to those identified in the AWHA. The terms used in the AWHA, if not defined in Alaska law, carry the definitions used in the FLSA.[16]

         In light of the foregoing, it is unclear that if the Alaska Supreme Court were presented with the issue, it would overrule Dayhoff and apply the preponderance of the evidence standard to AWHA exemption determinations.

         Because the Alaska Supreme Court's beyond a reasonable doubt standard as articulated in Dayhoff and Fred Meyer has not been expressly overruled by the state's highest court, it is not accurate to say that “no controlling precedent” governs the question of the applicable standard, as Rule 407(a) requires.[17] However, the possible shift in the law prompts this Court to seek certification from the Alaska Supreme Court, as clarification of the standard of proof would assist this Court in accurately instructing the jury on ...

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