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Branch v. Cream-O-Land Dairy

Superior Court of New Jersey, Appellate Division

June 19, 2019

ELMER BRANCH, on behalf of himself and all other similarly situated persons, Plaintiff-Appellant,
v.
CREAM-O-LAND DAIRY, Defendant-Respondent.

          Argued March 11, 2019

          Reargued May 13, 2019 [1]

          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 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).

          Before Judges Sabatino, Sumners and Mitterhoff.

          OPINION

          MITTERHOFF, J.S.C.

         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 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 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 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 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.

         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 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 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.

         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.

...


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