State Ex Rel. Nilsen v. Whited

DENECKE, J.,

specially concurring.

I agree that the wage statute is not violative of any due process requirement. Unlike the majority, however, I do not believe that liquor control is the basis for this exercise of the police power. In my opinion the connection between liquor control and the payment of the food contractor’s employees is tenuous. I would rather base the exercise of the police power on the state’s interest in the payment of wages to certain classes of wage earners.

Wages often have been singled out for special legislation. OBS 562.110 et seq. There are statutes fixing penalties if wages are not paid on time, OBS 652.150, allowing attorney fees for bringing action to collect wages, OBS 652.200, providing for bonds to insure the payment of wages, OBS 652.340.

Wages of certain kinds of employees have been selected for special legislative treatment. The legislature has provided that the wages of certain employees shall be a lien on the real and personal property of persons who have not contracted for the wage earner’s services. This is the import of the mechanic’s lien statutes and statutes providing labor liens for loggers, woodworkers, fishermen, etc. OBS 87.005 et seq. In each of these instances the employee has labored upon the property of the owner and thus conferred a benefit upon the owner.

Additional protection is extended to laborers employed on construction projects for the state or any subdivision thereof. Contractors are required to furnish a bond guaranteeing payment of the wages of *161all laborers, whether they are employees of the contractor or others. ORS 279.510. Here, again, the labor of all employees upon the job, whether employees of the contractor, or of others, benefits the contractor by contributing to the performance of the contractor’s contract.

ORS 652.335, the statute in question here, also can be regarded as legislation designed to protect wage earners who confer a benefit on the party declared responsible for their wages. In this case the labor of plaintiff’s assignors, the employees of the food service contractor, directly benefited the defendants. The defendants must have food served at their premises or they will lose their liquor license. Art I, § 39, Oregon Constitution. The employees earn their wages by providing this food service. Under these circumstances the legislature is empowered to provide that the person holding the liquor dispensing license is liable for the wages of the food service employees, whether they are employed by the license holder or by another with whom he has contracted to furnish the indispensable food service.

The exercise of that power by the legislature would not violate “substantive due process” under the Fourteenth Amendment as that phrase has been interpreted by the courts either before or after Nebbia v. New York, 291 US 502, 54 S Ct 505, 78 L ed 940 (1934). See 39 Or L Rev 138, 150-152 (1960).

Assuming for the purpose of this concurring opinion that Art I, § 20, of the Oregon Constitution requires both “substantive” and procedural due process, ORS 652.335 does not violate this constitutional provision. The imposition of responsibility for the payment of wages of persons who have benefited the *162obligor by tbeir labor is within the power of the legislature.

The question still remains whether this statute violates the equal protection clause of the United States or Oregon Constitutions, Art I, § 20. The statute has selected one business, liquor dispensing, and required the proprietors to be responsible for the wages of employees of the food concessionaires. "Whether this is permissible under the Equal Protection Clause depends upon whether the dispensing of liquor, together with food service, a joinder required by the Oregon Constitution, makes such an operation sufficiently different so as to warrant classifying it separately from other businesses where food is sold through a concessionaire. See Foeller v. Housing Authority of Portland, 198 Or 205, 259, 256 P2d 752, 777 (1953).

Businesses, other than liquor dispensers, which serve food do so for two purposes. Either the businessman expects to profit directly from the sale of the food or he expects that the service of food will attract customers to his premises and thereby increase sales of other services or goods. In either event the sale of food is to produce a profit. This motive normally will cause the food concession to be let to a financially reliable operator. If food service does not produce a profit, directly or indirectly, the food concession will not be renewed. The proprietor will either quit having food served or contract with a more promising food concessionaire.

The liquor dispensing business in Oregon is different. In many instances the liquor dispenser serves food only because he must in order to keep his dispensing license. The fact that the licensee frequently contracts out the food service is some indication that *163it is seldom profitable. See Van Ripper v. Liquor Cont. Comm., 228 Or 581, 365 P2d 109 (1961) (food concession granted “for nothing”). This is further suggested by Regulation 17 of the Oregon Liquor Control Commission which requires the licensee to earn at least 25 percent of his gross receipts from the sale of food. The licensee in Van Ripper v. Liquor Cont. Comm., supra, testified that for a 60-day period the food concessionaire’s gross receipts were $263.83; during the same period the gross receipts from liquor sales were $12,569.55. Food service in connection with liquor dispensing is, in many instances, a marginal business. Yet, unlike most marginal businesses which soon shut down, food service must be continued in conjunction with liquor dispensing. The payment of wages of employees of an employer who is in a marginal business is more uncertain than that of employees in an ordinary business.

I deem the relation of liquor dispensers and the employee of the food concessionaires of such dispensers to be so unique that the legislature may constitutionally classify it separately and require the dispenser to be responsible for the wages of such employees.

O’Connell and Goodwin, JJ., join in this specially concurring opinion.