Legislature(1993 - 1994)

02/22/1994 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    HOUSE LABOR AND COMMERCE                                   
                       STANDING COMMITTEE                                      
                        February 22, 1994                                      
                            3:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Rep. Bill Hudson, Chairman                                                   
  Rep. Joe Green, Vice Chair                                                   
  Rep. Brian Porter                                                            
  Rep. Bill Williams                                                           
  Rep. Eldon Mulder                                                            
  Rep. Joe Sitton                                                              
  MEMBERS ABSENT                                                               
  Rep. Jerry Mackie                                                            
  COMMITTEE CALENDAR                                                           
  *HB 459:    "An Act relating to liquidated damages and                       
               attorney fees for minimum wage and overtime                     
               compensation claims."                                           
               PASSED OUT OF COMMITTEE                                         
  HB 403:     "An Act requiring that automobile liability                      
               insurance include coverage for uninsured or                     
               underinsured motor vehicles and an offer of                     
               policy limits for that coverage equal to                        
               coverage voluntarily purchased for bodily                       
               injury or death; and providing for an                           
               effective date."                                                
               PASSED OUT OF COMMITTEE                                         
  *HB 309:    "An act relating to disposals of state land                      
               within five miles of the right-of-way of the                    
               Dalton Highway to a licensed public utility                     
               or a licensed common carrier."                                  
               POSTPONED UNTIL FEBRUARY 24, 1994                               
  WITNESS REGISTER                                                             
  PERRY GROVER, Labor Relations Attorney                                       
  550 W. 7th Ave., Suite 1450                                                  
  Anchorage, Alaska  99501                                                     
  Phone:  257-5300                                                             
  POSITION STATEMENT:  Supported HB 459                                        
  BRUCE WEYRAUCH, Attorney                                                     
  Faulkner, Banfield, Doogan & Holmes Law Offices                              
  302 Gold St.                                                                 
  Juneau, Alaska  99801                                                        
  Phone:  586-2210                                                             
  POSITION STATEMENT:  Supported HB 459                                        
  RUPE ANDREWS, Volunteer                                                      
  9416 Long Run Drive                                                          
  Juneau, Alaska  99802                                                        
  Phone:  Not given                                                            
  POSITION STATEMENT:  Opposed sections of HB 459                              
  HOWARD JAEGER                                                                
  Alaska Independent Insurance Agents and Brokers                              
  Shattuck & Grummett, Inc.                                                    
  301 Seward St.                                                               
  Juneau, Alaska  99801                                                        
  Phone:  586-2414                                                             
  POSITION STATEMENT:  Supported HB 403                                        
  JOHN GEORGE, Lobbyist                                                        
  National Association of Independent Insurers                                 
  9515 Moraine Way                                                             
  Juneau, Alaska  99801                                                        
  Phone:  789-0172                                                             
  POSITION STATEMENT:  Supported HB 403                                        
  PREVIOUS ACTION                                                              
  BILL:  HB 459                                                                
  SHORT TITLE: DAMAGES & ATTY FEES FOR UNPAID WAGES                            
  SPONSOR(S): LABOR & COMMERCE                                                 
  JRN-DATE     JRN-PG               ACTION                                     
  02/09/94      2321    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/09/94      2321    (H)   L&C, STATE AFFAIRS, JUDICIARY                    
  02/22/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  BILL:  HB 403                                                                
  SPONSOR(S): LABOR & COMMERCE                                                 
  JRN-DATE     JRN-PG               ACTION                                     
  01/26/94      2155    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/26/94      2155    (H)   LABOR & COMMERCE, STATE AFFAIRS                  
  02/03/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  02/03/94              (H)   MINUTE(L&C)                                      
  02/22/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  BILL:  HB 309                                                                
  SPONSOR(S): REPRESENTATIVE(S) THERRIAULT,James                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/03/94      2007    (H)   PREFILE RELEASED                                 
  01/10/94      2007    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/10/94      2008    (H)   L&C, RESOURCES, FINANCE                          
  01/11/94      2034    (H)   COSPONSOR(S): JAMES                              
  02/22/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  ACTION NARRATIVE                                                             
  TAPE 94-14, SIDE A                                                           
  Number 001                                                                   
  CHAIRMAN BILL HUDSON convened the meeting at 3:11 p.m.                       
  HB 459 - DAMAGES & ATTY FEES FOR UNPAID WAGES                                
  REP. ELDON MULDER explained that HB 459 attempts to correct                  
  a provision in statute which pertains to wage and hour.                      
  Recently, an interpretation by the court posed a problem                     
  with liquidated damages.  Rep. Mulder went on to explain                     
  that when there is a dispute regarding underpaid or unpaid                   
  overtime compensation, liquidated damages double the amount                  
  in dispute.  This is over what the federal law provides.                     
  REP. MULDER stated that our statutes were interpreted to                     
  mean that disputes could be handled by either the Department                 
  of Labor or administratively between the individual making                   
  the claim and the employer, out of court for less than                       
  liquidated damages.                                                          
  REP. MULDER said in the Kinney Shoe case, the court                          
  interpreted the statute to read differently then what was                    
  being done.  The court ruled that no case could be settled                   
  for less than liquidated damages.  Rep. Mulder contends this                 
  was not what the legislature intended and HB 459 would                       
  correct and clarify this situation.                                          
  Number 100                                                                   
  CHAIRMAN HUDSON noted the Department of Labor supported HB
  459, but offered a suggestion to expand the definition of                    
  good faith to include affirmative action taken by the                        
  employer to comply with state law.  The department also                      
  wants section 4, regarding the retroactivity provision.                      
  REP. MULDER explained that the issue is basically how do you                 
  interpret good faith.  As it stands now, the court may award                 
  less than liquidated damages if it believes the employer                     
  legitimately was unaware of the underpaid or unpaid                          
  REP. MULDER stated the reason the definition of good faith                   
  has not been expanded at this time is because there are                      
  precedent setting cases that have determined what good faith                 
  means, and to expand the definition may cloud the issue.                     
  REP. MULDER responded to the Department of Labor's other                     
  concern by saying the provision in HB 459 regarding                          
  retroactivity was put in to make a level playing field from                  
  before the pre-Kinney shoe case to post-Kinney.  It was                      
  never the intent of this bill to be overly punitive.                         
  Number 185                                                                   
  PERRY GROVER, Labor Relations Attorney, testified in support                 
  of HB 459.  He noted the Alaska Wage and Hour Act is                         
  patterned after the Federal Fair Labor Standards Act.                        
  Alaska mandates liquidated damages, but federal law and most                 
  other states allow a very narrow exception that an employer                  
  can show it acted in good faith and reasonably believed the                  
  position was not subject to overtime.  The court could then                  
  use its discretion not to award liquidated damages.                          
  MR. GROVER believes that HB 459 will leave liquidated                        
  damages as a penalty, but will allow employers the exception                 
  of good faith.                                                               
  MR. GROVER commented that HB 459 would also reinstate the                    
  authority with the commissioner of Labor, to waive                           
  liquidated damages if he sees fit.  This was the case prior                  
  to the Kinney Shoe case but not after.                                       
  MR. GROVER believes that subsection (f) will undue the part                  
  of the Kinney Shoe case where the Supreme Court said that                    
  private settlements are void.                                                
  MR. GROVER stated the intention of the drafters of this bill                 
  regarding good faith was to use the same standards the                       
  federal government and other states have been using.  He                     
  feels if Alaska uses any other language than the federal                     
  government, it would just encourage lawsuits.                                
  MR. GROVER said the reason the effective date was broken                     
  into two operative provisions is because the commissioner of                 
  Labor wanted section 3(e) to become effective on the                         
  effective date of the Act.  The other provisions provide for                 
  any cases that are pending to use these new standards                        
  clarified by HB 459.                                                         
  Number 372                                                                   
  REP. JOE GREEN asked what the section on reasonable                          
  attorneys fees meant.                                                        
  MR. GROVER responded that reasonable attorney fees would be                  
  determined under Alaska Court Rule 82.                                       
  Number 400                                                                   
  BRUCE WEYRAUCH, Attorney, Faulkner, Banfield, Doogan &                       
  Holmes, mentioned his concerns regarding HB 459.  Mr.                        
  Weyrauch stated that Alaska is unique in its huge seasonal                   
  workforce.  Those companies and businesses that come in to                   
  the state to do work on a seasonal basis generally don't pay                 
  as much attention to our laws as those companies who stay                    
  Number 440                                                                   
  MR. WEYRAUCH stated the wage and hour laws were intended to                  
  be strictly enforced, and as the Supreme Court said in the                   
  Kinney Shoe case, very punitive in nature, if they are not                   
  Number 450                                                                   
  MR. WEYRAUCH suggested an amendment to HB 459 that would                     
  avoid litigation and allow the Department of Labor to get                    
  involved in the front end of the issue.                                      
  MR. WEYRAUCH suggested a second amendment to provide                         
  supervision by the commissioner of Labor of any payment of                   
  the unpaid minimum wages or the unpaid overtime in dispute.                  
  Number 477                                                                   
  RUPE ANDREWS, Volunteer, AARP, expressed his concern that HB
  459 did not provide any supervision of wage and hour                         
  settlements to protect senior citizens.                                      
  Number 490                                                                   
  CHAIRMAN HUDSON asked if there were any kinds of protection                  
  in current law for seniors.                                                  
  Number 496                                                                   
  MR. WEYRUACH answered no.                                                    
  REP. MULDER asked Mr. Grover to respond to the points just                   
  Number 510                                                                   
  MR. GROVER disagreed with Mr. Weyrauch's testimony.  He                      
  believes even attorneys in the field of labor law disagree                   
  sometimes on the issues, and that employers who in good                      
  faith have not paid overtime are assessed liquidated                         
  MR. GROVER noted that private settlements are allowed in all                 
  other areas of law, but wage and hour cases.                                 
  Number 550                                                                   
  REP. MULDER stated that section (f) of the bill is the guts                  
  of the bill that allows for private settlements.                             
  Number 572                                                                   
  REP. BRIAN PORTER stated he does not support amendments.                     
  Number 586                                                                   
  CHAIRMAN HUDSON asked if the federal law provides any extra                  
  assurances for anyone of advanced age.                                       
  MR. GROVER stated the law did not distinguish by age.                        
  Number 600                                                                   
  CHAIRMAN HUDSON asked if there was anything in the revised                   
  law that would prevent seniors from receiving equal                          
  MR. GROVER answered no.                                                      
  Number 613                                                                   
  REP. MULDER said, senior citizens are not asking to be                       
  treated differently than anyone else.  He added that any                     
  individual that felt they had been cheated, should talk to                   
  the Department of Labor.                                                     
  REP. JOE SITTON stated the Department of Labor has added a                   
  wage and hour position in the Governor's budget.                             
  CHAIRMAN HUDSON responded that the position referenced was                   
  not in the fiscal note attached to this bill, so it was                      
  apparently for other uses.                                                   
  TAPE 94-14, SIDE B                                                           
  Number 001                                                                   
  REP. MULDER stated that section 4 is arbitrary, but it would                 
  allow those cases that were started to be affected by HB 459                 
  Number 020                                                                   
  REP. PORTER stated he supports this retroactive clause in                    
  section 4 because it allows more cases the option of a                       
  private settlement, which in turn would free up the court                    
  Number 041                                                                   
  REP. BILL WILLIAMS moved that HB 459 be passed out of                        
  committee with individual recommendations and a zero fiscal                  
  note.  There were no objections.                                             
  HB 403 - AUTOMOTIVE LIABILITY INSURANCE COVERAGE                             
  CHAIRMAN HUDSON brought up HB 403 and invited testimony.                     
  Number 087                                                                   
  HOWARD JAEGAR, Shattuck and Grummett, Alaska Independent                     
  Insurance Agents and Brokers, testified in favor of HB 403.                  
  Mr. Jaegar stated that HB 403 is important for competition                   
  in the state.  As pointed out in one of the letters in the                   
  committee packet, there are companies that come into the                     
  state, and because they write either youthful operators or                   
  impaired drivers, they only want to the state required                       
  limits of liability.  State law, however, requires them to                   
  go further and offer the $1,000,000.00 to $2,000,000.00                      
  uninsured/underinsured motorists limits.  Very few people in                 
  Alaska are buying this type of insurance.                                    
  MR. JAEGAR believes there are better ways to protect                         
  yourself than buying this type of insurance.  The Alaska                     
  Independent Insurance Agents and Brokers support HB 403                      
  because it allows people to still buy the higher liability                   
  MR. JAEGAR noted that Alaska has the highest mandatory auto                  
  insurance in the United States.  He added that if you add to                 
  that the cost of uninsured motorists, the price to the                       
  consumer goes up.                                                            
  MR. JAEGAR noted that a lot of youthful drivers don't want                   
  to buy uninsured motorists insurance and according to the                    
  present law, it's their option.                                              
  JOHN GEORGE, Lobbyist, National Association of Independent                   
  Insurers, testified in support of HB 403.  Mr. George said,                  
  when he was the Director of the Division of Insurance and                    
  the legislature changed the law, the state lost a number of                  
  insurance companies, because they were small practices                       
  writing offbeat insurance and couldn't afford the                            
  reinsurance necessary to cover one or two million dollars of                 
  underinsured or uninsured motorists coverage.                                
  MR. GEORGE added his clients believe that coverage ought to                  
  be  offered under the golden rule theory, "do unto others as                 
  you would have them do unto you.  If you buy high limits to                  
  protect them, then you ought to be able to make sure you get                 
  the same limit as if they had bought the coverage."                          
  MR. GEORGE stated that his organization does support HB 403,                 
  but wanted to make the point that it should support the                      
  offer of the limits of liability for underinsured/uninsured                  
  motorists that consumers buy for third party liability.  He                  
  added that would happen under HB 403.                                        
  Number 261                                                                   
  REP. PORTER moved that HB 403 be passed out of committee                     
  with individual recommendations and two fiscal notes.                        
  CHAIRMAN HUDSON adjourned the meeting at 4:13 p.m.                           
  BILLS SCHEDULED BUT NOT HEARD                                                
  HB 309: "An Act relating to disposals of state land within                   
           five miles of the right-of-way of the Dalton                        
           Highway to a licensed public utility or a licensed                  
           common carrier."                                                    

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