Truck Drivers Get The Right To Sue For Overtime

By Jennifer Vorih, Esq., Ty Hyderally, Esq.

and Stephanie Gibson

June 27, 2019

On June 19, 2019, the New Jersey Appellate court issued an opinion in Elmer Branch v. Cream-o-Land Dairy, a case involving employee truck drivers suing their employer, Cream-o-Land Dairy, for allegedly not paying the drivers their overtime pay due, in violation of the New Jersey Wage and Hour Law (“WHL”). N.J.S.A. 34:11-56a to -56a38. Plaintiffs asserted that under the WHL, employers must pay their employees one and one-half times the employee’s regular hourly rate for overtime work, and as Defendant had allegedly failed to do so, it was therefore in violation of the WHL. Defendant countered with a claim that it fell under the “Federal Trucking guidelines of overtime exemption,” which only requires trucking companies to pay their employees one and one-half times the state minimum wage for overtime. N.J.S.A. 34:11-56a4(f). The trial court granted summary judgement in favor of Cream-o-Land and declined Plaintiffs’ request to review. The appellate court granted review.

Cream-o-Land’s main defense against its employees’ WHL claims was the “good faith” defense embodied in the statutory language. N.J.S.A. 34:11-56a25.2. To claim the “good faith” defense against failure to pay overtime as required by the WHL, a defendant must show that it was acting either “in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval or interpretation by the Commissioner of the Department of Labor and Industry or the Director of the Wage and Hour Bureau,” or in accordance with “any administrative practice or enforcement policy of such department or bureau with respect to the class of employers to which he belonged.” Defendant pointed to three direct responses it had received from Department of Labor (“DOL”) employees stating that Cream-o-Land fell under the “Federal Trucking guidelines of overtime exemption,” as support of its “good faith” defense.

First, Defendant received an investigation report in 2007 from a DOL hearing and review officer. Second, in 2014 Defendant received an email from a senior investigator for the DOL. Third, Defendant received an email in 2017 from the section chief of the Division of Wage and Hour Compliance. All of these communications stated that Defendant was considered a trucking company, rather than a dairy. At trial, the court held that these communications were sufficient to establish a “good faith” defense.

The appellate court disagreed. The court held that in terms of DOL’s enforcement investigations, only the Commissioner’s final agency decision following 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. The court also held that to qualify as an “administrative practice or enforcement policy,” a decision must carry the endorsement of the agency head. In light of these findings, the court ruled that none of the three initial determinations sent to Defendant qualified as evidence to support a “good faith” defense.

Defendant was allowed to supplement the record on appeal, and included a 2006 letter from the Director of the Division of Wage and Hour Compliance. This letter did not reference Cream-o-Land specifically, rather, it laid out compensation formulas for truck drivers and other WHL exempt employees. The court ceded that this letter could successfully establish the “good faith” defense; however, the court decided that Defendant had not adequately proven that it relied on the letter when it chose to consider its truck driver employees as exempt from the WHL. This was punctuated by the fact that Defendant had not entered the letter into evidence at the trial level.

The appellate court found that private communications by DOL officials regarding complaints by individual employees are subject to further administrative appeal and do not constitute an “administrative practice or enforcement policy” and thus are insufficient to support the good-faith defense. N.J.S.A. 34:11-56a25.2. The appellate court also found that without more evidence, there were questions of material fact which had to go to the trier of fact, making the case inappropriate for summary judgement.

This ruling is cause for celebration for employees, as it will hopefully help to regulate overtime payrates and discourage companies from withholding overtime pay. Moreover, this decision may signal a recommitment of the higher courts to protect employees from any fancy footwork employers may perform to cut wages. The question remains whether Cream-o-Land will be held to be a dairy or a trucking company on remand, but it is very important that the employees here will have a fair opportunity to be heard.

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