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New Jersey Department of Labor v. Pepsi-Cola Co.

January 17, 2001

NEW JERSEY DEPARTMENT OF LABOR, PETITIONER-RESPONDENT, AND TEAMSTERS LOCAL 125 AND 185 INDIVIDUAL CLAIMANTS, INTERVENORS-RESPONDENTS,
V.
PEPSI-COLA COMPANY, RESPONDENT-APPELLANT.



On appeal from the New Jersey Commissioner of Labor, LID 4807-98, 6793-98.

Before Judges King and Axelrad.*fn1

The opinion of the court was delivered by: King, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: October 12, 2000

This appeal implicates the power of the Commissioner of Labor to award prejudgment interest as an element of damages in a wage- and-hour dispute over payment of overtime. We conclude that the Commissioner has this power and affirm.

I.

The matter arises out of an enforcement action by the New Jersey Department of Labor (DOL) for payment of overtime wages. Pepsi-Cola Corporation appeals the Commissioner's order that it must pay prejudgment interest on the owed back wages.

On November 30, 1995 the DOL notified Pepsi that it was in violation of N.J.S.A. 34:11-56a4 (minimum and overtime rate exceptions) and N.J.S.A. 34:11-4.2 (time, mode of payment and paydays) for failure to pay overtime to "fountain drivers." These fountain drivers deliver syrup and other bulk products used in dispensing machines, in contrast to products in cans and bottles. The DOL assessed Pepsi $1,885,098.68 in back wages, a $2,000 penalty and $188,509.87 in administrative fees. The notice of violation told Pepsi it could appeal within fifteen days.

In December 1995 Pepsi requested a hearing before the Office of Administrative Law. On August 19, 1996 the Administrative Law Judge permitted Teamsters Locals 125 and 185 (Teamsters) representing Pepsi's drivers to intervene. N.J.A.C. 1:16-1. On October 15, 1996 the ALJ issued a prehearing order which limited the hearing to the determination of liability to about twelve drivers - the "test claimants." The order provided that upon the making of a determination with respect to the liability for overtime as to the approximately 12 individual claimants, all counsel shall be given an opportunity to seek an order or the determination that the decision(s) with respect to the 12 individual claimants shall apply to all of the remaining claimants.

On February 24, 1998 Pepsi conceded that three fountain drivers James Waggner ($1,797.70), Antonio Petillo ($7,082.26), and Ralph Cash ($1,088.48) were entitled to overtime compensation and not exempt as "outside sales persons" under N.J.A.C. 12:56-7.4. On November 18, 1998 the Teamsters moved for partial final judgment and sanctions and requested back wages and prejudgment interest on those wages for the three men. On March 16, 1998 the ALJ awarded the three drivers back wages but declined to award prejudgment interest, citing an absence of legal authority.

On April 14, 1999 Commissioner Gelade of the DOL issued a final agency decision affirming the ALJ's award of back wages but reversing the decision on prejudgment interest. The Commissioner found that as a matter of equity he had the discretion to make the award of prejudgment interest, particularly because of the delay in paying back wages for six years. We granted a stay of the DOL's order pending this appeal.

II.

Pepsi first asserts that the DOL violated its due process rights by failing to inform it of the possible imposition of prejudgment interest. We disagree. We conclude that Pepsi had adequate notice and the ability to participate in the adjudicative process at the administrative level and in this court.

Notice is defined by the Due Process Clause of the Fourteenth Amendment to the United States Constitution and Article 1, Paragraph 1 of ...


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