ELMER BRANCH, ETC. VS. CREAM-O-LAND DAIRY (L-4744-16, HUDSON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1313-17T1
ELMER BRANCH, on behalf of
himself and all other similarly
situated persons,
APPROVED FOR PUBLICATION
Plaintiff-Appellant, June 19, 2019
APPELLATE DIVISION
v.
CREAM-O-LAND DAIRY,
Defendant-Respondent.
_____________________________
Argued March 11, 2019
Before Judges Sabatino, Sumners and Mitterhoff.
Reargued May 13, 2019 1 – Decided June 19, 2019
Before Judges Sabatino, Sumners and Mitterhoff.
On appeal from Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-4744-16.
Ravi Sattiraju argued the cause for appellant (The
Sattiraju Law Firm, PC, attorneys; Ravi Sattiraju, of
1
The appeal was reargued to enable the Attorney General's participation. The
Attorney General appeared at the second oral argument. Judge Sumners heard
the first oral argument, but did not hear the second oral argument. The parties
have consented to the addition of Judge Sumners to the panel without the need
for further oral argument.
counsel and on the briefs; Anthony Santos Almeida,
on the briefs).
Mark E. Tabakman argued the cause for respondent
(Fox Rothschild LLP, attorneys; Mark E. Tabakman,
of counsel and on the briefs; Ian Warren Siminoff, on
the briefs).
Caroline G. Jones, Deputy Attorney General, argued
the cause for amicus curiae State of New Jersey
(Gurbir S. Grewal, Attorney General, attorney; Donna
Sue Arons, Assistant Attorney General, of counsel;
Caroline G. Jones, on the brief).
The opinion of the court was delivered by
MITTERHOFF, J.S.C. (temporarily assigned).
Plaintiff Elmer Branch and the putative class of similarly situated truck
drivers appeal the trial court's grant of summary judgment in favor of
defendant Cream-O-Land Dairy ("COL") and dismissal of their class-action
complaint alleging a failure to pay overtime wages in violation of the New
Jersey Wage and Hour Law ("WHL"), N.J.S.A. 34:11-56a to -56a38. The trial
court determined that defendant was entitled to the WHL's good-faith defense,
N.J.S.A. 34:11-56a25.2, based on its reliance on three determinations made by
the New Jersey Department of Labor and Workforce Development ("DOL")
officials in response to complaints brought by individual employees.
Having reviewed the contentions advanced on appeal in light of the
applicable legal principles, we hold that such discrete determinations by DOL
A-1313-17T1
2
officials, which are subject to further administrative appeal, do not constitute
an "administrative practice or enforcement policy" and are insufficient to
invoke the good-faith defense. N.J.S.A. 34:11-56a25.2. Accordingly, we
reverse the trial court's grant of summary judgment and remand for further
proceedings.
I.
A.
On November 29, 2016, plaintiff filed a putative class action complaint
in the Law Division against COL. The class is defined to include: "All
individuals that performed truck driving functions in the State of New Jersey
for [d]efendant[] from 2014 to present." Plaintiff alleged that the class
members worked approximately sixty to eighty hours per week without being
paid one-and-one-half times their hourly rates for hours worked in excess of
forty hours per week in violation of the WHL. See N.J.S.A. 34:11-56a4(b)(1).
Defendant answered the complaint, denying the allegations and
asserting, among other defenses, the statutory good-faith defense. See
N.J.S.A. 34:11-56a25.2. After the parties exchanged some written discovery,
on August 4, 2017, defendant moved for summary judgment on the grounds
that it was immunized from liability under the good-faith defense. At the time
of the motion, the discovery end date was scheduled to elapse on November
A-1313-17T1
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16, 2017, and the discovery end date had not been previously extended. In
support of its entitlement to the good-faith defense, defendant cited to three
determinations made by DOL officials in response to employee complaints
involving COL.
First, John Callahan, a hearing and review officer in the DOL's Division
of Wage and Hour Compliance, issued a handwritten investigation report dated
July 27, 2007. The report stemmed from a complaint by a truck driver
employed by COL alleging a failure to pay appropriate overtime wages. After
"a full field investigation and internal review," the DOL initially assessed a
penalty of $40,000 for failure to pay overtime wages. Following an
administrative appeal by COL, however, Callahan conducted an informal
settlement conference with COL. As a result of the conference, Callahan
issued his report and overturned the penalty. The report determined that COL
was considered a "trucking industry employer" and was required only to pay
its drivers one-and-one-half times the state minimum wage for overtime hours.
See N.J.S.A. 34:11-56a4(f). The report concluded that COL was meeting this
requirement.
Second, in June 2014, counsel for COL emailed Santiago Zayas, then a
senior investigator for the DOL, asking if any follow-up was needed from COL
regarding an investigation of an employee's overtime complaint. Zayas replied
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via email, stating in full: "It's been determined that [COL] falls under the
Federal Trucking guidelines of overtime exemption. The claimant was briefed
of our finding, and referred to the [United States Department of Labor] for
questions and concerns."
Third, in April 2017, COL's counsel emailed David Schraeger, then
section chief of the Division of Wage and Hour Compliance, inquiring about
the status of a truck driver's overtime complaint. Schraeger replied via email,
stating:
The inspection report indicated that [COL] is
considered a transportation company rather than a
dairy. Since the complainant consistently made above
1 1/2 times minimum wage – currently $8.44 – which
equals $12.66 – per hour, we did not find the company
to be in violation of [the] law at this time. We have
sent the complainant a letter advising him of his right
to pursue his claim at a formal [w]age [c]ollection
proceeding, but he has not replied. The complaint has
to be a moving party in order for a [w]age [c]ollection
proceeding to go forward. Failing to hear from him,
we shall take no further action on this matter at this
time.
Defendant also provided two certifications in support of its motion for
summary judgment. Scott Stoner, the vice president of operations for COL,
certified that COL has a fleet of over 200 trucks that "warehouse[] and
convey[] . . . refrigerated and non-refrigerated products (including but not
limited to milk, dairy, juice, and non-dairy products, mechanical plastic, and
A-1313-17T1
5
baked products) from one place to another by highway[.]" Stoner emphasized:
"The company does not manufacture or produce any products. It owns no
dairy farms, and does not produce any of the products in delivers." Stoner
noted that there are products affixed with the COL label, but "that is done for
branding/logistical purposes, and/or at customer request."
Michael P. McCarthy, an employee of the DOL for thirty-seven years
and the former Director of the Division of Wage and Hour Compliance,
certified as to the qualifications of the individuals involved in the DOL's three
previous investigations of COL. He certified that "COL has justifiably and in
good faith, relied upon the results of these three (3) investigations as
contemplated by N.J.S.A. 34:11-56a25.2."
Plaintiff opposed the motion for summary judgment, primarily
contending that the three informal determinations relied on by COL were
insufficient to entitle it to the good-faith defense. Plaintiff also argued that
defendant's motion was premature because discovery was outstanding and
requested the opportunity to depose Stoner and McCarthy regarding the
veracity of their certifications. On September 7, 2017, following oral
argument, the trial court granted summary judgment in favor of COL and
dismissed the complaint with prejudice based on the good-faith defense. The
trial court reasoned that the three investigations and determinations by the
A-1313-17T1
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DOL were adequate to establish an "enforcement policy" with respect to COL's
industry, thereby entitling COL to the good-faith defense. The trial court did
"not make any substantive determinations regarding defendant's status as a
trucking industry employer . . . [because] it need not for purposes of
determining that the good-faith defense applies."
Plaintiff moved for reconsideration, asserting that the class members
were entitled to "trucking industry overtime" at the rate of one-and-one-half
times the minimum wage even if the good-faith defense barred the claim for
regular overtime. See N.J.S.A. 34:11-56a4(f). On October 27, 2017,
following oral argument, the trial court denied reconsideration. It reasoned
that the class members were entitled to one-and-one-half times the minimum
wage for each hour worked and that COL met this requirement by
compensating plaintiff with a flat rate of $180 per day.
B.
Plaintiff appealed from the trial court's orders granting summary
judgment and denying reconsideration. On March 11, 2019, we held oral
argument in this appeal. Following oral argument, defendant filed a motion to
supplement the record with a June 19, 2006 opinion letter from McCarthy, who
at that time was the Director of the Division of Wage and Hour Compliance.
Plaintiff opposed the motion.
A-1313-17T1
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The 2006 opinion letter was sent by McCarthy to an attorney in response
to a "fax inquiry on the acceptable method of computation for 'day rate
employees' in the trucking industry." The letter does not reference any
employer, nor does defendant certify that the letter was provided in response to
an inquiry by COL. The letter generally sets forth the formulas used by the
Division of Wage and Hour Compliance to determine compliance with the
WHL for non-exempt employees and trucking industry employees. The letter
also provides a brief history of the trucking industry employer overtime
requirements in New Jersey.
On March 26, 2019, we granted defendant's motion to supplement the
record and indicated that "[t]he supplemental materials will be considered by
the court to the extent it may find them relevant." We also invited the
Attorney General to participate as amicus curiae with respect to the State's
interpretation of the good-faith defense. The Attorney General accepted the
invitation and filed a letter brief on April 26, 2019. The parties each
responded to the Attorney General's brief on May 6, 2019. On May 13, 2019,
we again held oral argument with the Attorney General appearing as amicus.
II.
A.
On appeal, plaintiff raises the following points for our review:
A-1313-17T1
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POINT I: THE TRIAL COURT ERRED IN
DETERMINING THAT DEFENDANT COL COULD
AVAIL ITSELF OF THE [WHL]'S "GOOD FAITH"
DEFENSE IN THIS ACTION.
A. The [WHL] Is a Remedial and Humanitarian
Legislation That Must Be Construed Liberally to
Effectuate Its Purpose of Prohibiting Employers
From Evading Their Obligations.
B. Defendant COL's Purported "Proofs" Do Not
Establish Applicability of the [WHL]'s "Good
Faith" Defense As a Matter of Law.
C. The Trial Court Erred In Relying Upon State v.
Frech Rather than Keely v. Loomis.
D. Guidance From the Federal Courts Construing
the [Fair Labor Standards Act]'s "Good Faith"
Defense Supports Plaintiff's Position That
Defendant COL Should Not Be Able to Avail
Itself of the [WHL]'s "Good Faith" Defense.
POINT II: THE TRIAL COURT SHOULD HAVE
ALLOWED PLAINTIFF THE OPPORTUNTIY TO
DEPOSE MESSRS. STONER AND McCARTHY
PRIOR TO ENTERING SUMMARY JUDGMENT
AND DISMISSING PLAINTIFF'S COMPLAINT.
POINT III: EVEN IF THE [WHL]'S "GOOD FAITH"
DEFENSE APPLIES, THE TRIAL COURT ERRED
IN DISMISSING PLAINTIFF'S COMPLAINT IN
TOTO BECAUSE PLAINTIFF WOULD STILL
HAVE A VIABLE CLAIM FOR UNPAID
"TRUCKING INDUSTRY OVERTIME."
In addition, plaintiff argues that defendant is not entitled to the good -
faith defense based on the 2006 opinion letter because: (1) the letter was not
A-1313-17T1
9
part of the summary judgment record; (2) there is no evidence in the record
supporting that COL actually relied on the letter; and (3) the trial court's ruling
on the good-faith defense did not involve a determination of the actual
compensation paid by COL to plaintiff and the putative class of truck drivers
during the relevant time period. For these reasons, plaintiff maintains that the
2006 opinion letter is irrelevant to the issues on appeal.
Defendant contends that the three previous DOL determinations
constitute an enforcement policy upon which it reasonably relied and are
sufficient to invoke the good-faith defense. Defendant similarly argues that
the 2006 opinion letter represents the DOL's enforcement policy. Defendant
also argues that federal case law interpreting the good-faith defense under the
Fair Labor Standards Act ("FLSA") 2 supports its entitlement to the good-faith
defense. Finally, defendant maintains: (1) no additional discovery would
affect its entitlement to the good-faith defense; and (2) the good-faith defense
is absolute, obviating the need to address whether COL met the definition of a
trucking industry employer and paid its truck drivers one-and-one-half times
the minimum wage for hours worked over forty.
The Attorney General argues that the three initial determinations relied
on by COL do not meet the requirements for establishing the good-faith
2
Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 to 219.
A-1313-17T1
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defense. The Attorney General notes that the three initial determinations arose
from the early stages of the Division of Wage and Hour Compliance's
investigations into discrete matters and were subject to further administrative
appeal or the employee brining a wage collection proceeding. As such, the
Attorney General contends, the three initial determinations "are not high -level
final determinations that carry the imprimatur of the agency head, as is
required to establish the good-faith defense." The Attorney General maintains
that in terms of the DOL's enforcement investigations, only the
Commissioner's final decisions rendered after an OAL hearing are sufficient to
invoke the good-faith defense. The Attorney General argues that even taken
together, the three initial determinations do not constitute an "administrative
practice or enforcement policy . . . with respect to the class of employers
which he belonged[,]" N.J.S.A. 34:11-56a25.2, because the determinations
clearly were not intended to "apply uniformly or automatically to a particular
industry; they were discrete communications by subordinate members of the
department regarding investigations based on information received from the
employer."
On the other hand, the Attorney General argues that the 2006 opinion
letter would be sufficient to invoke the good-faith defense because it "broadly
discussed the Division's policy and interpretation of the law as a whole . . . and
A-1313-17T1
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described the means by which the [DOL] determined compliance with the
WHL." The Attorney General contends that "[o]n its face, the letter reflects an
interpretation of the law that applies to an entire class of employers or
employees." Although the Attorney General notes that the 2006 opinion lett er
offers the DOL's interpretation of the WHL at the time it was issued, the
Attorney General declines to take a position on whether the 2006 opinion letter
reflects the DOL's current interpretations and policies. The Attorney General
also declines "to take a position on whether defendant[] can demonstrate that
[it is] a 'trucking industry employer' or [is] currently in compliance with the
WHL with respect to the plaintiffs or any other employee."
B.
We review a grant of summary judgment de novo, applying the same
standard as the trial court. Henry v. N.J. Dep't of Human Servs., 204 N.J. 320,
330 (2010). The court considers whether "the competent evidential materials
presented, when viewed in the light most favorable to the non-moving party,
are sufficient to permit a rational factfinder to resolve the alleged disputed
issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of
Am., 142 N.J. 520, 540 (1995); see R. 4:46-2(c).
Although Rule 4:46-1 permits a party to move for summary judgment
before the close of discovery, "[g]enerally, summary judgment is inappropriate
A-1313-17T1
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prior to the completion of discovery." Wellington v. Estate of Wellington, 359
N.J. Super. 484, 496 (App. Div. 2003) (citing Velantzas v. Colgate-Palmolive
Co., 109 N.J. 189, 193 (1988)). A party opposing a motion for summary
judgment on the grounds that discovery is incomplete, however, must
"demonstrate with some degree of particularity the likelihood that further
discovery will supply the missing elements of the cause of action." Badiali v.
New Jersey Mfrs. Ins. Grp., 220 N.J. 544, 555 (2015) (quoting Wellington, 359
N.J. Super. at 496); see also Trinity Church v. Lawson-Bell, 394 N.J. Super.
159, 166 (App. Div. 2007).
We review the denial of a motion for reconsideration for an abuse of
discretion. Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996).
Reconsideration should be granted only where "either 1) the [c]ourt has
expressed its decision based upon a palpably incorrect or irrational basis, or 2)
it is obvious that the [c]ourt either did not consider, or failed to appreciate the
significance of probative, competent evidence[.]" Id. at 384 (quoting D'Atria
v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).
Whether defendant is entitled to the GFD turns on the statutory
interpretation of the WHL. We review issues of statutory construction de
novo. Cashin v. Bello, 223 N.J. 328, 335 (2015).
A-1313-17T1
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III.
A.
In addressing the issues presented by this appeal, we adhere to well-
established principles of statutory interpretation. "The Legislature's intent is
the paramount goal when interpreting a statute and, generally, the best
indicator of that intent is the statutory language." DiProspero v. Penn, 183
N.J. 477, 492 (2005). In considering the statutory language, "an appellate
court must read words 'with[in] their context' and give them 'their generally
accepted meaning.'" Cashin, 223 N.J. at 335 (alteration in original) (quoting
N.J.S.A. 1:1-1); see also DiProspero, 183 N.J. at 492 ("We ascribe to the
statutory words their ordinary meaning and significance, and read them in
context with related provisions so as to give sense to the legislation as a
whole." (citations omitted)).
When a statute's plain language lends to only one interpretation, a court
should not consider "extrinsic interpretative aids." DiProspero, 183 N.J. at 492(quoting Lozano v. Frank DeLuca Constr., 178 N.J. 513, 522 (2004)). "On the
other hand, if there is ambiguity in the statutory language that leads to more
than one plausible interpretation, we may turn to extrinsic evidence, 'including
legislative history, committee reports, and contemporaneous construction.'"
A-1313-17T1
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Id. at 492-93 (quoting Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64, 75
(2004)).
In addition, although we are not ultimately bound by an agency's
statutory interpretation, "[g]enerally, courts afford substantial deference to an
agency's interpretation of a statute that it is charged with enforcing." Univ.
Cottage Club of Princeton New Jersey Corp. v. New Jersey Dep't of Envtl.
Prot., 191 N.J. 38, 48 (2007); see also Merin v. Maglaki, 126 N.J. 430, 436-37
(1992) ("We give substantial deference to the interpretation of the agency
charged with enforcing an act. The agency's interpretation will prevail
provided it is not plainly unreasonable."). Pursuant to the WHL, the DOL
established the Division of Wage and Hour Compliance to administer and
enforce the WHL. See N.J.S.A. 34:11-56a2; N.J.A.C. 12:56-1.1; N.J.A.C.
12:56-2.1.3 Accordingly, although we are not bound by the Attorney General's
interpretation of the WHL, "it is nonetheless entitled to a degree of deference,
in recognition of the Attorney General's special role as the sole legal adviser to
most agencies of State Government," including the DOL. Quarto v. Adams,
3
The statute refers to the "Wage and Hour Bureau," see, e.g., N.J.S.A. 34:11-
56a2; N.J.S.A. 34:11-56a25.2, but the DOL's regulations currently designate
that division as the "Division of Wage and Hour Compliance." N.J.A.C.
12:56-2.1 ("'Division of Wage and Hour Compliance' means Division of Wage
and Hour Compliance of Labor Standards and Safety Enforcement of the New
Jersey State Department of Labor and Workforce Development[.]").
A-1313-17T1
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395 N.J. Super. 502, 513 (App. Div. 2007) (citing N.J.S.A. 52:17A-4(e)); see
also Peper v. Princeton Univ. Bd. of Trs., 77 N.J. 55, 70 (1978); Bd. of Educ.
of W. Windsor-Plainsboro Reg'l Sch. Dist. v. Bd. of Educ. of Delran, 361 N.J.
Super. 488, 493-94 (App. Div. 2003).
B.
We begin our analysis with the legislative purpose of the WHL. "The
WHL is designed 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)).
To further this goal, "[t]he WHL establishes not only a minimum wage but
also an overtime rate for each hour of work in excess of forty hours in any
week for certain employees." Ibid. (citing N.J.S.A. 34:11-56a4). "The
remedial purpose of the [WHL] dictates that it should be given a liberal
construction." New Jersey Dep't of Labor v. Pepsi-Cola Co., 170 N.J. 59, 62
(2001); see also Hargrove, 220 N.J. at 304 ("The [WHL] should be construed
liberally to effectuate its purpose.").
The WHL's remedial purposes also dictates "that all exemptions to
N.J.S.A. 34:11-56a4 should be construed narrowly[.]" Marx v. Friendly Ice
Cream Corp., 380 N.J. Super. 302, 310 (App. Div. 2005); see also Raymour &
Flanigan, 405 N.J. Super. at 376 ("Given the humanitarian purpose of the
A-1313-17T1
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[WHL] we construe the [trucking industry employer] exemption narrowly, not
broadly."); Yellow Cab Co. of Camden v. State Through Dir. of Wage & Hour
Bureau, 126 N.J. Super. 81, 86 (App. Div. 1973) ("The humanitarian and
remedial nature of [the WHL] requires that any exemption therefrom be
narrowly construed, giving due regard to the plain meaning of the statutory
language and the intent of the Legislature."). 4
Turning to the relevant statutory text, N.J.S.A. 34:11-56a25.2 sets forth
the good-faith defense:
In any action or proceeding commenced prior to or on
or after the date of the enactment of this act based on
any act or omission prior to or on or after the date of
the enactment of this act, 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
[DOL] 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
4
Defendant contends that we are not required to narrowly construe the good -
faith defense because it is not an "actual overtime exemption" such as the
executive exemption or the administrative exemption. We find this argument
unavailing. Because the good-faith defense provides a total bar on liability for
violations of the WHL, it clearly operates as an exemption to the WHL's
requirements. See Black's Law Dictionary 653 (9th ed. 2014) (defining
"exemption" as "[f]reedom from a duty, liability, or other requirement; an
exception.").
A-1313-17T1
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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
determined by judicial authority to be invalid or of no
legal effect.
In construing this provision's plain language in accordance with the
legislative purpose of the WHL, it is useful to consider the administrative
structure by which the DOL enforces the WHL. Under the WHL, the
Commissioner of the DOL, the Director of the Division of Wage and Hour
Compliance, and their authorized representatives have the authority to
investigate potential wage and hour violations by collecting and inspecting
relevant information from employers. See N.J.S.A. 34:11-56a6. The DOL
may initiate an investigation into possible wage and hour violations from
either an employee's complaint or from the DOL's own audit. See N.J.S.A.
34:11-56a25.1. At the conclusion of an investigation, the Division of Wage
and Hour Compliance makes a determination as to whether the employer has
violated the WHL, and if so, whether to assess wages, penalties, or fees.
N.J.A.C. 12:56-1.2 to -1.4.
Within fifteen days of receiving an assessment letter from the Division
of Wage and Hour Compliance, an employer may request a formal hearing.
N.J.S.A. 34:11-56a22; N.J.A.C. 12:56-1.3(b). When an employer requests a
A-1313-17T1
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formal hearing, the Division of Wage and Hour Compliance considers whether
the matter could be resolved at an informal settlement conference. N.J.A.C
12:56-1.6(c).5 If no settlement conference is held or no resolution is reached at
the conference, the Division transmits the matter to Office of Administrative
Law ("OAL"). Ibid. In accordance with the procedures of the Administrative
Procedures Act, a full record is developed and the Commissioner of the DOL
renders a final agency decision. N.J.S.A. 34:11-56a22; N.J.A.C. 12:56-1.6(d).
The Commissioner's final agency decision is appealable to the Appellate
Division. N.J.A.C. 12:56-1.6(e).
The employee is not a party to an enforcement action at any stage,
including in the OAL. If the Division of Wage and Hour Compliance declines
to pursue an enforcement action, it may refer the employee to the DOL's Wage
Collection Division to pursue the complaint before a Wage Collection Referee
within the DOL. See N.J.S.A. 34:11-58; N.J.S.A. 34:11-59; N.J.A.C. 12:61-
1.3. An employee may appeal a decision of a Wage Collection Referee to the
5
The Attorney General notes that a hearing officer will conduct the informal
settlement conference, that employees do not participate in conference, and
that the employer may provide additional information or clarification of the
circumstances giving rise to the assessment at the conference. The hearing
officer may close the case if a settlement is reached or if the Division of Wage
and Hour Compliance decides to take no further action based on the
information provided.
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Law Division and receive de novo review. See Iliadis v. Wal-Mart Stores,
Inc., 191 N.J. 88, 116 (2007) (citing N.J.S.A. 34:11-63).
C.
"New Jersey case law is virtually nonexistent on the requirements of that
state's good-faith defense to a failure to pay statutory overtime rates[.]"
Keeley v. Loomis Fargo & Co., 183 F.3d 257, 271 (3d Cir. 1999). Indeed, no
published appellate opinions address the application of the good-faith defense
or interpret N.J.S.A. 34:11-56a25.2.6 In finding that defendant was entitled to
the good-faith defense, the trial court relied on the Law Division's decision in
State v. Frech Funeral Home, 185 N.J. Super. 385 (Law Div. 1982). Plaintiff
argues that the trial court should have rejected the reasoning of Frech and
instead relied on the Third Circuit Court of Appeal's reasoning in Keeley.
Frech addressed whether a mortician's trainee should be exempted from
the WHL's requirements based on employment in a "bona fide professional
6
In the absence of precedential New Jersey cases, both parties invoke federal
precedent interpreting the FLSA's good-faith defense. See 29 U.S.C. § 259.
Because we focus on the plain language and the legislative purpose of the
WHL, we find it unnecessary to rely on the federal precedent cited by the
parties. Moreover, although 29 U.S.C. § 259 contains largely identical
language to N.J.S.A. 34:11-56a25.2, the United States Department of Labor
has also enacted regulations addressing the good-faith defense under the
FLSA. See 29 C.F.R. §§ 790.13 to 790.19. The New Jersey DOL has not
promulgated analogous regulations under the WHL.
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capacity." 185 N.J. Super at 387.7 The court determined that the defendant
was entitled to the good-faith defense based on its reliance on the regulations
defining "professional" under the WHL and the statute and regulations
addressing the practice of mortuary science. See id. at 393-97. In so holding,
the court reasoned that a "defendant need not be correct in its belief that its
employees work in a bona fide professional capacity. [The defendant] need
only plead and prove that in good faith it reasonably believes that to be the
fact." Id. at 397. In the instant matter, because defendant is not relying on the
DOL's regulations to support the application of the good-faith defense, we find
that Frech provides little persuasive authority.
In Keeley, the Third Circuit called into doubt the reasoning in Frech
because it "appeared to ignore the requirement that good faith be based on a
written regulations, order, etc." 183 F.3d at 269. The Third Circuit addressed
whether an employer was entitled to the good-faith defense based on its
reliance on an industry-wide practice of not paying overtime wages to truck
drivers. Id. at 269-73.8 The Third Circuit remanded for reconsideration of
7
The defendant funeral home was charged in municipal court for failing to
pay overtime wages as required by N.J.S.A. 34:11-56a4.
8
In 1996, the DOL enacted a regulation that established trucking industry
overtime at one-and-one-half times the minimum wage. Id. at. 262. The Third
Circuit struck down the regulation because the Commissioner exceeded his
(continued)
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21
whether the employer was entitled to the good-faith defense. Id. at 272. The
court reasoned that "New Jersey's good-faith defense is clearly unavailable
when an employer is not relying on one of the enumerated sources in the
statute, such as a regulation, practice, or policy of the state labor agency[,]"
and that "good faith is absent when the employer fails to investigate a law's
requirements, or simply relies on a longstanding practice (of either the
employer itself or its industry) of failing to pay overtime or on union
acquiescence in such failure." Id. at 271. We agree with the Third Circuit's
well-reasoned analysis, but find that Keeley is not analogous to the instant
matter because COL was not relying on a longstanding industry practice or
union acquiescence in asserting the good-faith defense.
D.
With this background regarding the WHL and the good-faith defense in
mind, we turn to the questions presented in this appeal. When considered in
the context of WHL's enforcement structure, we agree with the Attorney
General that in terms of the DOL's enforcement investigations, only either the
(continued)
statutory authority in enacting the regulation. Id. at 268. "In response to
Keeley, the Legislature amended the Wage and Hour Law to include the
trucking industry employer exemption" as currently codified in N.J.S.A.
34:11-56a4(f). Raymour & Flanigan, 405 N.J. Super. at 378 (citing L. 1999, c.
370).
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Commissioner's final agency decision rendered after an OAL hearing or a
Wage Collection Referee's final decision qualifies as a "written administrative
regulation, order, ruling, approval or interpretation by the Commissioner of the
[Department of Labor and Workforce Development] or the Director of the
Wage and Hour Bureau[.]" N.J.S.A. 34:11-56a25.2. This interpretation is
consistent with both the plain language of N.J.S.A. 34:11-56a25.2 and the
enforcement structure of the WHL. Accordingly, the three initial
determinations relied on by defendant do not serve as a basis for the good -faith
defense under this portion of N.J.S.A. 34:11-56a25.2.
The second portion of N.J.S.A. 34:11-56a25.2, that an employer relied
on "any administrative practice or enforcement policy of such department or
bureau with respect to the class of employers to which he belonged," is more
distinctly at issue in this appeal. We read this statutory language sensibly
alongside the first portion of N.J.S.A. 34:11-56a25.2 and the WHL's
enforcement provisions. See DiProspero, 183 N.J. at 492. We also construe
this language narrowly as an exception to the WHL's requirements. See Marx,
380 N.J. Super. at 310.
Applying these principles of statutory construction, we agree with
plaintiff and Attorney General that the three initial determinations do not
constitute an "administrative practice or enforcement policy" because they do
A-1313-17T1
23
not carry the imprimatur of the agency head. The three initial determinations
addressed discrete complaints by individual employees based on information
received from the employer. They were not espousing a general policy that
applied broadly to a class of employers. Furthermore, the determinations by
lower-level representatives of the DOL were subject to further administrative
appeal and thus are not comparable to the final agency decisions that would
suffice under the first portion of N.J.S.A. 34:11-56a25.2. Most importantly, to
the extent the second portion of the exception may be susceptible to more than
one interpretation, the exception must be construed narrowly in light of the
remedial purpose of the WHL. See Marx, 380 N.J. Super. at 310; Raymour &
Flanigan, 405 N.J. Super. at 376; Yellow Cab, 126 N.J. Super. at 86. Finally,
we accord deference to the Attorney General's interpretation of this provision
of the WHL. See Univ. Cottage Club, 191 N.J. at 48; Quarto, 395 N.J. Super.
at 513.
For all of these reasons, we hold that discrete determinations or
communications by DOL officials regarding complaints by individual
employees, which are subject to further administrative appeal, do not
constitute an "administrative practice or enforcement policy" and are
A-1313-17T1
24
insufficient to invoke the good-faith defense. N.J.S.A. 34:11-56a25.2.9
Accordingly, the trial court improvidently granted summary judgment to
defendant based on its reliance on the three previous DOL determinations.
Turning to the 2006 opinion letter, we find that the letter constitutes an
"administrative practice or enforcement policy" sufficient to support a good-
faith defense. N.J.S.A. 34:11-56a25.2. In general, agencies offer this sort of
informal guidance through means such as opinion letters, bulletins, and
internal memoranda. See Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123,
136-37 (2001) ("Although not easily defined, informal agency action is any
determination that is taken without a trial-type hearing, including
investigating, publicizing, negotiating, settling, advising, planning, and
supervising a regulated industry."). Courts give deference to agencies'
informal interpretations. See Estate of F.K. v. Div. Of Med. Assistance And
Health Servs., 374 N.J. Super. 126, 141 (App. Div. 2005) (citing Skidmore v.
Swift & Co., 323 U.S. 134, 140 (1944)).
The 2006 opinion letter constitutes such informal guidance and
expresses the Division of Wage and Hour Compliance's interpretation of the
9
Although we reach our conclusion based on the plain language of N.J.S.A.
34:11-56a25.2, we also note that the WHL's legislative history does not
contain any amendments or comments regarding the good-faith defense. See
L. 1967, c. 216, § 2.
A-1313-17T1
25
appropriate methods to calculate overtime wages for both non-exempt
employees and trucking industry employees. In other words, the letter
distinctly represents the Division's "administrative practice or enforcement
policy . . . with respect to [a] class of employers." N.J.S.A. 34:11-56a25.2.
Based on the plain language of the statute, and giving deference to the
Attorney General's interpretation of the WHL, see Univ. Cottage Club, 191
N.J. at 48, we hold that the second portion of the good-faith exception refers to
informal agency guidance expressing the interpretation of the DOL or the
Division Wage and Hour Compliance, not to determinations by lower-level
representative regarding individual cases that are subject to further
administrative appeal. Accordingly, we find that the 2006 opinion letter could
qualify as an "administrative practice or enforcement policy" sufficient to
support a good-faith defense. N.J.S.A. 34:11-56a25.2.
Turning to the facts of this case, however, we find that defendant is not
entitled to the good-faith defense based on the 2006 opinion letter. The good-
faith defense applies only when an employer "pleads and proves that the act or
omission complained of was in good faith in conformity with and in reliance
on [a qualifying source]." N.J.S.A. 34:11-56a25.2 (emphasis added). "When
an affirmative defense is raised [in a civil case], the defendant normally has
the burden of proving it." Roberts v. Rich Foods, Inc., 139 N.J. 365, 378
A-1313-17T1
26
(1995) (alteration in original) (quoting Biunno, Current N.J. Rules of
Evidence, cmt. 2 on N.J.R.E. 101(b)(1) (1994-95)); see also Keeley, 183 F.3d
at 272 n. 12 ("We note that the burden to plead and prove good faith is on the
defendant."). In this case, defendant presented no evidence in support of its
motion for summary judgment that it relied on the 2006 opinion letter in
determining the appropriate compensation for its employees. See Estate of
Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 378 n. 3 (2010) ("In
respect of a summary judgment motion, an appellate court is bound by the
summary judgment factual record developed before the trial court and applies
to that record the governing legal standards."). Because defendant failed to
establish such reliance, it may not avail itself of the good-faith defense based
on the 2006 opinion letter.
Moreover, unlike the three initial documents, the 2006 opinion letter
does not specifically address COL or determine that COL meets the statutory
definition of a "trucking industry employer." N.J.S.A. 34:11-56a4(f). Because
defendant did not present proofs that it was a trucking industry employer and
had paid its employees in accordance with the formula for trucking industry
overtime set forth in the letter, the letter is insufficient to support the good -
faith defense on the facts of this case.
A-1313-17T1
27
In this regard, the trial court made clear that "whether or not [defendant]
is a trucking industry [employer] is clearly a question of fact. But that's not
the issue for today." Similarly, based on its ruling on the good-faith defense,
the trial court also did not make findings on the actual hourly compensation
plaintiff received during the relevant time period. 10
The WHL defines "trucking industry employer" as
any business or establishment primarily operating for
the purpose of conveying property from one place to
another by road or highway, including the storage and
warehousing of goods and property. Such an
employer shall also be subject to the jurisdiction of the
Secretary of Transportation pursuant to the federal
Motor Carrier Act, 49 U.S.C. [§] 31501 et seq., whose
employees are exempt under section [§] 213(b)(1) of
the federal "Fair Labor Standards Act of 1938," 29
U.S.C. [§] 213(b)(1), which provides an exemption to
employees regulated by section 207 of the federal
"Fair Labor Standards Act of 1938," 29 U.S.C. [§]
207, and the Interstate Commerce Act, 49 U.S.C. [§]
501 et al.
[N.J.S.A. 34:11-56a4(f).]
Based on the legislative purpose of the WHL and the legislative history
of the trucking industry employer exception, we noted that the exception "was
10
During oral argument on the summary judgment motion, defendant's
attorney acknowledged that the issue of plaintiff's actual compensation was not
before the court. Likewise, in its appellate brief, defendant argues that "[t]he
good-faith defense is absolute, obviating the need to address the underlying
elements of a [trucking industry employer]."
A-1313-17T1
28
directed at the trucking industry, not the retail industry." Raymour &
Flanigan, 405 N.J. Super. at 378. We held that "the term establishment as
used in N.J.S.A. 34:11-56a4 does not simply mean a separate location of one
branch of a complete business enterprise, but in fact refers to the business
itself, which must primarily operate to transport property by road from one
place to another." Id. at 385.
In opposition to defendant's motion for summary judgment, plaintiff
requested additional discovery to establish the defendant is not a trucking
industry employer. Plaintiff identifies information on defendant's website
suggesting that defendant may manufacture some of its products and is not
only in the business of conveying goods. On the other hand, defendant's vice
president of operations certified that COL does not manufacture or produce
any of its own products.
When viewing the evidence in the light most favorable to plaintiff, we
find that issues of fact exist as to whether defendant is a trucking industry
employer. There were roughly three months until the close of discovery when
defendant moved for summary judgment, and plaintiff had not yet deposed
defendant's vice president of operations. Moreover, it is clear that the parties
did not actually litigate this issue below.
A-1313-17T1
29
In addition, even if defendant meets the definition of a trucking industry
employer, defendant did not present sufficient proofs to establish that plaintiff
received appropriate compensation. Plaintiff's complaint, filed in November
26, 2016, alleges that he worked for COL since September 15, 2015, but the
record contains only plaintiff's earning statements for January and February
2017. These records reflect that plaintiff was credited with eight hours of days
for each day he worked, that plaintiff only punched in when he arrived to work
but did not punch out at the end of his shift, and that plaintiff received a daily
flat rate of $180 per day. When viewing this evidence in the light most
favorable to plaintiff, we find that issues of material fact exist as to the exact
hours that plaintiff worked and the exact compensation plaintiff received.
In light of these factual disputes, we remand for further discovery on
whether defendant meets the statutory definition of a trucking industry
employer and the actual hourly compensation plaintiff received. After
determining whether defendant is a trucking industry employer, the trial cour t
may determine whether plaintiff's actual compensation was sufficient to meet
the regular overtime or trucking industry overtime requirements. 11
11
The parties dispute the appropriate formulas for calculating regular
overtime and trucking industry overtime and whether the 2006 opinion letter
sets forth the proper formulas. We leave it to the trial court to adjudicate these
issues in the first instance.
A-1313-17T1
30
E.
In summary, we hold that the three initial determinations relied on by
defendant are insufficient to support the good-faith defense and reverse the
trial court's grant of summary judgment. Although we conclude the 2006
opinion letter represents "an administrative practice or enforcement policy,"
N.J.S.A. 34:11-56a25.2, defendant did not rely on this letter and therefore is
not entitled to the good-faith defense on the facts of this case.
Reversed and remanded for further proceedings. We do not retain
jurisdiction.
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