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Articles Tagged with New Jersey Wage and Hour Law

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The New Jersey Wage and Hour Law regulates minimum wage and overtime requirements.  It is New Jersey’s counterpart to the Federal Fair Labor Standards Act.  The Wage and Hour Law and Fair Labor Standards Act are bedrock elements of New Jersey employment law.  Under the Wage and Hour Law, New Jersey employers must pay overtime at a rate of one and half times an employee’s regular pay if she works more than forty hours a week.  However, if the employer is in imagesCAWQ89PSthe trucking industry, the employer is only legally required to pay overtime at the rate of one and half times minimum wage.  However, if the employer should have paid the higher rate but paid the lower rate, it can raise the defense that it did so in “good faith” reliance on government orders or regulations.

In the case of Branch v. Cream-O-Land Dairy, Elmer Branch filed a class action lawsuit in the New Jersey Superior Court against his employer, Cream-O-Land Dairy, on behalf of himself and similarly situated truck drivers employees, for non-payment of overtime in violation of the Wage and Hour Law.  Cream-O-Land argued that it was not required to pay the higher rate for two reasons.  First, it argued that it was a “trucking industry employer,” and that all the employees were paid at least the lower overtime rate.  Second, it argued that it met the “good faith” defense.  The trial agreed that Cream-O-Land satisfied the good faith defense and dismissed the case on that ground.  Branch appealed to the Appellate Division of the Superior Court which reversed, finding that the matters on which Cream-O-Land relied did not satisfy the statutory requirements of the Wage and Hour Law.

Cream-O-Land then appealed to the Supreme Court of New Jersey.  Because the trial judge did not address the exemption for trucking industry employers the Supreme Court, like the Appellate Division,  examined only whether Cream-O-Land satisfied the good faith defense.  It ruled that it did not.

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The Arafa Case

The New Jersey Supreme Court issued an opinion in the case of Arafa v. Health Express Corporation in a consolidated appeals about a niche question regarding the interplay of the Federal Arbitration Act (the “FAA”) and the New Jersey Arbitration Act (the “NJAA”) regarding the judge-gavel-1461998219JBc-300x200enforceability of agreements in employment contracts to arbitrate disputes under New Jersey employment law.  The consolidated cases were both brought as class actions by employees whose duties included driving to make deliveries for their employers.  In one of the appeals it was clear that the employees were making deliveries outside the state as well as in it, and were therefore engaged in interstate commerce; in the other it was not clear.  In both cases the employers argued that the cases were not covered by the FAA, which contains an exemption which provides that the FAA will not apply to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” which the United States Supreme Court has defined to include interstate deliveries.  Because the drivers were not covered by the FAA due to the exception, the employers argued, they were covered by the NJAA, which did not contain such an exemption, and the arbitration agreements were therefore enforceable.  Thus, the employers argued, the lawsuits in Superior Court should be dismissed and the cases submitted to binding arbitration.  The trial judges in the Law Division of the Superior Court of New Jersey agreed with the employers and dismissed the suits and ordered them to arbitration.  In both cases, the employees separately appealed, and different panels of the Appellate Division of the Superior Court reached different decisions.  To resolve the split, the New Jersey Supreme Court agreed to hear the appeals.

Why does this matter?  If it seems pretty arcane, it has significant real world consequences.  First, the employees sued for unpaid overtime under the New Jersey Wage and Hour Law because New Jersey law and New Jersey courts are seen – rightly or wrongly – as more friendly to employees than federal court, which of course is why the employers didn’t want the case there.  Moreover, arbitration is seen as much more friendly to employers than employees, which is why the two sides were fighting over it.

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