Elmer Branch v. Cream-O-Land Dairy (083379)(Hudson County & Statewide)
244 N.J. 567
| N.J. | 2021Background
- Branch sued Cream-O-Land alleging unpaid overtime under the New Jersey Wage and Hour Law (WHL), which generally requires 1½× regular rate for hours >40, but exempts employees of a “trucking industry employer” and prescribes a different overtime formula for them.
- Cream-O-Land claimed it qualified as a trucking-industry employer under N.J.S.A. 34:11-56a4(f) and that it could invoke the WHL good-faith defense in N.J.S.A. 34:11-56a25.2.
- The Department of Labor had three prior, informal determinations (2007 hearing/review officer note, 2014 senior investigator email, 2017 section‑chief email) finding Cream-O-Land to be a trucking employer; none were decided by the Commissioner or Director or appealed.
- The trial court granted summary judgment for defendant based on those Department determinations; the Appellate Division reversed, holding those determinations did not meet N.J.S.A. 34:11-56a25.2.
- The Supreme Court affirmed the Appellate Division: subordinate employees’ informal determinations do not satisfy the statute’s first prong (must be Commissioner/Director rule/order/interpretation), and the second prong requires a departmental practice or enforcement policy applicable to a class of employers plus proof of reliance; remanded for resolution of whether Cream-O-Land is a trucking employer and whether its pay complied with the WHL.
- The Court suggested the Department promulgate a procedure (e.g., opinion letters) or regulations clarifying the good-faith defense to avoid the dilemma faced by employers who obtain favorable but non-final informal determinations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an employer may invoke the WHL good‑faith defense (N.J.S.A. 34:11-56a25.2) based on determinations by subordinate Department employees | Branch: statute requires decisions by Commissioner or Director or a department-wide practice; subordinate determinations insufficient | Cream‑O‑Land: statute does not require a final agency decision; repeated favorable investigations suffice | Held: Good‑faith defense limited to (a) written rule/order/ruling/approval/interpretation by Commissioner or Director (or similarly authoritative determinations) or (b) an administrative practice/enforcement policy applicable to a class of employers; subordinate informal determinations do not qualify. |
| Whether the three Department determinations (2007, 2014, 2017) satisfy N.J.S.A. 34:11-56a25.2 | Branch: they are informal, non-final, and not issued by Commissioner/Director | Cream‑O‑Land: three independent favorable findings establish an enforcement practice or justify reliance | Held: None of the three determinations meet either statutory prong; they were not issued by Commissioner/Director nor shown to constitute a department policy for the employer’s class. |
| Whether a 2006 Director Opinion Letter can support the good‑faith defense and whether defendant relied on it | Branch: defendant did not plead reliance on that letter | Cream‑O‑Land: the 2006 letter represents Division interpretation and practice | Held: The 2006 Opinion Letter, as a Director-signed interpretation, could satisfy the statute, but Cream‑O‑Land did not assert or prove reliance, so it cannot use the letter to obtain the defense. |
| Proper disposition after rejecting the good‑faith defense | Branch: remand to litigate substantive WHL claims | Cream‑O‑Land: summary judgment was proper | Held: Trial court erred in granting summary judgment; case remanded to determine whether Cream‑O‑Land is a trucking‑industry employer and whether its overtime pay complied with WHL. |
Key Cases Cited
- State v. Frech Funeral Home, 185 N.J. Super. 385 (Law Div. 1982) (past practice relied upon by trial court but distinguished by Supreme Court)
- Keeley v. Loomis Fargo & Co., 183 F.3d 257 (3d Cir. 1999) (criticized Frech approach)
- DiProspero v. Penn, 183 N.J. 477 (statutory-interpretation principles)
- Barila v. Bd. of Educ. of Cliffside Park, 241 N.J. 595 (de novo review of summary judgment)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (summary judgment standard)