Elmer Branch v. Cream-O-Land Dairy (083379)(Hudson County & Statewide) ( 2021 )

SYLLABUS
This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the
Clerk for the convenience of the reader. It has been neither reviewed nor approved by the
Court. In the interest of brevity, portions of an opinion may not have been summarized.
Elmer Branch v. Cream-O-Land Dairy (A-29-19) (083379)
Argued September 30, 2020 -- Decided January 13, 2021
PATTERSON, J., writing for the Court.
Plaintiff Elmer Branch brought a putative class action against his employer,
defendant Cream-O-Land Dairy, on behalf of himself and similarly situated truck drivers
employed by defendant, for payment of overtime wages pursuant to the New Jersey
Wage and Hour Law (WHL). In this appeal, the Court considers whether defendant
could assert a defense to the action under N.J.S.A. 34:11-56a25.2 based on its good-faith
reliance on certain determinations by employees of the Department of Labor and
Workforce Development (Department) that defendant is a “trucking industry employer.”
Subject to exceptions enumerated in the statute, the WHL provides that an
employer shall “pay each employee not less than 1 ½ times such employee’s regular
hourly rate for each hour of” overtime. 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.” N.J.S.A. 34:11-56a4(f). For such employees, the WHL
provides for “an overtime rate not less than 1 ½ times the minimum wage.” Ibid.
In response to plaintiff’s argument that defendant failed to pay truck drivers as
mandated by N.J.S.A. 34:11-56a4(b)(1), defendant argued that it was exempt from that
provision as a trucking industry employer under N.J.S.A. 34:11-56a4(f). Defendant also
asserted that it was entitled to invoke the absolute defense set forth in N.J.S.A. 34:11-
56a25.2 because it had relied in good faith on three matters in which the Department had
investigated its operations and concluded that it was a “trucking industry employer.”
Those determinations were reached by a hearing and review officer, a senior investigator,
and the Section Chief of the Division of Wage and Hour Compliance (Division),
respectively, but not by the Commissioner of Labor or Director of the Division. None of
those matters was appealed by the complainant driver, and no further proceedings
occurred in the Department with respect to any of the three matters.
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 court did not address whether defendant constituted a “trucking industry employer”
within the meaning of N.J.S.A. 34:11-56a4(f).
1
The Appellate Division reversed, finding that none of the determinations on which
defendant relied met the requirements of the good-faith defense under the plain language
of N.J.S.A. 34:11-56a25.2. The Appellate Division also rejected defendant’s invocation
of a 2006 Opinion Letter by the Director of the Division that for certain employees of
trucking industry employers, N.J.S.A. 34:11-56a4 “establishes their overtime rate at 1 ½
times the minimum wage” because defendant did not represent that it had relied on that
letter when it determined its overtime compensation.
The Court granted certification. 240 N.J. 202 (2019).
HELD: 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. The Court
acknowledges, 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 that would satisfy that statute because each of those disputes
was resolved without further review. The Court respectfully suggests that the
Department would further the Legislature’s intent 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 Court remands this matter 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.
1. The Legislature intended the WHL to protect employees from unfair wages and
excessive hours. The WHL and its federal counterpart, the Fair Labor Standards Act of
1938 (FLSA), reflect similar policies but are not identical. The Court reviews the
structure of the Department and notes that, under the applicable regulations, the
Commissioner of Labor makes the final decision of the Department if a hearing follows
the assessment of an administrative penalty against an employer but that, if a
matter is resolved in the employer’s favor at an informal conference and the employee
takes no further action, the Commissioner does not make a final decision. (pp. 17-20)
2. N.J.S.A. 34:11-56a25.2 provides an absolute defense in compensation matters under
the WHL for employers who plead and prove that they have proceeded in good faith in
conformity with and reliance on certain actions by the Department or the Division,
specifically (1) “any written administrative regulation, order, ruling, approval or
interpretation by the Commissioner . . . or the Director,” or (2) “any administrative
practice or enforcement policy of such department or bureau with respect to the class of
employers to which he belonged.” The WHL does not define most of the terms used in
that statute and, to date, the Department has not promulgated regulations addressing
N.J.S.A. 34:11-56a25.2’s good-faith defense. The Court reviews analogous provisions
under federal law and notes that federal regulations clarify the meaning of core statutory
terms as they appear in the FLSA’s good-faith defense provisions. (pp. 20-23)
2
3. In construing and applying N.J.S.A. 34:11-56a25.2, the Court stresses that the
Legislature identified only two bases for the assertion of a good-faith defense by an
employer under the WHL. Although the Legislature has empowered the Commissioner,
the Director, “and their authorized representatives” to investigate potential violations of
the WHL, the Legislature limited the first prong of the good-faith defense to
determinations issued by the Commissioner and the Director themselves. The Court
considers examples of determinations that would satisfy that first prong of N.J.S.A.
34:11-56a25.2. The statute’s second prong permits reliance on a Department practice or
policy applying the WHL to a “class of employers” and their employees, not to
adjudications of individual complaints against a given employer. N.J.S.A. 34:11-
56a25.2’s plain language requires that the employer plead and prove that at the time of its
challenged act or omission, it relied on the cited authority. (pp. 24-28)
4. The Court concurs with the Appellate Division with respect to the application of
N.J.S.A. 34:11-56a25.2’s plain language to this appeal. None of the decisions cited by
defendant was issued by the Commissioner or the Director; nor did they constitute an
administrative practice or enforcement policy addressing the class of employers to which
defendant belonged. The 2006 Opinion Letter -- a written “interpretation” by the
Director of the WHL’s application to overtime compensation in the trucking industry --
implicates both prongs of N.J.S.A. 34:11-56a25.2; however, it was not issued to
defendant, and it apparently addressed a matter unrelated to this appeal. Defendant never
asserted, let alone pled and proved, that it relied on that Opinion Letter. (pp. 28-30)
5. The Court recognizes that the plain language of N.J.S.A. 34:11-56a25.2 leaves an
employer such as defendant in a difficult position. Having prevailed in three disputes
that ended at an early stage, defendant had no procedural route to secure a ruling by the
Commissioner or Director with respect to those determinations. The Court respectfully
suggests that the Department develop a procedure whereby an employer can seek an
opinion letter or other ruling from the Commissioner or Director regarding a claimed
exemption from the WHL’s overtime requirements. The Court also suggests that the
Legislature and the Department determine whether additional statutory and/or regulatory
guidance should be provided regarding the good-faith defense in WHL proceedings. In
that regard, the Legislature may consider the approach to the good-faith defense in certain
FLSA proceedings adopted by Congress in 29 U.S.C. §§ 259 and 260. The Court also
suggests that the Department consider adopting regulations clarifying the meaning of
N.J.S.A. 34:11-56a25.2’s critical terms, as the United States Department of Labor
defined the core terms of 29 U.S.C. § 259 in 29 C.F.R. §§ 790.13 to 790.19. (pp. 30-31)
AFFIRMED AS MODIFIED. The matter is REMANDED to the trial court.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-
VINA, SOLOMON, and PIERRE-LOUIS join in JUSTICE PATTERSON’s
opinion.
3
SUPREME COURT OF NEW JERSEY
A-29 September Term 2019
083379
Elmer Branch,
on behalf of himself and
all other similarly situated persons,
Plaintiff-Respondent,
v.
Cream-O-Land Dairy,
Defendant-Appellant.
On appeal from the Superior Court,
Appellate Division, whose opinion is reported at
459 N.J. Super. 529 (App. Div. 2019).
Argued Decided
September 30, 2020 January 13, 2021
David R. Kott argued the cause for appellant (Fox
Rothschild and McCarter & English, attorneys; Mark E.
Tabakman and Adam N. Saravay, 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 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 on the brief).
1
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, 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, 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 1 ½ 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
2
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 1
½ 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.
3
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 (App. Div. 2019). It
accordingly remanded this matter to the trial court for further proceedings. Id.
at 553.
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.
4
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 1 ½ times such
5
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 1 ½ 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
6
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 1 ½
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
7
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 drivers time and ½ of minimum wage, which is
what the company is doing. The Department will take no further action
regarding [the case]. The penalties have been abated and the case is now
closed.”
8
The Department investigated defendant’s overtime compensation
practices for the second time in 2014, again in response to a driver’s
complaint. A senior investigator for the Department sent an e-mail to
defendant’s counsel stating that “[i]t’s been determined that [defendant] falls
under the Federal Trucking guidelines of overtime exemption. The claimant
was briefed of our findings, and referred to [the United States Department of
Labor] for questions and concerns.”
Finally, in 2017, the Department investigated another driver’s complaint
that he was not compensated for overtime work in accordance with the WHL.
Following an investigation, the Section Chief of the Division of Wage and
Hour Compliance (Division) advised defendant by e-mail that
[t]he inspection report indicated that [defendant] is
considered a transportation company rather than a
dairy. Since the complainant consistently made above
1½ times minimum wage -- currently $8.44 -- which
equals $12.66 -- per hour, we did not find the company
to be in violation of law at this time. We have sent the
complainant a letter advising him of his right to pursue
his claim at a formal Wage Collection proceeding, but
he has not replied. The complainant has to be the
moving party in order for a Wage Collection
proceeding to go forward. Failing to hear from him, we
shall take no further action on this matter at this time.
None of the three decisions on which defendant relied in its summary
judgment motion was issued by or on behalf of the Commissioner or the
9
Director of the Wage and Hour Bureau (Director). None was appealed by the
complainant driver, and no further proceedings occurred in the Department
with respect to any of the three matters.
In response to defendant’s motion for summary judgment, plaintiff
argued that defendant could not assert the good-faith defense under N.J.S.A.
34:11-56a25.2 absent a decision by the Commissioner or Director, or a written
administrative regulation, order, ruling, approval, or interpretation by the
Commissioner or the Director. He also argued that he was entitled to further
discovery before summary judgment could be entered dismissing his claim.
The trial court granted defendant’s motion for summary judgment. The
court acknowledged that the language of N.J.S.A. 34:11-56a25.2, if construed
strictly, required the employer to rely on a decision by the Commissioner.
However, the trial court concluded that defendant could assert the good-faith
defense without a specific direction from the Commissioner. Citing State v.
Frech Funeral Home, 185 N.J. Super. 385, 393-97 (Law Div. 1982), the court
reasoned that “three investigations should be adequate to establish an
enforcement policy with respect to the defendant’s industry,” and that “an
employer should be permitted to rely on such determinations.” The court did
not address whether defendant constituted a “trucking industry employer”
within the meaning of N.J.S.A. 34:11-56a4(f).
10
B.
Plaintiff appealed the trial court’s grant of summary judgment and its
denial of his motion for reconsideration. Following oral argument, the
Appellate Division granted defendant’s motion to supplement the record with a
June 19, 2006 Opinion Letter from Michael P. McCarthy, then the Director of
the Division of Wage and Hour Compliance, to a law firm representing an
employer in a matter unrelated to this appeal (2006 Opinion Letter). Branch,
459 N.J. Super. at 537-38. In the 2006 Opinion Letter, McCarthy advised the
law firm that for certain employees of trucking industry employers, N.J.S.A.
34:11-56a4 “establishes their overtime rate at 1 ½ times the minimum wage,
rather than basing it on the normally defined regular hourly rate.” Defendant
did not represent that it had relied on the 2006 Opinion Letter when it
determined the overtime compensation of plaintiff or other members of his
putative class.
The Appellate Division invited the Attorney General to appear in this
matter as amicus curiae. In an amicus brief, the Attorney General took the
position that none of the three decisions on which defendant relied constituted
a basis for an employer’s assertion of the good-faith defense under N.J.S.A.
34:11-56a25.2. The Attorney General stated, however, that the 2006 Opinion
11
Letter met the statute’s requirements, because that Opinion Letter represented
the Department’s interpretation of the WHL.
The Appellate Division held that an employer can satisfy the first prong
of N.J.S.A. 34:11-56a25.2 -- the requirement of a “written administrative
regulation, order, ruling, approval or interpretation by the [Commissioner] or
the [Director]” -- only if it had acted in conformity with and in reliance on
“either the Commissioner’s final agency decision rendered after an [Office of
Administrative Law] hearing or a Wage Collection Referee’s final decision .”
Branch, 459 N.J. Super. at 548. The court concluded that because defendant’s
three determinations fell in neither category, defendant could not assert
N.J.S.A. 34:11-56a25.2’s good-faith defense on the basis of that provision’s
first prong. Ibid.
The Appellate Division ruled that an employer can satisfy the statute’s
second prong, requiring conformity with and reliance on an “administrative
practice or enforcement policy,” only if the agency determination “carr[ies] the
imprimatur of the agency head.” Ibid. The court determined that the three
decisions invoked by defendant, all of which were “initial determinations”
subject to further appeal, fell short of that mark. Id. at 548-49. Although the
Appellate Division viewed the 2006 Opinion Letter to constitute an
“administrative practice or enforcement policy” that could support an
12
employer’s assertion of the good-faith defense, it ruled that the Opinion Letter
did not satisfy N.J.S.A. 34:11-56a25.2 in this case because defendant had
presented no evidence that it relied on that document when it determined its
employees’ overtime compensation. Id. at 550-51.
Accordingly, the Appellate Division reversed the trial court’s grant of
summary judgment and remanded for further discovery as to “whether
defendant meets the statutory definition of a trucking industry employer and
the actual hourly compensation plaintiff received.” Id. at 553.
C.
We granted defendant’s petition for certification. 240 N.J. 202 (2019).
We maintained the amicus curiae status of the Attorney General, and we
granted the joint applications of the New Jersey Civil Justice Institute (NJCJI)
and the National Federation of Independent Business (NFIB), and of the New
Jersey Business & Industry Association (NJBIA) and the Commerce and
Industry Association of New Jersey (CIANJ), as well as the application of the
New Jersey Association for Justice (NJAJ), to appear as amici curiae.
II.
A.
Defendant claims that the Appellate Division ignored the plain language
of N.J.S.A. 34:11-56a25.2 when it held that the three decisions cited by
13
defendant do not give rise to a good-faith defense. It contends that N.J.S.A.
34:11-56a25.2 does not mandate that the employer rely on a “final agency
decision” in order to assert the defense. Defendant asserts that the Appellate
Division improperly deferred to what it characterizes as the Attorney General’s
new interpretation of N.J.S.A. 34:11-56a25.2. It urges the Court to rely on
federal case law and regulations applying 29 U.S.C. § 259, an FLSA provision
addressing the good-faith defense.
B.
Plaintiff counters that the Appellate Division properly construed the
WHL’s good-faith defense narrowly, as the defense exempts certain employers
from WHL provisions protecting employees from unfair wages and excessive
hours. He maintains that the Appellate Division correctly determined that
none of the three decisions cited by defendant met the requirements of
N.J.S.A. 34:11-56a25.2. Plaintiff asserts that the Appellate Division’s
decision accords with the plain language of N.J.S.A. 34:11-56a25.2 and the
Attorney General’s interpretation of the statute. He notes that the federal
standard governing the good-faith defense under the FLSA has not been
adopted in New Jersey, and he urges the Court not to consider that standard in
this appeal.
14
C.
Amicus curiae the Attorney General asserts that the good-faith defense
applies only to the high-level decisions by the Department enumerated in
N.J.S.A. 34:11-56a25.2: administrative rulemaking, a final decision by the
Commissioner or Director, or an official practice or policy that affects a class
of employers. The Attorney General contends that none of the three cited
informal decisions by subordinate employees of the Department meets
N.J.S.A. 34:11-56a25.2’s requirements. The Attorney General acknowledges,
however, that the 2006 Opinion Letter, which broadly discussed the
Department’s policy and interpretation of the WHL, meets the description set
forth in the second prong of the statute.
D.
Amici curiae NJCJI and NFIB contend that it is impractical for the
Commissioner or the Director to personally make and communicate all
decisions to terminate investigations and that it is unfair to require an
employer to demonstrate the involvement of one of those senior officials in
order to assert the good-faith defense. They argue that repeated findings by
Department investigators that a business’s employees were properly
compensated for overtime work should give that business a legitimate basis to
assert good-faith compliance with the WHL.
15
E.
Amici curiae NJBIA and CIANJ assert that the three decisions defendant
received, each confirming defendant’s status as a “trucking industry employer”
within the meaning of N.J.S.A. 34:11-56a4(f), clearly reflected the
Department’s “ruling, approval and/or interpretation.” Amici argue that an
employer should be permitted to rely on such decisions in good faith.
F.
Amicus curiae NJAJ urges the Court to narrowly construe the good-faith
defense. It concurs with plaintiff that the plain language of N.J.S.A. 34:11-
56a25.2 limits the good-faith defense to employers relying on decisions by the
Commissioner or Director, and that the statute excludes decisions by
investigators or other Department employees. NJAJ contends that even if
federal laws were followed, the Appellate Division’s decision would be
correct, because the federal good-faith defense requires action by the agency
itself, not individual employees of that agency.
III.
A.
We review de novo the trial court’s grant of summary judgment to
defendants. Barila v. Bd. of Educ. of Cliffside Park, 241 N.J. 595, 611 (2020);
Townsend v. Pierre, 221 N.J. 36, 59 (2015). Applying the same standard that
16
governs the trial court’s review, we determine whether “the pleadings,
depositions, answers to interrogatories and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material fact
challenged and that the moving party is entitled to a judgment or order as a
matter of law.” R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 540 (1995). We review the trial court’s denial of plaintiff’s
motion for reconsideration for abuse of discretion. Kornbleuth v. Westover,
241 N.J. 289, 301 (2020).
B.
When it enacted the WHL in 1966, the Legislature declared it to be the
public policy of the State “to establish a minimum wage level for workers in
order to safeguard their health, efficiency, and general well-being and to
protect them as well as their employers from the effects of serious and unfair
competition resulting from wage levels detrimental to their health, efficiency
and well-being.” N.J.S.A. 34:11-56a. The Legislature intended the WHL “to
protect employees from unfair wages and excessive hours.” Hargrove v.
Sleepy’s, LLC, 220 N.J. 289, 304 (2015) (quoting In re Raymour & Flanigan
Furniture, 405 N.J. Super. 367, 376 (App. Div. 2009)). The statute “should be
construed liberally to effectuate its purpose.” Ibid. (citing Dep’t of Labor v.
Pepsi-Cola Co., 170 N.J. 59, 62 (2001)).
17
The WHL and its federal counterpart, the FLSA, reflect similar policies;
indeed, “[w]e assume that the FLSA mandate for a federal minimum wage
influenced the adoption in 1966 of the WHL to protect workers not covered by
FLSA.” Id. at 313. The state and federal statutes, however, are not identical,
and New Jersey’s wage-and-hour law has occasionally diverged from the
federal wage-and-hour law in specific respects. See, e.g., id. at 310-16
(adopting a different test for employee status under the WHL and the Wage
Payment Law, N.J.S.A. 34:11-4.1 to -4.14, from that imposed under federal
law).
The Department, charged with the responsibility to enforce the WHL,
executes its powers and performs its duties “under the supervision and control
of the [C]ommissioner of [L]abor.” N.J.S.A. 34:1-2. Accordingly, the
Commissioner serves as “the executive and administrative head of the
[D]epartment.” N.J.S.A. 34:1-5.
The Department acts “through departmental bureaus, under the
supervision and control of the [C]ommissioner.” N.J.S.A. 34:1-2. Pursuant to
the WHL, the Commissioner is required to “maintain a bureau in the
[D]epartment to which the administration of this act, and of any minimum
wage orders or regulations promulgated hereunder, shall be assigned, said
bureau to consist of a director in charge and such assistants and employees as
18
the [C]ommissioner may deem desirable.” N.J.S.A. 34:11-56a2. The
Division, headed by the Director, is assigned that authority.
Among other powers, the Commissioner, the Director, “and their
authorized representatives” have the authority to “investigate and ascertain the
wages of persons employed in any occupation in the State.” N.J.S.A. 34:11-
56a6(a). When the Commissioner determines that an employer has violated
the WHL, he or she may collect wages and impose administrative fees and
penalties. See N.J.A.C. 12:56-1.1 to -1.7.
Pursuant to N.J.A.C. 12:56-1.6(a) and (b), when the Commissioner
assesses an administrative penalty against an employer, the employer has the
right to a hearing conducted pursuant to the Administrative Procedure Act,
N.J.S.A. 52:14B-1 to -31. If the employer requests such a hearing, the
Division reviews the request and determines whether “the reason for dispute
could be resolvable at an informal settlement conference.” N.J.A.C. 12:56-
1.6(c). If a matter is referred for such a conference but remains unresolved, it
is “forwarded to the Office of Administrative Law for a formal hearing.” Ibid.
Following that hearing, “[t]he Commissioner shall make the final decision of
the Department,” subject to the right to appeal that decision to the Appellate
Division. N.J.A.C. 12:56-1.6(d), (e). When the matter is resolved in the
employer’s favor at an informal conference and the employee takes no further
19
action, however, the Commissioner does not make a final decision pursuant to
N.J.A.C. 12:56-1.6(d). ---
See N.J.A.C. 12:56-1.
C.
1.
The Legislature prescribed an absolute defense to liability, fees, or
penalties in minimum wage and overtime compensation matters under the
WHL for employers who plead and prove that they have proceeded in good
faith in conformity with and reliance on certain actions by the Department or
the Division. The good-faith defense is codified in N.J.S.A. 34:11-56a25.2,
which provides that
no employer shall be subject to any liability or
punishment for or on account of the failure of the
employer to pay minimum wages or overtime
compensation under this act, if he pleads and proves
that the act or omission complained of was in good faith
in conformity with and in reliance on 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 any administrative practice or
enforcement policy of such department or bureau with
respect to the class of employers to which he belonged.
Such a defense, if established, shall be a complete bar
to the action or proceeding, notwithstanding, that after
such act or omission, such administrative regulation,
order, ruling, approval, interpretation, practice, or
enforcement policy is modified or rescinded or is
20
determined by judicial authority to be invalid or of no
legal effect.
The WHL does not define the terms “written administrative regulation,”
“order,” “ruling,” “approval,” “interpretation,” “administrative practice,” or
“enforcement policy,” as those terms are used in N.J.S.A. 34:11-56a25.2.1 To
date, the Department has not promulgated regulations addressing N.J.S.A.
34:11-56a25.2’s good-faith defense.
2.
When it enacted the Portal-to-Portal Act, 29 U.S.C. §§ 251 to 262,
Congress prescribed a good-faith defense for certain employers exposed to
potential liability or penalties under the FLSA. 29 U.S.C. § 259(a) provides
that
no employer shall be subject to any liability or
punishment for or on account of the failure of the
employer to pay minimum wages or overtime
compensation under the Fair Labor Standards Act of
1938, as amended, the Walsh-Healey Act, or the Bacon-
Davis Act, if he pleads and proves that the act or
omission complained of was in good faith in conformity
with and in reliance on any written administrative
regulation, order, ruling, approval, or interpretation, of
1
Consistent with the plain language of N.J.S.A. 34:11-56a25.2, the WHL
generally defines the term “Commissioner” to denote “the Commissioner of
Labor and Workforce Development.” N.J.S.A. 34:11-56a1(a). It defines the
term “Director” to mean “the director in charge of the bureau referred to in
[N.J.S.A.] 34:11-56a2,” and thus to denote the Director of the Division of
Wage and Hour Compliance. N.J.S.A. 34:11-56a1(b).
21
the agency of the United States specified in subsection
(b) of this section, or any administrative practice or
enforcement policy of such agency with respect to the
class of employers to which he belonged. Such a
defense, if established, shall be a bar to the action or
proceeding, notwithstanding that after such act or
omission, such administrative regulation, order, ruling,
approval, interpretation, practice, or enforcement
policy is modified or rescinded or is determined by
judicial authority to be invalid or of no legal effect.
In addition to providing for an absolute defense in the event that the
employer meets the requirements of 29 U.S.C. § 259, Congress also enacted a
second good-faith provision that may impact the award of damages in a given
case. 29 U.S.C. § 260 provides that
if the employer shows to the satisfaction of the court
that the act or omission giving rise to such action was
in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation of
the Fair Labor Standards Act of 1938, as amended, the
court may, in its sound discretion, award no liquidated
damages or award any amount thereof not to exceed the
amount specified in [29 U.S.C. § 216].
Regulations promulgated by the United States Department of Labor
applying the Portal-to-Portal Act to the FLSA define and expand upon some of
the provisions’ critical terms. Under the federal regulations, “‘good faith’ is
not to be determined merely from the actual state of [the employer’s] mind,”
but “also depends upon an objective test -- whether the employer, in acting or
22
omitting to act as he did, and in relying upon the regulation, order, ruling,
approval, interpretation, administrative practice or enforcement policy, acted
as a reasonably prudent man would have acted under the same or similar
circumstances.” 29 C.F.R. § 790.15(a). Moreover, when an employer asserts
the good-faith defense under 29 U.S.C. § 259, “the regulation, order, ruling,
approval, interpretation, administrative practice or enforcement policy relied
upon and conformed with must be that of the ‘Administrator of the Wage and
Hour Division of the Department of Labor.’” 29 C.F.R. § 790.13(a). In
addition, “a regulation, order, ruling, approval, or interpretation of the
Administrator may be relied on only if it is in writing.” ----
Ibid.A federal regulation defines the terms “administrative regulations,”
“orders,” “rulings,” “approvals,” and “interpretations,” as those terms appear
in 29 U.S.C. § 259. 29 C.F.R. § 790.17. Another regulation explains the
phrase “administrative practice or enforcement policy” for purposes of 29
U.S.C. § 259. 29 C.F.R. § 790.18. Thus, federal regulations clarify the
meaning of those core statutory terms as they appear in the FLSA’s good-faith
defense provisions.
23
D.
1.
Against that backdrop, we construe and apply N.J.S.A. 34:11-56a25.2,
the WHL’s provision addressing the good-faith defense. We interpret the
provision in accordance with familiar principles of statutory construction. Our
“paramount goal” is to discern the Legislature’s intent. DiProspero v. Penn,
183 N.J. 477, 492 (2005). The best evidence of that legislative intent is the
statutory language, which is, accordingly, “the first place we look.”
Richardson v. Bd. of Trs., PFRS, 192 N.J. 189, 195 (2007). If the statute’s
plain language leads to a clearly understood result, the judicial inquiry is
complete. Ibid.; Felix v. Richards, 241 N.J. 169, 179 (2020) (noting that when
“language admits of only one clear interpretation,” the interpretive task ends
and the court enforces that meaning).
“[I]t is not our function to rewrite a plainly written statute or to presume
that the Legislature meant something other than what it conveyed in its clearly
expressed language.” Shipyard Assocs., LP v. City of Hoboken, 242 N.J. 23,
45 (2020) (quoting Murray v. Plainfield Rescue Squad, 210 N.J. 581, 592
(2012)). It is only when the statute’s language is ambiguous that we consider
legislative history and other extrinsic materials. Sanchez v. Fitness Factory
24
Edgewater, LLC, 242 N.J. 252, 261 (2020); Kean Fed’n of Tchrs. v. Morell,
233 N.J. 566, 583 (2018).
2.
When it enacted N.J.S.A. 34:11-56a25.2, the Legislature clearly
intended to demand more than a subjective showing by the employer that it
believed in good faith that its overtime compensation practices conformed to
the WHL.2 Indeed, the Legislature identified only two bases for the assertion
of a good-faith defense by an employer who has allegedly failed to pay
minimum wages or overtime compensation under the WHL. N.J.S.A. 34:11-
56a25.2. We consider each in turn.
Under the statute’s first prong, the employer may assert the good-faith
defense if “he pleads and proves that the act or omission complained of was in
good faith in conformity with and in reliance on any written administrative
2
In Frech, the Law Division held that a funeral home that had deemed certain
employees to be “professional” employees exempt from WHL overtime
compensation provisions was entitled to assert the good-faith defense based on
a regulatory definition of “professional” and compensation practices in the
funeral home industry. 185 N.J. Super. at 393-97. The court in Frech did not
apply N.J.S.A. 34:11-56a25.2’s plain language to determine whether the
employer had met the statutory test for the good-faith defense. Ibid. We agree
with the Appellate Division that N.J.S.A. 34:11-56a25.2 does not authorize a
court to assess the employer’s good faith based on the non-statutory factors on
which the court relied in Frech. See Branch, 459 N.J. Super. at 546-48; see
also Keeley v. Loomis Fargo & Co., 183 F.3d 257, 269 & n.9 (3d Cir. 1999)
(declining to follow Frech in construing N.J.S.A. 34:11-56a25.2).
25
regulation, order, ruling, approval or interpretation by the Commissioner . . . or
the Director.” Ibid. In N.J.S.A. 34:11-56a6, the Legislature empowered the
Commissioner, the Director, “and their authorized representatives” to
investigate potential violations of the WHL. In N.J.S.A. 34:11-56a25.2,
however, the Legislature limited the first prong of the good-faith defense to
determinations issued by the Commissioner and the Director themselves.
By the statute’s plain terms, the employer can assert good faith based on
pleading and proof of its conformity with and reliance on administrative
rulemaking. N.J.S.A. 34:11-56a25.2. A final decision of the Commissioner
pursuant to N.J.A.C. 12:56-1.6(d) following an adversarial proceeding before
the Office of Administrative Law (OAL) would also clearly constitute an
“order, ruling, approval or interpretation by the Commissioner” for purposes of
N.J.S.A. 34:11-56a25.2’s first prong. 3 The legislative intent to limit the
application of N.J.S.A. 34:11-56a25.2, however, is clear: to satisfy N.J.S.A.
34:11-56a25.2’s first prong, the employer must show compliance with and
3
We do not concur with the Appellate Division that only two categories of
enforcement determinations -- the Commissioner’s final agency decision
rendered after an OAL hearing or a Wage Collection Referee’s final
determination of a complaint filed with the Wage Collection Division under
N.J.S.A. 34:11 -- could ever meet the requirements of N.J.S.A. 34:11-
56a25.2’s first prong. See Branch, 459 N.J. Super. at 548. We need not
decide in this appeal whether additional categories of determinations pursuant
to the WHL may satisfy the statutory test.
26
reliance on a regulation or an order, ruling, approval, or interpretation by the
Commissioner or the Director, not determinations by those officials’
subordinate employees.
Under N.J.S.A. 34:11-56a25.2’s second prong, the employer may assert
the good-faith defense if “he pleads and proves that the act or omission
complained of was in good faith in conformity with and in reliance on . . . any
administrative practice or enforcement policy of such department or bureau
with respect to the class of employers to which he belonged.” We concur with
the Attorney General on the import of that provision: the statute mandates a
Department practice or policy applying the WHL to a “class of employers” and
their employees, not to adjudications of individual complaints against a given
employer.
Finally, N.J.S.A. 34:11-56a25.2’s plain language requires that the
employer plead and prove that at the time of the act or omission that gives rise
to the potential liability or sanction, it relied on the cited authority, whether in
the form of an “administrative regulation, order, ruling, approval or
interpretation” under prong one, or an “administrative practice or enforcement
policy” under prong two. Accordingly, an employer may not assert the good-
faith defense under either prong of N.J.S.A. 34:11-56a25.2 based on its
27
conformity with a determination by the Department if it cannot prove reliance
on that determination.
3.
We thus concur with the Appellate Division with respect to the
application of N.J.S.A. 34:11-56a25.2’s plain language to this appeal. We do
not view the three prior decisions cited by defendant, or the 2006 Opinion
Letter invoked by defendant on appeal, to meet either prong of the statutory
test.
The 2007 decision in defendant’s favor by a hearing and review officer
did not constitute a “written administrative regulation, order, ruling, approval
or interpretation by the Commissioner . . . or the Director” and thus does not
meet the standard prescribed in the first prong of N.J.S.A. 34:11-56a25.2.
Because the matter was resolved in defendant’s favor at a conference and was
then closed, it never proceeded to a hearing before an Administrative Law
Judge and did not give rise to a final determination by the Commissioner. ---
See
N.J.A.C. 12:56-1.6(c), (d) (prescribing procedure for determination when a
dispute over an administrative penalty is not resolved at a conference).
Moreover, defendant’s 2007 WHL matter did not give rise to a Department or
Division “administrative practice or enforcement policy” regarding the “class
28
of employers” to which defendant belonged and thus fails to satisfy the second
prong of N.J.S.A. 34:11-56a25.2.
For the same reasons, the 2014 decision by a senior investigator and the
2017 determination by a section chief also fall short of the statutory mark.
Neither decision was issued by the Commissioner or the Director; neither
constituted an administrative practice or enforcement policy addressing the
class of employers to which defendant belonged. N.J.S.A. 34:11-56a25.2.
The 2006 Opinion Letter, in contrast, constitutes a written
“interpretation” by the Director of the WHL’s application to overtime
compensation in the trucking industry. That letter, signed by the Director,
states the Division’s “practice or enforcement policy” with regard to that
“class of employers,” thus implicating both prongs of N.J.S.A. 34:11-56a25.2.
The 2006 Opinion Letter, however, does not support defendant’s assertion of
the good-faith defense. It was not issued to defendant, and it apparently
addressed a matter unrelated to this appeal. Defendant never asserted, let
alone pled and proved, that it relied on that Opinion Letter when it determined
the overtime compensation of plaintiff and the putative class.
In short, we agree with the Appellate Division that defendant has not
met the requirements of the good-faith defense under N.J.S.A. 34:11-56a25.2.
We hold that the trial court improperly granted summary judgment in
29
defendant’s favor and denied plaintiff’s motion for reconsideration. We
concur with the Appellate Division that this matter should be remanded for
further proceedings in which defendant will have the opportunity to prove that
it is a trucking-industry employer entitled to invoke N.J.S.A. 34:11-56a4(f)’s
exception to WHL overtime requirements, and the trial court will determine
whether defendant complied with the WHL overtime provisions in
compensating its employees.
E.
We recognize that the plain language of N.J.S.A. 34:11-56a25.2 leaves
an employer such as defendant in a difficult position. Having prevailed in
three disputes that ended at an early stage, defendant was afforded no
procedural route to secure a ruling by the Commissioner or Director with
respect to those determinations. ---
See N.J.A.C. 12:56-1.6(c), (d). Although the
Department communicated to defendant three times in the span of a decade
that it was a trucking-industry employer exempt from the WHL’s general
overtime requirements under N.J.S.A. 34:11-56a4(f), defendant was not
entitled to assert the good-faith defense based on those determinations.
Consistent with the Legislature’s intent when it enacted the WHL’s
good-faith defense, we respectfully suggest that the Department develop a
procedure whereby an employer can seek an opinion letter or other ruling from
30
the Commissioner or Director regarding a claimed exemption from the WHL’s
overtime requirements. Such a procedure would assist employers who intend
in good faith to comply with their obligations under the WHL, clarify the
employer’s obligations under the WHL, and avoid unnecessary litigation.
We also suggest that the Legislature and the Department determine
whether additional statutory and/or regulatory guidance should be provided to
employers and employees regarding the good-faith defense in WHL
proceedings. In that regard, the Legislature may consider the approach to the
good-faith defense in certain FLSA proceedings adopted by Congress in 29
U.S.C. §§ 259 and 260. We also suggest that the Department consider
adopting regulations clarifying the meaning of N.J.S.A. 34:11-56a25.2’s
critical terms, as the United States Department of Labor defined the core terms
of 29 U.S.C. § 259 in 29 C.F.R. §§ 790.13 to 790.19.
IV.
The judgment of the Appellate Division is affirmed as modified, and the
matter is remanded to the trial court for further proceedings consistent with
this opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
FERNANDEZ-VINA, SOLOMON, and PIERRE-LOUIS join in JUSTICE
PATTERSON’s opinion.
31