A hearing was held on August 6 and 7, 1990 on debtor's objection to Hubert C. Tarrant's Proof of Claim No. 3 for $26,776.07 (or, $53,552.14 if double damages are allowed). The court rules in part for Tarrant based upon the following:

1-      In about October, 1986, Tarrant and debtor entered a contract that Tarrant would work as "legal coordinator" to compile and typeset the legal section of the Alaska Journal of Commerce (AJC), which was the weekly business newspaper published by debtor. This was to be a four day or 32 hours per week. There is a dispute as to whether this was a flat contract or whether Tarrant was to work four or five days. I give more credit to the testimony of Tarrant and Jim Martin in this respect than Don Frood, Les Gunderson, or Linda Brown as to whether there was to be a four or five day workweek.

    1 ABR 56  2-      In about October, 1986, Tarrant began keeping an overtime log which he never showed to debtor until October of 1989 (Tarrant's Exhibit F), about three months after he was terminated by debtor. This was kept fairly contemporaneously. He used this to compile, with the help of the Alaska Department of Labor, Wage and Hour Division, a claim equivalent to the amount claimed in Proof of Claim No. 3. I find that the records were in fact kept and were not contrived for the purposes of making an unwarranted overtime claim against debtor.

3-      A two year statute of limitation exists under AS 23.10.130, limiting the recovery of wage claims. Tarrant assigned his claim to the Department of Labor which brought a wage and hour claim in August, 1989, so the statute has run on claims before August 1, 1987. Dayhoff v. Temsco Helicopters, Inc. 772 P.2d 1085, 1087 (Alaska 1989).

4-      AS 23.10.060 provides, in part:

      An employer who employs employees engaged in commerce, or other business, or in the production of goods or materials in Alaska may not employ an employee not acting in a supervisory capacity, either male or female, for a workweek longer than 40 hours or for more than eight hours a day, except that if the employer finds it necessary to employ an employee in excess of 40 hours a week or eight hours a day, compensation for the overtime at the rate of one and one- half times the regular rate of pay shall be paid, and this provision is considered included in all contracts of employment. This section does     1 ABR 57  not apply with respect to [subject to exceptions which are not applicable].

5-      From October, 1986 to about May, 1988, Tarrant was nominally an independent contract, and from May, 1988 to July, 1989, he was treated as an employee. For the purposes of Tarrant's claim, he was an employee covered by AS 23.10.060. There is no definition of employee in the Alaska Wage and Hour Act, AS 23.10, per se, but where none is provided, the Act adopts the definition from the Fair Labor Standards Act of 1938. The FLSA, 29 U.S.C §203(e)(1) defines an "employee" as "any individual employed by an employer. Although this is not very helpful by itself, a review of cases interpreting the statute leads to the conclusion that Tarrant was an "employee" for wage and hour purposes. See Usery v. Pilgrim Equipment Co., Inc., 527 F.2d 1308 (5th Cir. 1976), cert. den. 429 U.S. 826 (1976).

6-      The rate of hourly pay based on a 32 hour week is $14.42 per hour for straight time and $21.63 for overtime at time-and-a-half. Tarrant is entitled to additional straight time and overtime as calculated by AS 23.10.060. From August 1, 1987 to April 8, 1988, Tarrant only kept weekly summaries, so overtime is calculated at straight time for over 32 hours up to 40 hours and time-and-a-half for over 40 hours. For the period after April 29, 1988, records were kept of daily overtime and the amount over     1 ABR 58  8 hours per day or beyond the 32 hours a week may be treated as time-and-a-half.

7-      Debtor had an Employee Handbook dated August 20, 1984 which discusses overtime. (Exhibit L at page 2). It said overtime would only be allowed for work authorized by the General Manager and an Overtime Permit had to accompany payment requests. There was no evidence this policy was generally enforced, although there was testimony that other salaried employees kept and submitted overtime records. The court does not find the manual binding since there was virtually no evidence about it.

8-      Debtor claims, in any event, that Tarrant received more than $24,000 per year (or the appropriate pro rata portion for periods under consideration which were less than a year). Debtor argues this should offset any overtime claim. The court finds these "excess" payments could not have been overtime since debtor denies even knowing about an overtime claim before October, 1989, and Tarrant says he did not request it before then. The testimony did not explain what these excess amounts were for, but they were not for overtime. They may have been for sales commission or the editorship of Alaska Air, but not for overtime on the AJC contract. In addition to the AJC typesetting job described in ¶ 1, Tarrant was to get     1 ABR 59  a commission on certain legal advertising business he brought in, and for a period of time, for being the editor of Air Alaska.

9-      Any claim to double damages under AS 23.10.110 is disallowed. The court disallows the "liquidated damages" which are in the nature of punishment since it would dilute other unsecured claims. Cf. Gore v. Schlumberger Limited, 703 P.2d 1165 (Alaska 1985), Matter of Johns-Manville Corp., 68 B.R. 618, 627 (Bankr.S.D.N.Y. 1986), aff'd. 78 B.R. 407 (1987), and In re A.H. Robins Co., Inc., 89 B.R. 555 (E.D.Va. 1988).

10-      Debtor acknowledges the claim for severance pay and vacation pay totalling $2,500 as a general unsecured claim since it was incurred more than 90 days before this case was filed while the debtor was still operating. 11 U.S.C. § 507(a)(3).

11-      Tarrant has established the portion of the claim being allowed by a preponderance of the evidence.

      Therefore,

      IT IS ORDERED that Proof of Claim No. 3 filed by Hubert C. Tarrant will be allowed as described above. Mr. Tarrant is to submit a calculation of the amount to Thomas Yerbich, Esq., debtor's attorney, and the court within 5 business days of the entry of this order so that a supplemental order liquidating this claim may be entered.

1 ABR 60  DATED: August 7, 1990
	__/s/ Herbert A. Ross__
	HERBERT A. ROSS
	Bankruptcy Judge