In a matter of first impression, the Court in Thompson v. Real Estate Mortgage Network Inc., Civil Action No. 11-cv-01494, held, on May 21, 2015, that an express private cause of action exists for overtime claims under the New Jersey Wage and Hour Law ("NJWHL"), denying Plaintiff’s former employers’ motion for partial judgment on the pleadings. This decision is important because it solidifies both an individual’s private right of action in addition to the New Jersey Department of Labor rights.
The Facts. The named plaintiff, Patricia Thompson, on behalf of a class of approximately 100 underwriters, was employed by Security Atlantic Mortgage Co. of Edison ("SAMC") from June 8, 2009 through February 2010 and then by a successor company, Real Estate Mortgage Network Inc. ("REMN"), until August 5, 2010 when she quit after she was told underwriters were not eligible for overtime.
Procedural History. Plaintiff originally filed suit on December 30, 2011. Thompson filed suit against her former employers on behalf of herself and others similarly situated, alleging that SAMC and REMN failed to properly compensate her with overtime pay for time worked in excess of forty (40) hours in a work week. Specifically, the claim is that she and other class members were misclassified as exempt employees, ineligible for overtime pay. Plaintiff brings claims both under the Federal Labor Standards Act (FLSA) and the NJWHL. SAMC and REMN filed the instant motion for judgment on the pleadings as to the NJWHL claim.
Legal Analysis. SAMC and REMN contended that they were entitled to judgment on the pleadings or, in other words, that the NJWHL claims should be dismissed because the NJWHL provides a private right of action only for minimum wage violations, not for overtime compensation violations like those alleged by Thompson. Making a purely legal argument, Defendants contended that the phrase “minimum fair wage” as cited in N.J.S.A. 34:11-56a25 excludes overtime compensation. The provision states, in pertinent part:
If any employee is paid by an employer less than the minimum fair wage to which such employee is entitled under the provisions of this act or by virtue of a minimum fair wage order such employee may recover in a civil action the full amount of such minimum wage less any amount actually paid to him or her by the employer . . .
N.J.S.A. 34:11-56a25. Admitting that the New Jersey courts have not directly ruled on this issue, the Court was faced with predicting how the New Jersey Supreme Court would resolve this question.,Ultimately, after reviewing (a) the language of the NJWHL; (b) New Jersey’s broad interpretation of the NJWHL; and (c) numerous New Jersey cases that assume such a private right exists, the Court found that the New Jersey Supreme Court would find an express right in the NJWHL to recover unpaid overtime compensation.
Specifically, the Court reasoned, first, that although the cited section of the NJWHL does not use the word “overtime,” the same provision’s statute of limitations does, which strongly suggests that the New Jersey legislature intended that the NJWHL include an express private right of action to recover unpaid overtime payments. Second, New Jersey courts have repeatedly emphasized that the NJWHL is to be construed broadly and that it was purposely drafted in parallel with the FLSA. Finally, the Court identified numerous cases wherein New Jersey courts have analyzed overtime claims in detail without questioning whether they exist including, but not limited to, Iliadis v. Wal-Mart Stores, Inc., which held that uncertainty about damages does not foreclose claims to recover unpaid overtime compensation under the NJWHL, and In re Raymour & Flanigan Furniture, which found that a furniture store’s trucking operation was not a separate establishment and the store must pay its trucking operation employees overtime under the NJWHL.
Based upon the above, the Court held that a private right of action to recover unpaid overtime compensation exists under the NJWHL and such a claim would be recognized by the New Jersey courts if a challenge was brought.
The Bottom Line. Misclassification under the FLSA and NJWHL continues to be a serious issue. If you haven’t already done so, it would be wise to contact counsel to conduct a classification audit of your workforce to ensure that those entitled to overtime compensation are, in fact, being compensated correctly.