Branch v. Cream-O-Land Dairy

• Decision Date: 13 January 2021
• Docket Number: A-29 September Term 2019,083379
• Citation: 243 A.3d 633,244 N.J. 567
• Parties: Elmer BRANCH, on behalf of himself and all other similarly situated persons, Plaintiff-Respondent, v. CREAM-O-LAND DAIRY, Defendant-Appellant.
• Court: New Jersey Supreme Court

244 N.J. 567

243 A.3d 633

Elmer BRANCH, on behalf of himself and all other similarly situated persons, Plaintiff-Respondent,

v.CREAM-O-LAND DAIRY, Defendant-Appellant.

A-29 September Term 2019

083379

Supreme Court of New Jersey.

Argued September 30, 2020

Decided January 13, 2021

David R. Kott argued the cause for appellant (Fox Rothschild and McCarter & English, attorneys; Mark E. Tabakman, Lawrenceville, and Adam N. Saravay, Newark, on the briefs).

Ravi Sattiraju argued the cause for respondent (Sattiraju & Tharney, attorneys; Ravi Sattiraju, of counsel and on the briefs, and Anthony S. Almeida, Princeton, and Steven B. Gladis, on the briefs).

Michael A. Galpern argued the cause for amicus curiae New Jersey Association for Justice (Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins, attorneys; Michael A. Galpern, Cherry Hill, on the brief).

Thomas A. Linthorst argued the cause for amici curiae New Jersey Business & Industry Association and Commerce and Industry Association of New Jersey (Morgan Lewis & Bockius, attorneys; Thomas A. Linthorst, Princeton, of counsel and on the brief).

Jeffrey S. Jacobson argued the cause for amici curiae New Jersey Civil Justice Institute and National Federation of Independent Business (Faegre Drinker Biddle & Reath, attorneys; Jeffrey S. Jacobson, Florham Park, on the brief).

Caroline Jones, Deputy Attorney General, argued the cause for amicus curiae State of New Jersey (Gurbir S. Grewal, Attorney General, attorney; Donna Arons, Assistant Attorney General, of counsel, and Caroline Jones, on the brief).

JUSTICE PATTERSON delivered the opinion of the Court.

In this putative class action, plaintiff Elmer Branch asserted claims against his employer, defendant Cream-O-Land Dairy, for payment of overtime wages pursuant to the New Jersey Wage and Hour Law (WHL), N.J.S.A. 34:11-56a to -56a38. Plaintiff contended that he and similarly situated truck drivers employed by defendant were entitled to overtime compensation at 1½ times their regular hourly wage under N.J.S.A. 34:11-56a4(b)(1).

Defendant countered with two principal arguments. First, defendant asserted that it is a "trucking industry employer" under another WHL provision, N.J.S.A. 34:11-56a4(f), and that it is therefore exempt from the overtime requirements of N.J.S.A. 34:11-56a4(b)(1) and required to pay only 1½ times the minimum wage for overtime hours. Second, defendant argued that it relied in good faith on certain determinations that it qualified as a "trucking industry employer" and could therefore invoke the defense set forth in N.J.S.A. 34:11-56a25.2.

N.J.S.A. 34:11-56a25.2 is a provision of the WHL that affords to an employer an absolute defense in certain WHL actions involving minimum wages and overtime compensation based on the employer's good-faith reliance on certain Department of Labor and Workforce Development (Department) determinations. To establish the good-faith defense, the employer must "plead[ ] and prove[ ] that the act or omission complained of was in good faith in conformity with and in reliance on" one of two alternative categories of determinations: (1) "any written administrative regulation, order, ruling, approval or interpretation by the Commissioner of the Department of Labor and Industry or the Director of the Wage and Hour Bureau," or (2) "any administrative practice or enforcement policy of such department or bureau with respect to the class of employers to which [the employer] belonged." N.J.S.A. 34:11-56a25.2.

In support of its assertion of the WHL's good-faith defense, defendant cited three prior determinations by employees of the Department concluding that defendant was a "trucking industry employer" entitled to claim an exemption under N.J.S.A. 34:11-56a4(f). The trial court viewed those decisions to satisfy N.J.S.A. 34:11-56a25.2 ’s standard for the good-faith defense and granted summary judgment dismissing plaintiff's claims.

The Appellate Division reversed the trial court's grant of summary judgment, holding that none of the Department's determinations on which defendant relied met the requirements of the good-faith defense. Branch v. Cream-O-Land Dairy, 459 N.J. Super. 529, 548-53, 212 A.3d 947 (App. Div. 2019). It accordingly remanded this matter to the trial court for further proceedings. Id. at 553, 212 A.3d 947.

We concur with the Appellate Division that none of the decisions identified by defendant satisfy the requirements of the good-faith defense under the plain language of N.J.S.A. 34:11-56a25.2. We acknowledge, however, the dilemma faced by an employer such as defendant, which repeatedly prevailed in overtime disputes before subordinate Department employees but was unable to seek a ruling from the Commissioner of the Department of Labor and Workforce Development (Commissioner) because each of those disputes was resolved without further review.

We respectfully suggest that the Department would further the Legislature's intent in N.J.S.A. 34:11-56a25.2 if it instituted a procedure by which an employer in defendant's position could obtain an opinion letter or other ruling clarifying its obligations under the WHL's overtime provisions. The Legislature and the Department may determine whether further statutory or regulatory guidance should be provided regarding the good-faith defense under N.J.S.A. 34:11-56a25.2. In that regard, the federal approach to the good-faith defense set forth in the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 201 to 219, and the regulations promulgated pursuant to the FLSA, may be considered.

We affirm as modified the Appellate Division's determination. We remand this matter to the trial court for consideration of defendant's argument that it is a trucking-industry employer within the meaning of N.J.S.A. 34:11-56a4(f) and for determination of whether defendant complied with the applicable WHL overtime standards in compensating its employees.

I.

A.

1.

Subject to exceptions enumerated in the statute, the WHL provides that an employer shall "pay each employee not less than 1½ times such employee's regular hourly rate for each hour of working time in excess of 40 hours in any week." N.J.S.A. 34:11-56a4(b)(1). The WHL, however, creates an exemption from that overtime compensation requirement for employees of a "trucking industry employer," defined in the statute as "any business or establishment primarily operating for the purpose of conveying property from one place to another by road or highway." N.J.S.A. 34:11-56a4(f). For such employees, the WHL prescribes an alternative method of computing overtime compensation; it provides that,

[n]otwithstanding the provisions of this section to the contrary, every trucking industry employer shall pay to all drivers, helpers, loaders and mechanics for whom the Secretary of Transportation may prescribe maximum hours of work for the safe operation of vehicles, pursuant to section 31502(b) of the federal Motor Carrier Act, 49 U.S.C. § 31502(b), an overtime rate not less than 1½ times the minimum wage required pursuant to this section and N.J.A.C. 12:56-3.1.

[Ibid. ]

Whether defendant is a "trucking industry employer" entitled to claim an exemption under N.J.S.A. 34:11-56a4(f) is the core issue in the litigation that gave rise to this appeal.

2.

In his putative class action complaint, plaintiff sought certification of a class consisting of "[a]ll individuals that performed truck driving functions in the State of New Jersey for Defendants from November 2014 to the present." Plaintiff alleged that he and other class members worked an average of sixty to eighty hours per week loading and unloading defendant's snack products and delivering those products to defendant's customers. Plaintiff claimed that he and the other truck drivers employed by defendant were entitled to be paid 1½ times their hourly rate in overtime compensation when they worked more than forty hours per week. He contended that defendant violated the WHL by failing to pay them overtime in accordance with N.J.S.A. 34:11-56a4(b)(1).

Defendant responded that it was exempt from paying overtime under the formula set forth in N.J.S.A. 34:11-56a4(b)(1) because it qualified as a "trucking industry employer" within the meaning of N.J.S.A. 34:11-56a4(f). It asserted as an affirmative defense the good-faith defense under N.J.S.A. 34:11-56a25.2.

Pursuant to Rule 4:46-2, defendant filed a motion for summary judgment in the trial court, seeking dismissal of the complaint. It contended that it was indisputably a "trucking industry employer" and was thus exempted under N.J.S.A. 34:11-56a4(f) from N.J.S.A. 34:11-56a4(b)(1) ’s overtime requirements. Defendant asserted that its "sole business is the warehousing and conveying of refrigerated and non-refrigerated products ... from one place to another by highway," and that it did not manufacture or produce any products. It contended that it complied with N.J.S.A. 34:11-56a4(f) in compensating its truck drivers for overtime work, because those drivers "earned at least one-and-a-half times the minimum wage for every hour worked, as required under th[e] statute."

In support of its assertion of the good-faith defense prescribed by N.J.S.A. 34:11-56a25.2, defendant relied on three matters in which the Department had investigated its operations and concluded that it was a "trucking industry employer" and was exempt from N.J.S.A. 34:11-56a4(b)(1) ’s overtime requirements pursuant to N.J.S.A. 34:11-56a4(f).

The first of those matters arose in 2007, when the Department investigated defendant's overtime practices in response to a driver's complaint that he was not paid the requisite overtime wages for hours worked in excess of forty per week. Appealing the Department's imposition of a $40,000 penalty for failure to pay overtime, defendant attended a conference with a Department hearing and review officer. The hearing and review officer issued a handwritten decision stating that defendant "is considered a trucking industry employer required only to pay...