N. PATRICK CROOKS, J.
¶ 1 This wage claim case began when a union-initiated complaint was filed with the Department of Workforce Development on behalf of Thomas Kieckhefer and similarly situated production and maintenance employees at Husco International, Inc. The complaint alleged Husco owed the employees wages for 20-minute meal breaks. Such breaks had been unpaid; the union had previously agreed to that in every
¶ 2 The DWD regulation specifically allows employers and unions with a CBA to request a waiver from the State for shorter unpaid meal breaks,
¶ 3 In response to the complaint on the matter, a DWD Equal Rights Division Labor Standards Bureau investigator reviewed information submitted by both sides in the matter. He then rendered a written decision stating that the Department would not seek collection of back wages on the grounds that the factors favoring a waiver were present in this case (specifically, that the parties to the CBA had agreed to the provision and that there was no evidence that the shorter meal breaks jeopardized the life, health, safety or welfare of employees). When the investigator's decision was appealed, DWD Equal Rights Division Labor Standards Bureau issued a letter representing the "final determination in this matter." That determination affirmed the decision not to seek back pay. A request for reconsideration was denied; the letter denying the reconsideration request, issued by the bureau director for the Labor Standards Bureau of the DWD Equal Rights Division, stated that "the union on behalf of its members can bring lawsuit against Husco in civil court" pursuant to Wis. Stat. § 109.11.
¶ 4 As permitted by that statute, six Husco employees brought suit in circuit court
¶ 5 We agree with the court of appeals that summary judgment is appropriate.
¶ 6 The test for whether a plaintiff's state-law claim is a Section 301 claim is whether resolving the case "requires the interpretation of a collective-bargaining agreement."
¶ 7 Having ascertained that state law governs the claim before us, we turn to the substantive question: Are the employees entitled, under Wis. Admin. Code DWD § 274.02, to back pay for the unpaid meal breaks in this case? Plaintiffs pursued this claim in circuit court after exhausting their administrative remedies, so we have the benefit in this case of the agency's interpretation of DWD § 274.02, its own regulation, which is given "controlling weight" if it is "reasonable and consistent with the meaning and purpose of the regulation."
¶ 8 We therefore reverse the court of appeals and remand for entry of summary judgment in favor of Husco.
¶ 9 There is no dispute on the central facts: that for decades, the union and Husco agreed, via the CBA, to unpaid meal breaks shorter than 30 minutes; that DWD § 274.02 allows parties to a CBA to obtain a waiver for such a practice; and that no such waiver was obtained. From 1983 through 2007, successive CBAs between Husco and District No. 10 of the International Association of Machinists and Aerospace Workers Union (District 10) provided that meal breaks would be unpaid and last 20 minutes. All parties agree that these were the terms of the CBA in effect during the relevant period.
¶ 10 Following the discovery, in late 2006, that DWD § 274.02 was in conflict with the CBA provision, District 10 sent a letter to Husco asserting that Husco was required to pay employees for the unpaid breaks notwithstanding the CBA. Husco instead proposed that Husco and District 10 jointly seek a waiver from DWD to resolve the matter. District 10 declined to do so unless Husco gave the employees new, additional monetary concessions in return, such as cash payments or reinstatement of employee pensions. Husco declined to do so. When the parties were unable to reach a resolution, Husco unilaterally extended employee meal breaks to 30 minutes, ending the practice of the shorter unpaid meal breaks on October 2, 2007.
¶ 11 In the meantime, District 10 had filed its complaint with DWD on February 9, 2007. In a July 16, 2007, letter, the DWD notified the union that the DWD would not seek back pay for the following reasons. It said even though the 20-minute unpaid breaks were technically violations of the code, it would be unreasonable to grant back pay because the breaks had posed no health or safety concerns, the statute permits waivers in circumstances such as these, and the employees had enjoyed other benefits in exchange for the agreement to have the short unpaid meal periods. The union sought review of the decision and received a final determination from the agency that no back pay would be sought. The union requested reconsideration, and the Department "reaffirm[ed] the earlier final determination."
¶ 12 The plaintiffs then brought suit in state court pursuant to Wis. Stat.
¶ 13 The case proceeded in federal court for a time, and the United States District Court for the Eastern District of Wisconsin certified it as a class action. But the district court ultimately remanded the case to state court on its own motion, holding that, contrary to Husco's contention, plaintiffs' claim was not a Section 301 claim. Consistent with its ruling in a contemporaneous case with virtually identical facts, the district court ruled that there was no basis for federal jurisdiction.
¶ 14 Its analysis focused on the two objectives for federal law preemption of state law in labor disputes: to keep states from "purport[ing] to determine the meaning of collective-bargaining agreements" and to keep plaintiffs from "bypass[ing] arbitration over a claim for breach of the agreement."
¶ 15 Back in state court, in Milwaukee County Circuit Court, the parties stipulated to having the case certified as a class action. All parties stipulated that there were no material factual disputes and the matter was appropriate for summary judgment; nevertheless, the circuit court denied
¶ 16 All parties sought interlocutory review of the circuit court's order. On review, the court of appeals held that the matter was ripe for summary judgment.
¶ 17 This court applies the same summary judgment standards as the circuit court, pursuant to Wis. Stat. § 802.08(2) and Bell v. County of Milwaukee, 134 Wis.2d 25, 30, 396 N.W.2d 328 (1986). Summary judgment is appropriate when there are no issues of material fact and only a question of law is presented. Id. As to the first question concerning the application of federal labor contract law, "[t]he pre-emptive effect of § 301 is a question of law." Miller Brewing Co. v. Dep't of Indus., Labor & Human Relations, Equal Rights Div., 210 Wis.2d 26, 33, 563 N.W.2d 460 (1997). As to the second, in which we review a decision of the DWD concerning DWD § 274.02, the standard is well established:
DaimlerChrysler v. Labor & Indus. Review Comm'n, 2007 WI 15, ¶ 15, 299 Wis.2d 1, 727 N.W.2d 311, opinion clarified on denial of reconsideration, 2007 WI 40, ¶ 15, 300 Wis.2d 133, 729 N.W.2d 212 (internal citations omitted). Further, an interpretation that is subject to such deference needs to "merely be reasonable for it to be sustained." Harnischfeger Corp. v. Labor & Indus. Review Comm'n, 196 Wis.2d 650, 661, 539 N.W.2d 98 (1995). "An administrative agency's interpretation of its own rules is controlling unless plainly erroneous or inconsistent with the language of the rule." State v. Busch, 217 Wis.2d 429, 441, 576 N.W.2d 904 (1998).
¶ 18 As noted above, the first question our analysis must answer when
Miller Brewing, 210 Wis.2d at 37, 563 N.W.2d 460 (internal citations omitted). To accomplish its purposes, Section 301 is given "unusual pre-emptive power." Livadas v. Bradshaw, 512 U.S. 107, 122 n. 16, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994). Conversely, preemption does not apply where its application would not accomplish those purposes: "[W]hen the collective bargaining agreement is merely a tangential consideration in the resolution of an otherwise independent state law action or where resort to its provisions is merely pro forma, we can say with confidence that such consultation does not trigger § 301 preemption." Loewen Group Int'l Inc. v. Haberichter, 65 F.3d 1417, 1422 (7th Cir. 1995). The test is therefore whether the state law claim "requires the interpretation of a collective bargaining agreement." Miller Brewing, 210 Wis.2d at 39, 563 N.W.2d 460.
¶ 19 That test is clear and its application here is straightforward. Federal preemption does not apply to plaintiffs' claim because this dispute requires no interpretation of the CBA. Though Husco won removal to federal district court on the grounds that plaintiffs' claim was subject to Section 301 preemption, it no longer makes that argument. The parties have since shifted their focus to the applicability of preemption to Husco's equitable defenses
¶ 20 In this case, the claim is that employees are entitled to back pay under DWD § 274.02. The CBA permitted unpaid meal breaks that were 10 minutes shorter than the regulation requires for unpaid meal breaks. There is no assertion that the CBA's terms were violated or that the CBA itself requires that Husco pay employees for the meal break time. There is no dispute about any of the terms of the CBA, nor is there any dispute about the interplay between the CBA and the regulation that requires us to define and put a value on any other benefits employees received under the CBA. The sole question is whether the DWD's interpretation of its own rule was reasonable. Answering that question does not require the court to construe any of the terms of the CBA. It is, in the words of Miller Brewing, a "dispute
¶ 21 "Under the authority of § 103.02 the DWD has promulgated an administrative rule requiring employers to pay employees for on-duty meal periods. Wis. Admin. Code § DWD 274.02(3)." German v. Wisconsin Dept. of Transp., Div. of State Patrol, 2000 WI 62, ¶ 10, 235 Wis.2d 576, 612 N.W.2d 50. Given that this case presents an agency's interpretation of its own regulation, the question we next address, applying the appropriate standard of review, is whether the DWD decision in this case is "reasonable" and "consistent with the purpose of the regulation."
¶ 22 The regulation that we are concerned with, DWD § 274.02, states that meal breaks of under 30 minutes cannot be unpaid. In interpreting its regulation, the DWD also took into consideration DWD § 274.05, which permits waivers for the meal-break rule for parties to a CBA.
¶ 23 Wisconsin Admin. Code § DWD 274.02 states, "The employer shall pay all employees for on-duty meal periods, which are to be counted as work time. An on-duty meal period is a meal period where the employer does not provide at least 30 minutes free from work."
¶ 24 Wisconsin Admin. Code § DWD 274.05 states that, with exceptions that are not applicable here,
¶ 25 The DWD interpretation of DWD 274.02 in this factual situation focused on the availability of the waiver and the lack of any prejudice to the life, health, safety, or welfare of the employees. The record contains three documents from DWD: the initial determination by an investigator, the agency's final determination, and a letter reaffirming the final determination.
¶ 26 The initial decision of the DWD Labor Standards Investigator is dated July 15, 2007.
¶ 27 The agency's final determination, dated September 17, 2007, is a letter from Labor Standards Bureau Director Robert S. Anderson to plaintiff's counsel in response to the request for administrative review. The letter makes the following statements:
¶ 28 The final determination was affirmed by a third letter, also signed by Director Anderson and dated October 8, 2007, which states that it is a response to counsel's request for the Department to "reconsider its final determination" in the case. This letter states, "On behalf of the department I am reaffirming the earlier final determination.... The department therefore is hereby closing its case in this matter." The letter also observed that Wisconsin statutes provide the option to bring civil suit against the employer.
¶ 29 We first address the parties' disagreement about whether the DWD decision constitutes the kind of agency decision that is accorded deference.
¶ 30 At the circuit court summary judgment motion hearing, the circuit court asked the parties for their positions on the significance of the DWD decision. Plaintiffs' counsel agreed with the characterization that "what the DWD did here is not binding on the court." Counsel for Husco acknowledged that the DWD decision was not "binding on the court" and stated its position as being that DWD's interpretation of rules was "controlling." Husco did not take the position that plaintiffs "are precluded from bringing a claim." No party asserts that the DWD decision is "binding" on this court.
¶ 31 The correct question is not whether the DWD decision is binding; there is no authority for the proposition that an agency interpretation of its own rules is binding on a court. The correct question is whether there is an agency interpretation of its own regulations, and if so, whether that interpretation is reasonable and consistent with the purpose of the regulation, and, therefore, entitled to controlling weight deference.
¶ 32 Plaintiffs dispute the characterization that there is an agency decision in this case that should be accorded deference. Plaintiffs cite to Building and Construction Trades Council v. Waunakee Community School District, 221 Wis.2d 575, 585 N.W.2d 726 (Ct.App.1998), for the proposition that "[o]pinions by a single agency employee are not an official interpretation by the agency and are not entitled to any deference from the Court." Resp. Br. at 26. In that case, a party sought to obtain "great deference" to the propositions in two letters it had obtained from state employees for use as evidence to bolster its open records request. Id. at 588, 585 N.W.2d 726. The letters were not decisions from prior proceedings in the case, and the court noted that the first document was "not at all the type of contested-case agency
¶ 33 The other cases Plaintiffs cite for the proposition that discretionary agency decisions are not "final agency decisions subject to judicial review" are likewise inapplicable and unpersuasive. See Wis. Environmental Decade v. Public Service Comm'n, 93 Wis.2d 650, 659, 287 N.W.2d 737 (1980) (determining that an order denying a petition for an investigation did not qualify as an administrative decision for purposes of judicial review under Wis. Stat. Chap. 227); Tyler v. State Dept. of Public Welfare, 19 Wis.2d 166, 119 N.W.2d 460 (1963) (holding that there was no legal right to court review of parole board decision because there is no legal right to release on parole); and Wisconsin Professional Police Ass'n v. Public Service Comm'n, 205 Wis.2d 60, 555 N.W.2d 179 (1996) (reviewing a discretionary decision by the Commission "under the arbitrary and capricious standard").
¶ 34 Unlike those examples, this case involves two parties represented by counsel who prepared information and submitted it for review to the agency investigator. The plaintiffs appealed and later requested reconsideration from the agency. The facts were limited and undisputed. There is no question that the regulation was promulgated by DWD and no question that it is the agency charged with administering and resolving employment disputes. We therefore treat the DWD decision as one by an agency interpreting its own rules. As noted above, the standard we employ when reviewing an agency's interpretation of its own rules is that it is due controlling weight. This recognizes the expertise and experience of DWD in both legal questions raised by employment disputes and technical matters such as formulas for back-pay calculations. See Kuhnert v. Advanced Laser Machining, Inc., 2011 WI App 23, ¶ 12, 331 Wis.2d 625, 794 N.W.2d 805 (stating that "the department's methodology for calculating ... overtime pay is entitled to great weight deference.... [N]either the statutes nor the administrative code define `regular rate of pay' or the appropriate method for calculating it.")
¶ 35 The facts set forth above show the text of the regulations and the reasoning of the Department. The DWD decision rests in large part on the investigator's determination that the failure to obtain the waiver that would have satisfied the regulation was "a technical violation" that did not warrant awarding back pay because "the factors required to approve a waiver or modification of DWD 272.02 are present in the facts of this case."
¶ 36 We cannot say that the decision not to pursue an award of back pay is unreasonable. As noted above, the "controlling weight" given to an agency's interpretation
UFE Inc. v. LIRC, 201 Wis.2d 274, 288, 548 N.W.2d 57 (1996). To find for Plaintiffs, we would have to take the position that in spite of the fact that there was no violation of the CBA (the terms of which they agreed to); no allegation of risk to workers' life, health, safety or welfare; and no likely alternative to simply adding ten minutes to the lunch break (and as a result, imposing a longer workday) — which is exactly what later happened — it is out-side the range of reasonableness for DWD to deny back pay and deem the violation to be technical. In fact, simply put, DWD's determination is reasonable.
¶ 37 Nor can we say that it is contrary to the purpose of the regulation. Where the regulation contains an exemption that applies under specific circumstances and the exemption may be granted in the Department's discretion, the regulation's purpose is served where the Department has made such a determination.
¶ 38 We therefore reverse the court of appeals and remand for entry of summary judgment in favor of Husco.
¶ 39 Plaintiffs pursued this claim in circuit court after exhausting their administrative remedies, so we have the benefit in this case of the agency's interpretation of DWD § 274.02, its own regulation, which is given "controlling weight" if it is "reasonable and consistent with the meaning and purpose of the regulation." We conclude that the Department's interpretation and decision to deny recovery of back pay in this case is reasonable and consistent with the purpose of the regulation because the regulation's purpose is to protect the life, health, safety, and welfare of the employees and to accommodate reasonable departures from the rule on meal break length where, under a CBA, labor and management have agreed on that issue.
¶ 40 We therefore reverse the court of appeals and remand for entry of summary judgment in favor of Husco.
Reversed and remanded.
DaimlerChrysler v. Labor & Indus. Review Comm'n, 2007 WI 15, ¶ 15, 299 Wis.2d 1, 727 N.W.2d 311, opinion clarified on denial of reconsideration, 2007 WI 40, ¶ 15, 300 Wis.2d 133, 729 N.W.2d 212 (internal citations omitted) (emphasis added).
(Emphasis added.) See also German v. Wis. Dep't of Transp., Div. of State Patrol, 2000 WI 62, ¶ 10, 235 Wis.2d 576, 612 N.W.2d 50. In this case the Husco employees opted to file a wage claim with the Department and exhausted administrative remedies within the Equal Rights Division of the Department of Workforce Development. (Claims involving unemployment insurance, worker's compensation, and employment discrimination may be appealed to the Labor and Industry Review Commission; however, LIRC's jurisdiction does not extend to wage claims. See Wis. Admin. Code § LIRC 1.01.)
Wisconsin Stat. § 227.52 also provides a mechanism for judicial review of certain administrative decisions; a DWD decision on wage claims such as this one does not fall into any of the categories excluded from judicial review in that statute. Plaintiffs in this case did not bring their claim under Wis. Stat. § 227.52; they brought the claim under Wis. Stat. § 109.03(5).