ELMER BRANCH v. CREAM-O-LAND DAIRY

Annotate this Case

(NOTE: The status of this decision is Published.)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1313-17T1

ELMER BRANCH, on behalf of
himself and all other similarly
situated persons,
APPROVED FOR PUBLICATION
Plaintiff-Appellant, June 19, 2019

APPELLATE DIVISION
v.

CREAM-O-LAND DAIRY,

Defendant-Respondent.
_____________________________

Argued March 11, 2019

Before Judges Sabatino, Sumners and Mitterhoff.

Reargued May 13, 2019 1 – Decided June 19, 2019

Before Judges Sabatino, Sumners and Mitterhoff.

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

1
The appeal was reargued to enable the Attorney General's participation. The
Attorney General appeared at the second oral argument. Judge Sumners heard
the first oral argument, but did not hear the second oral argument. The parties
have consented to the addition of Judge Sumners to the panel without the need
for further oral argument.
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).

The opinion of the court was delivered by

MITTERHOFF, J.S.C. (temporarily assigned).

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

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2
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.

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

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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

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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
1 1/2 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

A-1313-17T1
5
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

A-1313-17T1
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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.

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.

A-1313-17T1
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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.

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

A-1313-17T1
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POINT I: THE TRIAL COURT ERRED IN
DETERMINING THAT DEFENDANT COL COULD
AVAIL ITSELF OF THE [WHL]'S "GOOD FAITH"
DEFENSE IN THIS ACTION.

A. The [WHL] Is a Remedial and Humanitarian
Legislation That Must Be Construed Liberally to
Effectuate Its Purpose of Prohibiting Employers
From Evading Their Obligations.

B. Defendant COL's Purported "Proofs" Do Not
Establish Applicability of the [WHL]'s "Good
Faith" Defense As a Matter of Law.

C. The Trial Court Erred In Relying Upon State v.
Frech Rather than Keely v. Loomis.

D. Guidance From the Federal Courts Construing
the [Fair Labor Standards Act]'s "Good Faith"
Defense Supports Plaintiff's Position That
Defendant COL Should Not Be Able to Avail
Itself of the [WHL]'s "Good Faith" Defense.

POINT II: THE TRIAL COURT SHOULD HAVE
ALLOWED PLAINTIFF THE OPPORTUNTIY TO
DEPOSE MESSRS. STONER AND McCARTHY
PRIOR TO ENTERING SUMMARY JUDGMENT
AND DISMISSING PLAINTIFF'S COMPLAINT.

POINT III: EVEN IF THE [WHL]'S "GOOD FAITH"
DEFENSE APPLIES, THE TRIAL COURT ERRED
IN DISMISSING PLAINTIFF'S COMPLAINT IN
TOTO BECAUSE PLAINTIFF WOULD STILL
HAVE A VIABLE CLAIM FOR UNPAID
"TRUCKING INDUSTRY OVERTIME."

In addition, plaintiff argues that defendant is not entitled to the good -

faith defense based on the 2006 opinion letter because: (1) the letter was not

A-1313-17T1
9
part of the summary judgment record; (2) there is no evidence in the record

supporting that COL actually relied on the letter; and (3) the trial court's ruling

on the good-faith defense did not involve a determination of the actual

compensation paid by COL to plaintiff and the putative class of truck drivers

during the relevant time period. For these reasons, plaintiff maintains that the

2006 opinion letter is irrelevant to the issues on appeal.

Defendant contends that the three previous DOL determinations

constitute an enforcement policy upon which it reasonably relied and are

sufficient to invoke the good-faith defense. Defendant similarly argues that

the 2006 opinion letter represents the DOL's enforcement policy. Defendant

also argues that federal case law interpreting the good-faith defense under the

Fair Labor Standards Act ("FLSA")2 supports its entitlement to the good-faith

defense. Finally, defendant maintains: (1) no additional discovery would

affect its entitlement to the good-faith defense; and (2) the good-faith defense

is absolute, obviating the need to address whether COL met the definition of a

trucking industry employer and paid its truck drivers one-and-one-half times

the minimum wage for hours worked over forty.

The Attorney General argues that the three initial determinations relied

on by COL do not meet the requirements for establishing the good-faith

2
Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 to 219.

A-1313-17T1
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defense. The Attorney General notes that the three initial determinations arose

from the early stages of the Division of Wage and Hour Compliance's

investigations into discrete matters and were subject to further administrative

appeal or the employee brining a wage collection proceeding. As such, the

Attorney General contends, the three initial determinations "are not high -level

final determinations that carry the imprimatur of the agency head, as is

required to establish the good-faith defense." The Attorney General maintains

that in terms of the DOL's enforcement investigations, only the

Commissioner's final decisions rendered after an OAL hearing are sufficient to

invoke the good-faith defense. The Attorney General argues that even taken

together, the three initial determinations do not constitute an "administrative

practice or enforcement policy . . . with respect to the class of employers

which he belonged[,]" N.J.S.A. 34:11-56a25.2, because the determinations

clearly were not intended to "apply uniformly or automatically to a particular

industry; they were discrete communications by subordinate members of the

department regarding investigations based on information received from the

employer."

On the other hand, the Attorney General argues that the 2006 opinion

letter would be sufficient to invoke the good-faith defense because it "broadly

discussed the Division's policy and interpretation of the law as a whole . . . and

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described the means by which the [DOL] determined compliance with the

WHL." The Attorney General contends that "[o]n its face, the letter reflects an

interpretation of the law that applies to an entire class of employers or

employees." Although the Attorney General notes that the 2006 opinion letter

offers the DOL's interpretation of the WHL at the time it was issued, the

Attorney General declines to take a position on whether the 2006 opinion letter

reflects the DOL's current interpretations and policies. The Attorney General

also declines "to take a position on whether defendant[] can demonstrate that

[it is] a 'trucking industry employer' or [is] currently in compliance with the

WHL with respect to the plaintiffs or any other employee."

We review a grant of summary judgment de novo, applying the same

standard as the trial court. Henry v. N.J. Dep't of Human Servs., 204 N.J. 320,

330 (2010). The court considers whether "the competent evidential materials

presented, when viewed in the light most favorable to the non-moving party,

are sufficient to permit a rational factfinder to resolve the alleged disputed

issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of

Am., 142 N.J. 520, 540 (1995); see R. 4:46-2(c).

Although Rule 4:46-1 permits a party to move for summary judgment

before the close of discovery, "[g]enerally, summary judgment is inappropriate

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prior to the completion of discovery." Wellington v. Estate of Wellington, 359 N.J. Super. 484, 496 (App. Div. 2003) (citing Velantzas v. Colgate-Palmolive

Co., 109 N.J. 189, 193 (1988)). A party opposing a motion for summary

judgment on the grounds that discovery is incomplete, however, must

"demonstrate with some degree of particularity the likelihood that further

discovery will supply the missing elements of the cause of action." Badiali v.

New Jersey Mfrs. Ins. Grp., 220 N.J. 544, 555 (2015) (quoting Wellington, 359 N.J. Super. at 496); see also Trinity Church v. Lawson-Bell, 394 N.J. Super.
159, 166 (App. Div. 2007).

We review the denial of a motion for reconsideration for an abuse of

discretion. Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996).

Reconsideration should be granted only where "either 1) the [c]ourt has

expressed its decision based upon a palpably incorrect or irrational basis, or 2)

it is obvious that the [c]ourt either did not consider, or failed to appreciate the

significance of probative, competent evidence[.]" Id. at 384 (quoting D'Atria

v. D'Atria, 242 N.J. 392, 401 (Ch. Div. 1990)).

Whether defendant is entitled to the GFD turns on the statutory

interpretation of the WHL. We review issues of statutory construction de

novo. Cashin v. Bello, 223 N.J. 328, 335 (2015).

A-1313-17T1
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III.

In addressing the issues presented by this appeal, we adhere to well-

established principles of statutory interpretation. "The Legislature's intent is

the paramount goal when interpreting a statute and, generally, the best

indicator of that intent is the statutory language." DiProspero v. Penn, 183 N.J. 477, 492 (2005). In considering the statutory language, "an appellate

court must read words 'with[in] their context' and give them 'their generally

accepted meaning.'" Cashin, 223 N.J. at 335 (alteration in original) (quoting

N.J.S.A. 1:1-1); see also DiProspero, 183 N.J. at 492 ("We ascribe to the

statutory words their ordinary meaning and significance, and read them in

context with related provisions so as to give sense to the legislation as a

whole." (citations omitted)).

When a statute's plain language lends to only one interpretation, a court

should not consider "extrinsic interpretative aids." DiProspero, 183 N.J. at 492

(quoting Lozano v. Frank DeLuca Const., 178 N.J. 513, 522 (2004)). "On the

other hand, if there is ambiguity in the statutory language that leads to more

than one plausible interpretation, we may turn to extrinsic evidence, 'including

legislative history, committee reports, and contemporaneous construction.'"

A-1313-17T1
14 Id. at 492-93 (quoting Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64, 75

(2004)).

In addition, although we are not ultimately bound by an agency's

statutory interpretation, "[g]enerally, courts afford substantial deference to an

agency's interpretation of a statute that it is charged with enforcing." Univ.

Cottage Club of Princeton New Jersey Corp. v. New Jersey Dep't of Envtl.

Prot., 191 N.J. 38, 48 (2007); see also Merin v. Maglaki, 126 N.J. 430, 436-37

(1992) ("We give substantial deference to the interpretation of the agency

charged with enforcing an act. The agency's interpretation will prevail

provided it is not plainly unreasonable."). Pursuant to the WHL, the DOL

established the Division of Wage and Hour Compliance to administer and

enforce the WHL. See N.J.S.A. 34:11-56a2; N.J.A.C. 12:56-1.1; N.J.A.C.

12:56-2.1.3 Accordingly, although we are not bound by the Attorney General's

interpretation of the WHL, "it is nonetheless entitled to a degree of deference,

in recognition of the Attorney General's special role as the sole legal adviser to

most agencies of State Government," including the DOL. Quarto v. Adams,

3
The statute refers to the "Wage and Hour Bureau," see, e.g., N.J.S.A. 34:11-
56a2; N.J.S.A. 34:11-56a25.2, but the DOL's regulations currently designate
that division as the "Division of Wage and Hour Compliance." N.J.A.C.
12:56-2.1 ("'Division of Wage and Hour Compliance' means Division of Wage
and Hour Compliance of Labor Standards and Safety Enforcement of the New
Jersey State Department of Labor and Workforce Development[.]").

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395 N.J. Super. 502, 513 (App. Div. 2007) (citing N.J.S.A. 52:17-4(e)); see

also Peper v. Princeton Univ. Bd. of Trs., 77 N.J. 55, 70 (1978); Bd. of Educ.

of W. Windsor-Plainsboro Reg'l Sch. Dist. v. Bd. of Educ. of Delran, 361 N.J.

Super. 488, 493-94 (App. Div. 2003).

We begin our analysis with the legislative purpose of the WHL. "The

WHL is designed to 'protect employees from unfair wages and excessive

hours.'" Hargrove v. Sleepy's, LLC, 220 N.J. 289, 304 (2015) (quoting In re

Raymour & Flanigan Furniture, 405 N.J. Super. 367, 376 (App. Div. 2009)).

To further this goal, "[t]he WHL establishes not only a minimum wage but

also an overtime rate for each hour of work in excess of forty hours in any

week for certain employees." Ibid. (citing N.J.S.A. 34:11-56a4). "The

remedial purpose of the [WHL] dictates that it should be given a liberal

construction." New Jersey Dep't of Labor v. Pepsi-Cola Co., 170 N.J. 59, 62

(2001); see also Hargrove, 220 N.J. at 304 ("The [WHL] should be construed

liberally to effectuate its purpose.").

The WHL's remedial purposes also dictates "that all exemptions to

N.J.S.A. 34:11-56a4 should be construed narrowly[.]" Marx v. Friendly Ice

Cream Corp., 380 N.J. Super. 302, 310 (App. Div. 2005); see also Raymour &

Flanigan, 405 N.J. Super. at 376 ("Given the humanitarian purpose of the

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[WHL] we construe the [trucking industry employer] exemption narrowly, not

broadly."); Yellow Cab Co. of Camden v. State Through Dir. of Wage & Hour

Bureau, 126 N.J. Super. 81, 86 (App. Div. 1973) ("The humanitarian and

remedial nature of [the WHL] requires that any exemption therefrom be

narrowly construed, giving due regard to the plain meaning of the statutory

language and the intent of the Legislature."). 4

Turning to the relevant statutory text, N.J.S.A. 34:11-56a25.2 sets forth

the good-faith defense:

In any action or proceeding commenced prior to or on
or after the date of the enactment of this act based on
any act or omission prior to or on or after the date of
the enactment of this act, no employer shall be subject
to any liability or punishment for or on account of the
failure of the employer to pay minimum wages or
overtime compensation under this act, if he pleads and
proves that the act or omission complained of was in
good faith in conformity with and in reliance on any
written administrative regulation, order, ruling,
approval or interpretation by the Commissioner of the
[DOL] or the Director of the Wage and Hour Bureau,
or any administrative practice or enforcement policy
of such department or bureau with respect to the class

4
Defendant contends that we are not required to narrowly construe the good -
faith defense because it is not an "actual overtime exemption" such as the
executive exemption or the administrative exemption. We find this argument
unavailing. Because the good-faith defense provides a total bar on liability for
violations of the WHL, it clearly operates as an exemption to the WHL's
requirements. See Black's Law Dictionary 653 (9th ed. 2014) (defining
"exemption" as "[f]reedom from a duty, liability, or other requirement; an
exception.").

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of employers to which he belonged. Such a defense, if
established, shall be a complete bar to the action or
proceeding, notwithstanding, that after such act or
omission, such administrative regulation, order,
ruling, approval, interpretation, practice, or
enforcement policy is modified or rescinded or is
determined by judicial authority to be invalid or of no
legal effect.

In construing this provision's plain language in accordance with the

legislative purpose of the WHL, it is useful to consider the administrative

structure by which the DOL enforces the WHL. Under the WHL, the

Commissioner of the DOL, the Director of the Division of Wage and Hour

Compliance, and their authorized representatives have the authority to

investigate potential wage and hour violations by collecting and inspecting

relevant information from employers. See N.J.S.A. 34:11-56a6. The DOL

may initiate an investigation into possible wage and hour violations from

either an employee's complaint or from the DOL's own audit. See N.J.S.A.

34:11-56a25.1. At the conclusion of an investigation, the Division of Wage

and Hour Compliance makes a determination as to whether the employer has

violated the WHL, and if so, whether to assess wages, penalties, or fees.

N.J.A.C. 12:56-1.2 to -1.4.

Within fifteen days of receiving an assessment letter from the Division

of Wage and Hour Compliance, an employer may request a formal hearing.

N.J.S.A. 34:11-56a22; N.J.A.C. 12:56-1.3(b). When an employer requests a

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formal hearing, the Division of Wage and Hour Compliance considers whether

the matter could be resolved at an informal settlement conference. N.J.A.C

12:56-1.6(c).5 If no settlement conference is held or no resolution is reached at

the conference, the Division transmits the matter to Office of Administrative

Law ("OAL"). Ibid. In accordance with the procedures of the Administrative

Procedures Act, a full record is developed and the Commissioner of the DOL

renders a final agency decision. N.J.S.A. 34:11-56a22; N.J.A.C. 12:56-1.6(d).

The Commissioner's final agency decision is appealable to the Appellate

Division. N.J.A.C. 12:56-1.6(e).

The employee is not a party to an enforcement action at any stage,

including in the OAL. If the Division of Wage and Hour Compliance declines

to pursue an enforcement action, it may refer the employee to the DOL's Wage

Collection Division to pursue the complaint before a Wage Collection Referee

within the DOL. See N.J.S.A. 34:11-58; N.J.S.A. 34:11-59; N.J.A.C. 12:61-

1.3. An employee may appeal a decision of a Wage Collection Referee to the

5
The Attorney General notes that a hearing officer will conduct the informal
settlement conference, that employees do not participate in conference, and
that the employer may provide additional information or clarification of the
circumstances giving rise to the assessment at the conference. The hearing
officer may close the case if a settlement is reached or if the Division of Wage
and Hour Compliance decides to take no further action based on the
information provided.

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Law Division and receive de novo review. See Iliadis v. Wal-Mart Stores,

Inc., 191 N.J. 88, 116 (2007) (citing N.J.S.A. 34:11-63).

"New Jersey case law is virtually nonexistent on the requirements of that

state's good-faith defense to a failure to pay statutory overtime rates[.]"

Keeley v. Loomis Fargo & Co., 183 F.3d 257, 271 (3d Cir. 1999). Indeed, no

published appellate opinions address the application of the good-faith defense

or interpret N.J.S.A. 34:11-56a25.2.6 In finding that defendant was entitled to

the good-faith defense, the trial court relied on the Law Division's decision in

State v. Frech Funeral Home, 185 N.J. Super. 385 (Law Div. 1982). Plaintiff

argues that the trial court should have rejected the reasoning of Frech and

instead relied on the Third Circuit Court of Appeal's reasoning in Keeley.

Frech addressed whether a mortician's trainee should be exempted from

the WHL's requirements based on employment in a "bona fide professional

6
In the absence of precedential New Jersey cases, both parties invoke federal
precedent interpreting the FLSA's good-faith defense. See 29 U.S.C. § 259.
Because we focus on the plain language and the legislative purpose of the
WHL, we find it unnecessary to rely on the federal precedent cited by the
parties. Moreover, although 29 U.S.C. § 259 contains largely identical
language to N.J.S.A. 34:11-56a25.2, the United States Department of Labor
has also enacted regulations addressing the good-faith defense under the
FLSA. See 29 C.F.R. §§ 790.13 to 790.19. The New Jersey DOL has not
promulgated analogous regulations under the WHL.

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capacity." 185 N.J. Super at 387. 7 The court determined that the defendant

was entitled to the good-faith defense based on its reliance on the regulations

defining "professional" under the WHL and the statute and regulations

addressing the practice of mortuary science. See id. at 393-97. In so holding,

the court reasoned that a "defendant need not be correct in its belief that its

employees work in a bona fide professional capacity. [The defendant] need

only plead and prove that in good faith it reasonably believes that to be the

fact." Id. at 397. In the instant matter, because defendant is not relying on the

DOL's regulations to support the application of the good-faith defense, we find

that Frech provides little persuasive authority.

In Keeley, the Third Circuit called into doubt the reasoning in Frech

because it "appeared to ignore the requirement that good faith be based on a

written regulations, order, etc." 183 F.3d at 269. The Third Circuit addressed

whether an employer was entitled to the good-faith defense based on its

reliance on an industry-wide practice of not paying overtime wages to truck

drivers. Id. at 269-73.8 The Third Circuit remanded for reconsideration of

7
The defendant funeral home was charged in municipal court for failing to
pay overtime wages as required by N.J.S.A. 34:11-56a4.
8 In 1996, the DOL enacted a regulation that established trucking industry
overtime at one-and-one-half times the minimum wage. Id. at. 262. The Third
Circuit struck down the regulation because the Commissioner exceeded his
(continued)

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21
whether the employer was entitled to the good-faith defense. Id. at 272. The

court reasoned that "New Jersey's good-faith defense is clearly unavailable

when an employer is not relying on one of the enumerated sources in the

statute, such as a regulation, practice, or policy of the state labor agency[,]"

and that "good faith is absent when the employer fails to investigate a law's

requirements, or simply relies on a longstanding practice (of either the

employer itself or its industry) of failing to pay overtime or on union

acquiescence in such failure." Id. at 271. We agree with the Third Circuit's

well-reasoned analysis, but find that Keeley is not analogous to the instant

matter because COL was not relying on a longstanding industry practice or

union acquiescence in asserting the good-faith defense.

With this background regarding the WHL and the good-faith defense in

mind, we turn to the questions presented in this appeal. When considered in

the context of WHL's enforcement structure, we agree with the Attorney

General that in terms of the DOL's enforcement investigations, only either the

(continued)
statutory authority in enacting the regulation. Id. at 268. "In response to
Keeley, the Legislature amended the Wage and Hour Law to include the
trucking industry employer exemption" as currently codified in N.J.S.A.
34:11-56a4(f). Raymour & Flanigan, 405 N.J. Super. at 378 (citing L. 1999, c.
370).

A-1313-17T1
22
Commissioner's final agency decision rendered after 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. This interpretation is

consistent with both the plain language of N.J.S.A. 34:11-56a25.2 and the

enforcement structure of the WHL. Accordingly, the three initial

determinations relied on by defendant do not serve as a basis for the good -faith

defense under this portion of N.J.S.A. 34:11-56a25.2.

The second portion of N.J.S.A. 34:11-56a25.2, that an employer relied

on "any administrative practice or enforcement policy of such department or

bureau with respect to the class of employers to which he belonged," is more

distinctly at issue in this appeal. We read this statutory language sensibly

alongside the first portion of N.J.S.A. 34:11-56a25.2 and the WHL's

enforcement provisions. See DiProspero, 183 N.J. at 492. We also construe

this language narrowly as an exception to the WHL's requirements. See Marx,

380 N.J. Super. at 310.

Applying these principles of statutory construction, we agree with

plaintiff and Attorney General that the three initial determinations do not

constitute an "administrative practice or enforcement policy" because they do

A-1313-17T1
23
not carry the imprimatur of the agency head. The three initial determinations

addressed discrete complaints by individual employees based on information

received from the employer. They were not espousing a general policy that

applied broadly to a class of employers. Furthermore, the determinations by

lower-level representatives of the DOL were subject to further administrative

appeal and thus are not comparable to the final agency decisions that would

suffice under the first portion of N.J.S.A. 34:11-56a25.2. Most importantly, to

the extent the second portion of the exception may be susceptible to more than

one interpretation, the exception must be construed narrowly in light of the

remedial purpose of the WHL. See Marx, 380 N.J. Super. at 310; Raymour &

Flanigan, 405 N.J. Super. at 376; Yellow Cab, 126 N.J. Super. at 86. Finally,

we accord deference to the Attorney General's interpretation of this provision

of the WHL. See Univ. Cottage Club, 191 N.J. at 48; Quarto, 395 N.J. Super.

at 513.

For all of these reasons, we hold that discrete determinations or

communications by DOL officials regarding complaints by individual

employees, which are subject to further administrative appeal, do not

constitute an "administrative practice or enforcement policy" and are

A-1313-17T1
24
insufficient to invoke the good-faith defense. N.J.S.A. 34:11-56a25.2.9

Accordingly, the trial court improvidently granted summary judgment to

defendant based on its reliance on the three previous DOL determinations.

Turning to the 2006 opinion letter, we find that the letter constitutes an

"administrative practice or enforcement policy" sufficient to support a good-

faith defense. N.J.S.A. 34:11-56a25.2. In general, agencies offer this sort of

informal guidance through means such as opinion letters, bulletins, and

internal memoranda. See Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123,

136-37 (2001) ("Although not easily defined, informal agency action is any

determination that is taken without a trial-type hearing, including

investigating, publicizing, negotiating, settling, advising, planning, and

supervising a regulated industry."). Courts give deference to agencies'

informal interpretations. See Estate of F.K. v. Div. Of Med. Assistance And

Health Servs., 374 N.J. Super. 126, 141 (App. Div. 2005) (citing Skidmore v.

Swift & Co., 323 U.S. 134, 140 (1944)).

The 2006 opinion letter constitutes such informal guidance and

expresses the Division of Wage and Hour Compliance's interpretation of the

9
Although we reach our conclusion based on the plain language of N.J.S.A.
34:11-56a25.2, we also note that the WHL's legislative history does not
contain any amendments or comments regarding the good-faith defense. See
L. 1967, c. 216, § 2.

A-1313-17T1
25
appropriate methods to calculate overtime wages for both non-exempt

employees and trucking industry employees. In other words, the letter

distinctly represents the Division's "administrative practice or enforcement

policy . . . with respect to [a] class of employers." N.J.S.A. 34:11-56a25.2.

Based on the plain language of the statute, and giving deference to the

Attorney General's interpretation of the WHL, see Univ. Cottage Club, 191 N.J. at 48, we hold that the second portion of the good-faith exception refers to

informal agency guidance expressing the interpretation of the DOL or the

Division Wage and Hour Compliance, not to determinations by lower-level

representative regarding individual cases that are subject to further

administrative appeal. Accordingly, we find that the 2006 opinion letter could

qualify as an "administrative practice or enforcement policy" sufficient to

support a good-faith defense. N.J.S.A. 34:11-56a25.2.

Turning to the facts of this case, however, we find that defendant is not

entitled to the good-faith defense based on the 2006 opinion letter. The good-

faith defense applies only when an employer "pleads and proves that the act or

omission complained of was in good faith in conformity with and in reliance

on [a qualifying source]." N.J.S.A. 34:11-56a25.2 (emphasis added). "When

an affirmative defense is raised [in a civil case], the defendant normally has

the burden of proving it." Roberts v. Rich Foods, Inc., 139 N.J. 365, 378

A-1313-17T1
26
(1995) (alteration in original) (quoting Biunno, Current N.J. Rules of

Evidence, cmt. 2 on N.J.R.E. 101(b)(1) (1994-95)); see also Keeley, 183 F.3d

at 272 n. 12 ("We note that the burden to plead and prove good faith is on the

defendant."). In this case, defendant presented no evidence in support of its

motion for summary judgment that it relied on the 2006 opinion letter in

determining the appropriate compensation for its employees. See Estate of

Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 378 n. 3 (2010) ("In

respect of a summary judgment motion, an appellate court is bound by the

summary judgment factual record developed before the trial court and applies

to that record the governing legal standards."). Because defendant failed to

establish such reliance, it may not avail itself of the good-faith defense based

on the 2006 opinion letter.

Moreover, unlike the three initial documents, the 2006 opinion letter

does not specifically address COL or determine that COL meets the statutory

definition of a "trucking industry employer." N.J.S.A. 34:11-56a4(f). Because

defendant did not present proofs that it was a trucking industry employer and

had paid its employees in accordance with the formula for trucking industry

overtime set forth in the letter, the letter is insufficient to support the good -

faith defense on the facts of this case.

A-1313-17T1
27
In this regard, the trial court made clear that "whether or not [defendant]

is a trucking industry [employer] is clearly a question of fact. But that's not

the issue for today." Similarly, based on its ruling on the good-faith defense,

the trial court also did not make findings on the actual hourly compensatio n

plaintiff received during the relevant time period. 10

The WHL 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. Such an
employer shall also be subject to the jurisdiction of the
Secretary of Transportation pursuant to the federal
Motor Carrier Act, 49 U.S.C. [§] 31501 et seq., whose
employees are exempt under section [§] 213(b)(1) of
the federal "Fair Labor Standards Act of 1938," 29
U.S.C. [§] 213(b)(1), which provides an exemption to
employees regulated by section 207 of the federal
"Fair Labor Standards Act of 1938," 29 U.S.C. [§]
207, and the Interstate Commerce Act, 49 U.S.C. [§]
501 et al.

[N.J.S.A. 34:11-56a4(f).]

Based on the legislative purpose of the WHL and the legislative history

of the trucking industry employer exception, we noted that the exception "was

10
During oral argument on the summary judgment motion, defendant's
attorney acknowledged that the issue of plaintiff's actual compensation was not
before the court. Likewise, in its appellate brief, defendant argues that "[t]he
good-faith defense is absolute, obviating the need to address the underlying
elements of a [trucking industry employer]."

A-1313-17T1
28
directed at the trucking industry, not the retail industry." Raymour &

Flanigan, 405 N.J. Super. at 378. We held that "the term establishment as

used in N.J.S.A. 34:11-56a4 does not simply mean a separate location of one

branch of a complete business enterprise, but in fact refers to the business

itself, which must primarily operate to transport property by road from one

place to another." Id. at 385.

In opposition to defendant's motion for summary judgment, plaintiff

requested additional discovery to establish the defendant is not a trucking

industry employer. Plaintiff identifies information on defendant's website

suggesting that defendant may manufacture some of its products and is not

only in the business of conveying goods. On the other hand, defendant's vice

president of operations certified that COL does not manufacture or produce

any of its own products.

When viewing the evidence in the light most favorable to plaintiff, we

find that issues of fact exist as to whether defendant is a trucking industry

employer. There were roughly three months until the close of discovery when

defendant moved for summary judgment, and plaintiff had not yet deposed

defendant's vice president of operations. Moreover, it is clear that the parties

did not actually litigate this issue below.

A-1313-17T1
29
In addition, even if defendant meets the definition of a trucking industry

employer, defendant did not present sufficient proofs to establish that plaintiff

received appropriate compensation. Plaintiff's complaint, filed in November

26, 2016, alleges that he worked for COL since September 15, 2015, but the

record contains only plaintiff's earning statements for January and February

2017. These records reflect that plaintiff was credited with eight hours of days

for each day he worked, that plaintiff only punched in when he arrived to work

but did not punch out at the end of his shift, and that plaintiff received a daily

flat rate of $180 per day. When viewing this evidence in the light most

favorable to plaintiff, we find that issues of material fact exist as to the exact

hours that plaintiff worked and the exact compensation plaintiff received.

In light of these factual disputes, we remand for further discovery on

whether defendant meets the statutory definition of a trucking industry

employer and the actual hourly compensation plaintiff received. After

determining whether defendant is a trucking industry employer, the trial court

may determine whether plaintiff's actual compensation was sufficient to meet

the regular overtime or trucking industry overtime requirements. 11

11
The parties dispute the appropriate formulas for calculating regular
overtime and trucking industry overtime and whether the 2006 opinion letter
sets forth the proper formulas. We leave it to the trial court to adjudicate these
issues in the first instance.

A-1313-17T1
30
E.

In summary, we hold that the three initial determinations relied on by

defendant are insufficient to support the good-faith defense and reverse the

trial court's grant of summary judgment. Although we conclude the 2006

opinion letter represents "an administrative practice or enforcement policy,"

N.J.S.A. 34:11-56a25.2, defendant did not rely on this letter and therefore is

not entitled to the good-faith defense on the facts of this case.

Reversed and remanded for further proceedings. We do not retain

jurisdiction.

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31

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