New Jersey Welcomes Representative Wage Claims

Key Takeaways:

• The New Jersey Appellate Division recently ruled that employees may pursue representative claims under the New Jersey Wage and Hour Law (NJ WHL) and Prevailing Wage Act (NJ PWA) without first satisfying New Jersey's class certification requirements.
• The decision also confirmed a statute of limitations defense: NJ WHL and related New Jersey Earned Sick Leave Law (NJ ESLL) claims based on pre-Aug. 6, 2019, conduct remain subject to a two-year limitations period, while NJ PWA claims are subject to a six-year limitations period.
• This decision may very well lead to more representative wage-and-hour actions in New Jersey Superior Court.

Background and Procedural History

On June 29, the New Jersey Appellate Division issued its decision in Martinez v. T. Slack Environmental Services, Inc., a wage-and-hour case involving claims under the NJ WHL, NJ PWA and NJ ESLL. The ruling expands the pathway for representative wage litigation in New Jersey while preserving an important statute of limitations defense for employers.

Plaintiff Juan Martinez worked for T. Slack Environmental Services Inc. (T. Slack) as a nonexempt employee from 2006 through 2019 and alleged that he and other hourly workers were subject to common employer pay practices that resulted in the underpayment of wages.

In February 2020, Martinez filed suit against T. Slack and its principal on behalf of himself and other similarly situated hourly employees. He asserted claims under the NJ WHL, NJ PWA and NJ ESLL, alleging that T. Slack:

• Paid him at a lower rate even when he allegedly performed work that should have been paid at higher prevailing wage rates
• Miscalculated overtime and earned sick leave by using a lower rate, rather than a blended or weighted rate, when employees worked in multiple classifications in the same workweek
• Failed to compensate employees for certain pre- and post- shift work

After discovery, Martinez moved to certify a representative action under the NJ WHL and NJ PWA. The trial court granted the motion, designated Martinez as the representative and applied a six-year look-back period to all claims. T. Slack appealed.

The Appellate Division's Ruling

The Appellate Division addressed two principal issues: (1) whether NJ WHL and NJ PWA representative actions must satisfy New Jersey's traditional class certification requirements (under New Jersey Rule 4:32-1;) and (2) which limitations period applies to each statutory claim. The court affirmed in part and reversed in part.

• Representative Actions May Proceed Without Class Certification

The court rejected T. Slack's argument that Martinez was required to satisfy New Jersey's class certification rule - which requires, among other things, numerosity, commonality, typicality and adequacy of representation - before seeking relief on behalf of other employees. In doing so, the court relied on Cano v. County Concrete Corp., which involved a representative action under the NJ ESLL. The Cano court held that the NJ ESLL permits employees to bring representative actions on behalf of similarly situated workers through its incorporation of the NJ WHL's violations and remedies provision (N.J.S.A. 34:11-56a25). Cano further emphasized that neither the NJ WHL nor the NJ ESLL requires plaintiffs to obtain class certification under Rule 4:32 or to comply with collective action procedures before pursuing representative claims.

Building on Cano's reasoning, the Martinez court ruled that representative actions brought directly under the NJ WHL are also not subject to Rule 4:32 class certification requirements. The Appellate Division further applied the holding to claims under the NJ PWA, concluding that the statute, like the NJ WHL, expressly authorizes actions on behalf of similarly situated workers and does not require compliance with Rule 4:32.

The court also declined to adopt the Fair Labor Standards Act's opt-in framework, emphasizing that neither the NJ WHL nor the NJ PWA requires a named plaintiff to identify every such employee at the outset of the litigation. It determined that Martinez's complaint sufficiently placed T. Slack on notice that he sought relief on behalf of other hourly employees allegedly subjected to the same pay practices, a conclusion further supported by discovery demonstrating the existence of a similarly situated group of employees.

• Limitations Periods Turn on the Statute Asserted

While finding in favor of Martinez on the certification question, the Appellate Division handed a win to T. Slack on the statute of limitations question. Relying on Maia v. IEW Construction Group, which held that the Aug. 6, 2019, amendments to the NJ WHL - including the extension of the limitations period from two to six years - apply only prospectively. The court held that the motion court erred by applying a blanket six-year look-back period to Martinez's pre-amendment NJ WHL and related NJ ESLL claims, which were subject to a two-year limitations period.

The Appellate Division, however, affirmed a six-year limitations period for NJ PWA claims because the NJ PWA does not contain its own civil limitations period, and the court treated unpaid prevailing-wage claims as comparable to breach of contract or economic injury claims subject to New Jersey's six-year limitations period.

Employer Considerations

Martinez has potentially far-reaching consequences for New Jersey employers because it permits NJ WHL and NJ PWA representative claims to proceed outside the traditional class and collective certification procedures. This ruling may limit employers' early procedural challenges and give plaintiffs a broader path to pursue representative wage-and-hour claims against their employers.

Although not readily applicable to most forthcoming lawsuits, the decision reminds employers facing NJ WHL, NJ PWA and related claims to evaluate any timing-based defenses, particularly for alleged NJ WHL and related NJ ESLL violations that predate Aug. 6, 2019.