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

The New Jersey Wage and Hour Law (“NJWHL”) requires employers to pay employees 1.5 times their regular hourly wage for each hour of overtime they work.  However, the NJWHL makes an exception for “trucking industry employers,” who are required to pay only 1.5 times the minimum wage for overtime.  

Thus, the question comes up, who are the employers that fall within this “trucking industry employer” exception?  The New Jersey Supreme Court recently held that, in the matter of Elmer Branch v. Cream-O-Land Dairy (A-29-19) (08337), this is still an open question which the trial court must decide.

Truck driver Elmer Branch brought suit – for himself and other similarly situated truck drivers – against his employer, Cream-O-Land Dairy, claiming that Cream-O-Land was not a “trucking industry employer” under the NJWHL and it therefore had to pay him and other truck drivers overtime at 1.5 times their regular hourly wage.  Cream-O-Land had been paying Branch and its other drivers overtime at 1.5 times the minimum wage, based upon its contention that it is a “trucking industry employer” under the NJWHL.

The difference in pay between these two rates can be very substantial. According to ZipRecruiter, the current average hourly rate for truck drivers in New Jersey is $24.76, whereas the New Jersey minimum wage at present is $12.  Thus, the question of whether Cream-O-Land has to pay its drivers 1.5 times their regular hourly rate or the minimum wage has a significant impact on the drivers’ pay.

N.J.S.A. 34:11-56a4(f) defines “trucking industry employer” as, “any business or establishment primarily operating for the purpose of conveying property from one place to another by road or highway, including the storage and warehousing of goods and property.”  According to Cream-O-Land, it was entitled to pay its employees overtime based upon the minimum wage rate, because it relied in good faith on three initial determinations by employees of the New Jersey Department of Labor (“NJDOL”), in prior cases, that Cream-O-Land was a trucking industry employer under the NJWHL.

The trial court found that Cream-O-Land satisfied the NJWHL’s good faith defense.  This defense requires the employer to prove that it relied in good faith on (1) a ruling, order or action or decision by the Commissioner of the Department of Labor and Industry or the Director of the Wage and Hour Bureau, or (2) “any administrative practice or enforcement policy of such department or bureau with respect to the class of employers” to which the employer belonged.  Here, the trial court found that Cream-O-Land was entitled to rely upon the initial rulings of the NJDOL in setting its overtime policy, even though these rulings had not been reviewed by the Commissioner or Director. 

While the trial court had held that Cream-O-Land’s reliance on initial determinations by such lower-level NJDOL employees was sufficient to establish the good faith defense, the Appellate Division disagreed, holding that none of the determinations on which Cream-O-Land relied met the requirements of the good faith defense.  These decisions were: a handwritten decision by a hearing and review officer, an email by a senior investigator, and an email from the Section Chief of the Division of Wage and Hour Compliance.  Rather, as each of those matters was resolved without further review, Cream-O-Land did not have a ruling, order, or similar action or decision by the Commissioner, on which to rely in setting its overtime policy.  Additionally, the Appellate Division rejected Cream-O-Land’s argument that an opinion letter from 2006 could establish a good faith defense, because Cream-O-Land presented no evidence that it had actually relied on that opinion letter in setting its overtime rate.  The Appellate Division remanded the matter to the trial court, but Cream-O-Land appealed to the New Jersey Supreme Court.

The New Jersey Supreme Court affirmed the Appellate Division’s decision, held that Cream-O-Land had not met the requirements of the good faith defense, and remanded the matter to the trial court for a determination of whether Cream-O-Land was a trucking industry employer.  In addition, our Supreme Court suggested that the Legislature and the NJDOL take appropriate action — such as creating a process by which employers can request opinion letters — to avoid employers such as Cream-O-Land being in this situation in the future.

While it has yet to be determined whether Cream-O-Land Dairy is a trucking industry employer, it is good to know that just a hand written opinion or an email may not satisfy the requirements of a good faith defense.

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