ELMER BRANCH, on behalf of himself and all other similarly situated persons, Plaintiff-Appellant,
CREAM-O-LAND DAIRY, Defendant-Respondent.
March 11, 2019
Reargued May 13, 2019 
appeal from Superior Court of New Jersey, Law Division,
Hudson County, Docket No. L-4744-16.
Sattiraju argued the cause for appellant (The Sattiraju Law
Firm, PC, attorneys; Ravi Sattiraju, of counsel and on the
briefs; Anthony Santos Almeida, on the briefs).
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
Judges Sabatino, Sumners and Mitterhoff.
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.
reviewed the contentions advanced on appeal in light of the
applicable legal principles, we hold that such discrete
determinations by DOL 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.
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.
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 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.
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.
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 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."
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,
The inspection report indicated that [COL] is considered a
transportation company rather than a dairy. Since the
complainant consistently made above 11/2 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.
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 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
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.
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 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."
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.
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.
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.
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.