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Howard E. Flecker, Iii, On Behalf of Himself and All Other Similarly Situated Persons v. Statue Cruises

November 14, 2012


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4522-09.

Per curiam.


Argued April 18, 2012

Before Judges Axelrad, Sapp-Peterson and Ostrer.

Plaintiff appeals from the April 1, 2011 trial court order denying his motion for summary judgment and granting defendants' cross-motion for summary judgment dismissing his complaint brought against his employers, Statue Cruises, L.L.C. (Statue) and Terry MacRae, pursuant to the New Jersey Wage and Hour Law, N.J.S.A. 34:11-56a4 to -56a30, and the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14. Plaintiff also appeals from the February 18, 2011 order compelling him to undergo an independent medical examination (IME) and the May 28, 2010 order "denying class certification on Count II (CEPA Claim) of the [a]mended [c]omplaint." We reverse the grant of summary judgment dismissing plaintiff's CEPA claim. We also reverse the dismissal of plaintiff's Wage and Hour claim and remand to the trial court for further proceedings in order to determine whether application of New Jersey's Wage and Hour Law is preempted by federal law. The Fair Labor Standards Act, 29 U.S.C.A. § 201 to -219 (FLSA).

Upon remand, the court must make specific factual findings that include a determination to what extent, if any, Statue's operations extend into federal waters, and if so, whether application of New Jersey's Wage and Hour Law would prove so disruptive that federal law should pre-empt New Jersey law, as well the nature and scope of Statue's operations in New Jersey and New York. We affirm the orders denying plaintiff's motion for summary judgment, the denial of class certification, and the order compelling plaintiff to undergo an IME.


Because plaintiff's complaint was dismissed at the summary judgment stage, we review the facts in the light most favorable to plaintiff, as the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Plaintiff was employed as a deckhand by Statue, which provides passenger ferry service from ports in New York and New Jersey to Liberty Island and Ellis Island. Plaintiff was a member of a collective bargaining unit whose employment contract with Statue called for the forty to forty-five employees subject to the collective bargaining agreement (CBA) to be paid for overtime at a rate of time and one-half of the employee's straight time for hours worked in excess of forty-eight hours per week.

On September 10, 2009, plaintiff filed a single-count class action complaint alleging that the CBA was contrary to the Wage and Hour Law. After filing the complaint, a Statue executive, Michael Burke, authored an October 1 memorandum informing employees about the lawsuit. The memo identified plaintiff as the named party in the lawsuit and advised employees that in an effort to mitigate damages, they would not schedule union employees to work more than forty hours per week until the issues raised in the complaint were resolved. The memo stated further:

We have been informed, and have reason to believe, that this lawsuit (which is brought by Howard Flecker III, the brother of an official in Local 333) may be supported by your collective bargaining representative, Local 333. If that is the case, we are puzzled and disappointed that the Union apparently did not consider the impact the lawsuit would likely have on you and our Company. For those of you who will lose a day's pay (or more) every week, I leave it to your good judgment whether Local 333's possible involvement in this lawsuit was in your best interests.

Plaintiff's co-workers immediately started confronting him. Some of the co-workers urged him to drop the suit, while others started to ignore him or expressed that they were upset with what he had done. Shop steward, Matthew Gill, asked plaintiff "to consider the whole, big picture" and the impact his suit would have on the more senior employees. Gill drafted a letter on behalf of himself and twenty other employees opposing the lawsuit and encouraging the union to address the issues in contract negotiations. Another co-worker, Al McGee, in a confrontational manner, told plaintiff that his lawsuit was "ruining everybody's career," affecting everyone financially, and told plaintiff he wanted to get plaintiff's complaint and "burn it on the boat with everybody."

Plaintiff did not report these confrontations to defendants because he felt management deliberately humiliated and embarrassed him with the memo and he did not trust management to be of help to him. However, in an October 4 letter, plaintiff's attorney demanded that defendants retract the memorandum on the basis that it violated CEPA. The next day, plaintiff's counsel filed a motion in the wage and hour litigation seeking sanctions and a curative notice. Defendants' attorney responded two days later, stating Statue was "well within its rights to engage in normal management practices (i.e., scheduling so as to limit the cost of overtime), and to limit any potential damages resulting from the lawsuit . . . ."

Plaintiff claims his hours were reduced from forty to fifty hours per week to approximately thirty-five hours per week after Burke issued the October memo. In addition, the stress of his daily encounters with co-workers forced him to resign from his position. On October 15, he filed an amended complaint adding a CEPA claim.

Notwithstanding defendants' position regarding the October 1 memorandum, as articulated by defense counsel in the October 6 letter to plaintiff's counsel, the parties negotiated two curative notices that defendants issued to their employees on November 30. The first notice was directed to all Statue cruise captains, and instructed that captains "should not discuss the case or the issues in the case with deckhands under any circumstances." The second memorandum, issued to all union-represented employees, provided in pertinent part:

In sending you [the October 1st] memorandum, it was not our intention to influence your decision whether to join the lawsuit. The Company will not interfere in any way with your right to pursue these claims, if that is your choice. Please be assured that you may pursue these claims and join the suit without fear of retaliation. Supervisory employees (including Captains) are prohibited from engaging in retaliation against any employee for participating in this suit. Retaliation includes, but is not limited to, any actual or threatened adverse employment action, or other conduct which punishes employees for participating in the suit.

In addition, we mentioned in the October 1st memorandum that the lawsuit in question had been brought in the name of one of our employees, Howard Flecker. Again, we did not intend to suggest that Mr. Flecker did not have a right to file the lawsuit, nor that he had breached any obligation he owed to the Company in doing so. Mr. Flecker was well within his rights in filing the suit; he continued to work for us after he filed the suit; and the Company will not retaliate against Mr. Flecker in the future because of his suit.

In April 2010, plaintiff filed a motion for class certification. On May 28, the court granted the motion with respect to plaintiff's wage and hour claim but denied class certification for plaintiff's CEPA claim. Plaintiff then sought leave to appeal that part of the May 28 order denying class certification on the CEPA claim. We denied plaintiff's application.

In February 2011, defendants filed a motion seeking to extend discovery and to compel plaintiff to undergo an IME. In support of this application, defendants noted that as part of plaintiff's CEPA claim, plaintiff alleged: "As a result of Defendants' conduct, Plaintiffs [sic] have endured significant damages including, but not limited to, physical and bodily injuries, severe emotional distress, humiliation, embarrassment, personal hardship, career and social disruption, psychological and emotional harm, economic losses, and other such damages."

Defendants argued that an IME was needed because plaintiff failed to provide adequate discovery on the issue of his severe emotional distress, despite being requested to do so in interrogatories and document requests propounded upon him. On February 18, the court granted defendants' request to compel plaintiff to submit to an IME. The record does not reflect whether plaintiff was ever examined.

Thereafter, the parties filed summary judgment motions. The court denied plaintiff's motion but granted defendants' cross-motion. In granting defendants' cross-motion, the court adopted defendants' position that the October 1 memorandum was not an adverse employment action because it was not a completed personnel action that impacted plaintiff's employment. The court similarly rejected plaintiff's contention that defendants' retaliatory conduct included reducing his hours of work. The court observed that plaintiff's hours had been on the decline even before he filed his lawsuit. Turning to the purported confrontations with his co-workers, the court found that these encounters, while creating a hostile work environment, were not sufficiently egregious, when compared to circumstances addressed in reported decisions where courts have found the working environment sufficiently hostile, to support a CEPA claim.

In denying class certification of plaintiff's CEPA claim, the court ruled that CEPA provided no cause of action to anyone other than the whistleblower and that even if such a cause of action existed, plaintiff failed to meet the standards for class certification.

Finally, the court concluded plaintiff's wage and hour claim was pre-empted by federal law. The court stated:

Here, under New Jersey law, there is not an exemption from the Wage and Hour laws with respect to seamen. New York, like the [FLSA], has a specific provision in its law that would exempt them.

Under the analysis employed in Strain

[v. W. Travel, Inc., 70 P.3d 158 (Wash. Ct. App. 2003), review denied, 82 P.3d 243 (2004)], Coil [v. Jack Tanner Towing Co., 242 F. Supp. 2d 555 (S.D. Ill. 2002)], and Fuller [v. Golden Age Fisheries, 14 F.3d 1405 (9th Cir.), cert. denied, 512 U.S. 1206, 114 S. Ct. 2677, 129 L. Ed. 2d 812 (1994)], the New Jersey Wage and Hour law should not apply.

The present appeal followed.

On appeal, plaintiff raises the following points for our consideration:



A. The Purpose and Legal Framework of CEPA.

i. There is No Dispute That Plaintiff Meets the First, Second and Fourth Prongs of the ...

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