NJ DEPT. OF LABOR v. Pepsi-Cola Co.

765 A.2d 760, 336 N.J. Super. 532
CourtNew Jersey Superior Court Appellate Division
DecidedJanuary 17, 2001
StatusPublished
Cited by3 cases

This text of 765 A.2d 760 (NJ DEPT. OF LABOR v. Pepsi-Cola Co.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NJ DEPT. OF LABOR v. Pepsi-Cola Co., 765 A.2d 760, 336 N.J. Super. 532 (N.J. Ct. App. 2001).

Opinion

765 A.2d 760 (2001)
336 N.J. Super. 532

NEW JERSEY DEPARTMENT OF LABOR, Petitioner-Respondent, and
Teamsters Local 125 and 185 Individual Claimants, Intervenors-Respondents,
v.
PEPSI-COLA COMPANY, Respondent-Appellant.

Superior Court of New Jersey, Appellate Division.

Argued October 12, 2000.
Decided January 17, 2001.

*761 Wayne J. Positan, Roseland, argued the cause for appellant (Lum, Danzis, Drasco, Positan & Kleinberg and Kilpatrick Stockton, attorneys; Mr. Positan, of counsel; Richard A. West, Jr., on the brief).

Karen A. Du Mars, Deputy Attorney General, argued the cause for respondent New Jersey Department of Labor (John J. Farmer, Jr., Attorney General of New Jersey, attorney; Nancy Kaplen, Assistant Attorney General, of counsel; Ms. Du Mars, on the brief).

James L. Linsey, New York City, argued the cause for respondent Teamsters Local 125 and 185 Individual Claimants (Cohen, Weiss and Simon, attorneys; Mr. Linsey, on the brief).

Before Judges KING and AXELRAD.[1]

The opinion of the court was delivered by KING, P.J.A.D.

This appeal implicates the power of the Commissioner of Labor to award prejudgment interest as an element of damages in a wage-and-hour dispute over payment of overtime. We conclude that the Commissioner has this power and affirm.

I

The matter arises out of an enforcement action by the New Jersey Department of Labor (DOL) for payment of overtime wages. Pepsi-Cola Corporation appeals the Commissioner's order that it must pay prejudgment interest on the owed back wages.

On November 30, 1995 the DOL notified Pepsi that it was in violation of N.J.S.A. 34:11-56a4 (minimum and overtime rate exceptions) and N.J.S.A. 34:11-4.2 (time, mode of payment and paydays) for failure to pay overtime to "fountain drivers." These fountain drivers deliver syrup and other bulk products used in dispensing machines, in contrast to products in cans and bottles. The DOL assessed Pepsi $1,885,098.68 in back wages, a $2,000 penalty and $188,509.87 in administrative fees. The notice of violation told Pepsi it could appeal within fifteen days.

In December 1995 Pepsi requested a hearing before the Office of Administrative Law. On August 19, 1996 the Administrative Law Judge permitted Teamsters Locals 125 and 185 (Teamsters) representing Pepsi's drivers to intervene. N.J.A.C. 1:1-16.1. On October 15, 1996 the ALJ issued a prehearing order which limited the hearing to the determination of liability to about twelve drivers—the "test claimants." The order provided

that upon the making of a determination with respect to the liability for overtime as to the approximately 12 individual claimants, all counsel shall be given an *762 opportunity to seek an order or the determination that the decision(s) with respect to the 12 individual claimants shall apply to all of the remaining claimants.

On February 24, 1998 Pepsi conceded that three fountain drivers James Waggner ($1,797.70), Antonio Petillo ($7,082.26), and Ralph Cash ($1,088.48) were entitled to overtime compensation and not exempt as "outside sales persons" under N.J.A.C. 12:56-7.4. On November 18, 1998 the Teamsters moved for partial final judgment and sanctions and requested back wages and prejudgment interest on those wages for the three men. On March 16, 1998 the ALJ awarded the three drivers back wages but declined to award prejudgment interest, citing an absence of legal authority.

On April 14, 1999 Commissioner Gelade of the DOL issued a final agency decision affirming the ALJ's award of back wages but reversing the decision on prejudgment interest. The Commissioner found that as a matter of equity he had the discretion to make the award of prejudgment interest, particularly because of the delay in paying back wages for six years. We granted a stay of the DOL's order pending this appeal.

II

Pepsi first asserts that the DOL violated its due process rights by failing to inform it of the possible imposition of prejudgment interest. We disagree. We conclude that Pepsi had adequate notice and the ability to participate in the adjudicative process at the administrative level and in this court.

Notice is defined by the Due Process Clause of the Fourteenth Amendment to the United States Constitution and Article 1, Paragraph 1 of the New Jersey State Constitution.

Due process is a flexible concept that calls for such procedural protections as fairness demands.... The essential components of due process are notice and an opportunity to be heard.... Thus, a party's due process rights are not violated if it is held liable for a judgment arising out of an action in which it participated or had the opportunity to be heard....
[Mettinger v. Globe Slicing Mach. Co., 153 N.J. 371, 389, 709 A.2d 779 (1998) (citations omitted).]

The Teamsters provided notice of this claim for prejudgment interest in their notice of motion for partial final judgment on November 18, 1998 demanding "interest calculated at the statutory rate." Pepsi prevailed on the point before the ALJ but lost on it before the Commissioner. The written submissions by each party to the Commissioner and the agency specifically argued the prejudgment interest point. And, Pepsi has had a full argument on this point before us. We find no merit to the due process claim and certainly no error "capable of producing an unjust result." R. 2:10-2.

III

Next, Pepsi asserts that the Commissioner did not have the statutory authority to impose prejudgment interest. In the alternative Pepsi argues that if the Commissioner did have such authority, he should have proceeded by formal rule-making, pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -24 (APA), not by adjudication. Again, we disagree.

The Commissioner articulated his award of prejudgment interest this way:

However, with regard to the issue of the legal propriety of including within the back pay awards interest calculated at the statutory rate, I note that respondent's failure to pay appropriate overtime wages to the intervenors for approximately six years mandates an equitable response. I concur with counsel for the intervenors that it would be unfair to permit respondent to, in essence, reap a financial reward for its *763 failure to meet its statutory obligations to its workers. Furthermore, I note that an award of payment of interest at the statutory rate has not hitherto been addressed by a State court. Nevertheless, federal case law indicates that a court, within the context of federal labor law, may award such interest where damages from a breach of contract are precisely ascertainable. See, e.g., Glass, Molders, Pottery, Plastics and Allied Workers International Union v. Owens-Illinois, Inc., 758 F.Supp. 962, 975 (D.N.J.1991), aff'd w/o op., 941 F.2d 1201 (3d Cir.1991); Gulf & Western Manufacturing Co. v. United Steelworkers of America, District No. 9, 694 F.Supp. 38, 46 (D.N.J.1988), aff'd, 860 F.2d 1074 (3d Cir.1988). It is my belief that respondent's failure to pay overtime wages to its workers constitutes a breach of law and of trust with its employees. The latter have been deprived both of the individual amounts owed to each and to the value of the wages at the time at which they specifically accrued. The wage laws of this State are designed to insure equity to workers and not unjust enrichment to an errant employer.

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Related

Garzon v. Board of Review
850 A.2d 524 (New Jersey Superior Court App Division, 2004)
New Jersey Department of Labor v. Pepsi-Cola Co.
784 A.2d 64 (Supreme Court of New Jersey, 2001)

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