NJ wage-hour representative actions don’t require class certification, appeals court rules

By Robert Santos*

A recent decision by the New Jersey Appellate Division provides plaintiffs greater leeway when bringing representative actions under the New Jersey Wage and Hour Law.

Plaintiff Juan Martinez alleged that his employer, T. Slack Environmental Services, failed to properly pay prevailing wages, overtime, compensation for off-clock work, and earned sick leave. Bringing claims under New Jersey’s Wage and Hour Law, Prevailing Wage Act, and Earned Sick Leave Law, Mr. Martinez sought relief not only for himself but also for similarly situated employees. The trial court authorized the matter to proceed as a representative action, and the employer appealed to the state Appellate Division.

The employer argued that the plaintiff had not satisfied the class action requirements of New Jersey Rule 4:32-1 and that a representative action was not available outside of that Rule. (At the link, scroll down to “4:32-Class Actions,” click on the link, and then click on “4:32-1-Requirements for Maintaining Class Action.”)

Appeals court: Representative actions and class actions are not the same

The appellate division upheld the lower court decision for the most part and held that representative actions authorized by the New Jersey wage laws are distinct from class actions and therefore are not subject to the state’s class certification requirements under Rule 4:32-1.

The ruling makes it possible for plaintiffs to bring representative actions under the New Jersey laws on behalf of others without obtaining class certification, making it procedurally easier for plaintiffs – and more difficult for employers.

In reaching this conclusion, the court found the following:

• The state wage-hour law and Prevailing Wage Act expressly authorize employees to sue on behalf of “similarly situated” workers.
• Nothing in either statute incorporates New Jersey’s class action rule or requires plaintiffs to satisfy the procedural prerequisites of Rule 4:32-1.
• Unlike the federal Fair Labor Standards Act, New Jersey’s statutes do not contain an “opt-in” requirement for representative wage actions.
• Plaintiffs are not required to identify or present evidence from other similarly situated employees before proceeding with a representative action. Allegations that other similarly situated employees exist may be sufficient, particularly where discovery confirms that the employer maintained common compensation practices.

The court emphasized that the state legislature intentionally chose broad remedial language allowing employees to pursue claims on behalf of similarly situated workers and declined to apply federal collective action procedures that do not appear in the statutes.

The employer did obtain one significant victory, though.

The court held that the trial court improperly applied a six-year look-back period to the wage-hour claims. The statute of limitations under the Wage and Hour Law was two years until 2019, when the law was amended to increase the limitations period to six years. The trial court had held that the six-year period applied, but the Appellate Division reversed that part of the decision, holding that the two-year period applied to claims arising before the 2019 amendment took effect. By contrast, prevailing wage claims under the Prevailing Wage Act are governed by the six-year period because they are contractual in nature.

Implications for New Jersey employers

This decision further expands the ability of employees to pursue broad wage and hour litigation in New Jersey.

Employers covered by these state laws should keep in mind the following:

• This decision could result in an increase in representative actions filed under the Wage and Hour Law, Prevailing Wage Act, and Earned Sick Leave Law without attempts to seek formal class certification.
• Employers may be required to disclose contact information for similarly situated employees early in litigation so that notice can be provided.
• Common payroll policies affecting multiple employees are likely to remain fertile ground for representative litigation in New Jersey, as they already are under the FLSA and other states’ wage-hour laws.
• Employers should review overtime calculations, blended-rate practices, prevailing wage compliance, off-clock work policies, and earned sick leave calculations to ensure consistent compliance.

For assistance with New Jersey wage and hour laws, please contact an attorney in our Princeton or Northern New Jersey office.

*Robert Santos is a rising third-year student at Washington & Lee University School of Law, who is clerking for the summer in Constangy’s Princeton Office.