THOMPSON v. REAL ESTATE MORTGAGE NETWORK, INC. et al

Filing 106

OPINION/ORDER denying 52 Motion for Judgment on the Pleadings. Signed by Judge Kevin McNulty on 5/22/15. (DD, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

Civ. No. 2:11-1494

Patricia THOMPSON,

(KM)(MAH)
Plaintiff,
OPINION & ORDER

V.

REAL ESTATE MORTGAGE NETWORK,
INC., Security Atlantic Mortgage
Company, Inc., Noel Chapman, and
Samuel Lamparello,
Defendants.

KEVIN MCNULTY, U.S.D.J.:
Plaintiff Patricia Thompson sues her former employers for allegedly
failing to compensate her for overtime work, in violation of the Fair Labor

§ 20 1—219 and the New Jersey Wage
and Hour Law (“NJWHL”), N.J. Stat. Ann. § 34:1 1—56a—34: 1 1—56a38.
Standards Act (“FLSA”), 29 U.S.C.

Her employers seek to dismiss the state-law claim only. This matter
comes before the Court on the motion (ECF No. 52) of Defendants Real
Estate Mortgage Network, Inc. (“REMN”), Security Atlantic Mortgage
Company, Inc. (“SAMC”), Noel Chapman, and Samuel Lamparello
as to
(collectively, the “Employers”) for partial judgment on the pleadings
Count II of the Amended Complaint, pursuant to Fed. R. Civ. P. 12(c).
For the reasons set forth below, Defendants’ motion is DENIED.

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I.

BACKGROUND’
a. Facts

Patricia Thompson, a New Jersey resident, was employed as an
underwriter at SAMC and REMN. (Am. Compi. 5, ECF No. 27.) She
worked for SAMC from June 8, 2009 to February 2010 and for REMN
from February 2010 to August 5, 2010. (Id.)
Thompson alleges that she and other similarly situated
of
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individuals were employees of REMN and SAMC within the meaning
the FLSA, 29 U.S.C.

§ 203(e)(1), (g) and the NJWHL, N.J. Stat. Ann.

34:11—56a1(i), (g), (h). (Id. ¶J6—7.)
Defendants REMN and SAMC, both New Jersey corporations, are
nationwide direct mortgage lenders. (Id. ¶9, 12.) REMN and SAMC are
alleged to be employers or joint employers within the meaning of the
FLSA, 29 U.S.C. § 203(a), (d), (r), (s)(1)(A), and the NJWHL, N.J. Stat.
Ann. 34:11—56a1(g). (Id. ¶1J10—11, 13—14.)
Defendant Chapman, a New Jersey resident, was at all relevant
. (Id.
times the co-owner and Executive Vice President and officer of SAMC
.
¶17.) In 2011, Chapman became an Executive Vice President of REMN
(Id.)
Defendant Lamparello, a New Jersey resident, was at all relevant
e
times the co-owner and President of SAMC. (Id. ¶22.) Lamparello becam
an officer of REMN in 2011. (Id.)
Thompson alleges that the REMN and SAMC failed to properly
compensate her with overtime pay for time worked in excess of forty
house in a work week. (Id. ¶J34, 67.) Specifically, she states that her

The facts that follow are taken from the Amended Complaint. (ECF No.
25.) Solely for the purposes of this motion, they are assumed to be true.
2
This Opinion does not address any issues regarding class certification,
consideration of which would be premature.
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employers misclassified her as an exempt, salaried employee, who
therefore was ineligible to receive overtime pay. (Id. p34, 59—6 1.)
Thompson alleges that she regularly worked more than eight hours per
day and more than forty hours per week without overtime compensation.
(Id. ¶46.)
Thompson brings claims under the FLSA, 29 U.S.C.
and the NJWHL, N.J. Stat. Ann.

§ 207 (Count I)

§ 34:1 1—56a--34: 1 1—56a38 (Count II).

This Court has subject matter jurisdiction over the federal-law
claim pursuant to 28 U.S.C. § 1331 and the FLSA, 29 U.S.C. § 2 16(b).
This Court exercises supplemental jurisdiction over Thompson’s state—
law claim pursuant to 28 U.S.C.

§ 1367(a).

b. Procedural history
Thompson first filed her complaint on March 16, 2011. On
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December 30, 2011, District Judge Dennis M. Cavanaugh granted the
Employers’ motion to dismiss the complaint under Fed. R. Civ. P. 12(b)(6)
for failure to plead with the requisite specificity. (ECF Nos. 23, 24.)
On January 26, 2012, Thompson filed her amended complaint.
(ECF No. 25.) On August 31, 2012, Judge Cavanaugh once again
dismissed Thompson’s complaint for failure to plead with the requisite
specificity. (ECF Nos. 38, 39.)
On April 3, 2013, the Third Circuit vacated and remanded Judge
Cavanaugh’s January 26, 2012 opinion. Thompson v. Real Estate
Mortgage Network, 748 F.3d 142 (3d Cir. 2014) (ECF No. 44). This Court
entered an order implementing the Third Circuit’s mandate on May 22,
2014. (ECF No. 47.)
The Employers now move for judgment on the pleadings as to the
second count of the amended complaint, brought under the New Jersey
On May 15, 2014, after the retirement of Judge Cavanaugh, the case was
reassigned to me. (ECF No. 45.)

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Wage and Hour Law.
Neither Judge Cavanaugh nor the Third Circuit considered the
Employers’ current argument regarding the NJWHL, which is presented
for the first time in this motion.
II.

DISCUSSION
a. Standard for judgment on the pleadings
A motion for judgment on the pleadings pursuant to Federal Rule

of Civil Procedure Rule 12(c) is often indistinguishable from a motion to
dismiss, except that it is made after the filing of a responsive pleading.
Federal Rule of Civil Procedure 12(h)(2) “provides that a defense of failure
to state a claim upon which relief can be granted may also be made by a
motion for judgment on the pleadings.” Turbe v. Gov’t of Virgin Islands,
938 F.2d 427, 428 (3d Cir. 1991). Accordingly, when a Rule 12(c) motion
asserts that the complaint fails to state a claim, the familiar Rule 12(b)(6)
standard applies. Id.
Rule 12(b)(6) provides for the dismissal of a complaint, in whole or
in part, if it fails to state a claim upon which relief can be granted. The
defendant, as the moving party, bears the burden of showing that no
claim has been stated. Animal Science Products, Inc. v. China Minmetals
Corp., 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the purposes of a
motion to dismiss, the facts alleged in the complaint are accepted as true
and all reasonable inferences are drawn in favor of the plaintiff. N.J
Carpenters & the Trustees Thereof v. Tishman Const. Corp. of N.J, 760
F.3d 297, 302 (3d Cir. 2014).
b. Analysis of the NJWHL
The Employers make a pure argument of law. They contend that
the NJWHL provides a private right of action only for minimum wage
violations, not for overtime compensation violations like the ones alleged
here. (Defs. Mot. 5, ECF No. 52.) They cite to the text of the statute,

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which states:
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. Stat. Ann. § 34:1 l-56a25 (West). The Employers argue that the
phrase “minimum fair wage” excludes overtime compensation, and that
therefore there is no private right of action to recover unpaid overtime
compensation. The Employers make their argument solely under the
NJWHL; they concede that such a private right of action exists under the
FLSA. (Defs. Mot. 5-6).
New Jersey courts have not directly ruled on the issue presented
by the Employers. This Court must therefore “predict how the New
Jersey Supreme Court would resolve this case.” See Trcwelers Indem. Co.
v. Dammann & Co., 594 F.3d 238, 244 (3d Cir. 2010) (diversity case;
citation omitted). “In making such a prediction, [this Court mayj consider
relevant state precedents, analogous decisions, considered dicta,
scholarly works, and any other reliable data tending convincingly to
show how the highest court in the state would resolve the issue at hand.”
Id. at 244 (internal quotation and citation omitted).
Based on (1) the language of the NJWHL; (2) New Jersey’s broad
interpretation of the NJWHL; and (3) numerous New Jersey cases that
assume such a private right exists, I find that the New Jersey Supreme
Court would find an express right in the NJWHL to recover unpaid
overtime compensation.
i.

The language of the NJWHL

Although the cited section of the NJWHL does not use the word
“overtime,” the same statute’s limitations provision does. That strongly
suggests that the New Jersey legislature intended for the NJWHL to

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include an express private right of action to recover unpaid overtime
payments.
The Employers’ argument relies on the lack of a definition of the
term “minimum fair wage” in the section of the NJWHL that confers a
private right of action. Without a specific definition, they say, a court
cannot stretch that term to include overtime compensation. N.J. Stat.
Ann. § 34:1 1-56a25 (West). It is not immediately apparent to me that a
“minimum fair wage” excludes overtime.
Be that as it may, the NJWHL’s statute of limitations section—
titled “Limitations; commencement of action”—does refer explicitly to
overtime compensation:
No claim for unpaid minimum wages, unpaid overtime
compensation, or other damages under this act shall be valid
with respect to any such claim which has arisen more than 2
years prior to the commencement of an action for the
recovery thereof. In determining when an action is
commenced, the action shall be considered to be commenced
.; or, where an audit
on the date when a complaint is filed
Industry discloses a
by the Department of Labor and
probable cause of action for unpaid minimum wages, unpaid
.; or where a cause of action
overtime compensation [etc.}
is commenced in a court of appropriate jurisdiction.
.

.

N.J. Stat. Ann.

.

.

§ 34:11-56a25.1 (West) (emphasis added).

If the State legislature did not intend to create a private right of
action for overtime compensation, this language is inexplicable. The New
Jersey legislature would not have prescribed a limitations period for a
nonexistent cause of action.

ii. NJWHL interpreted broadly and in parallel
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.
The New Jersey Supreme Court has declared that the NJWHL

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should be interpreted liberally in order to effectuate its remedial purpose
of protecting employees:
The [NJ]WHL is designed to protect employees from unfair
wages and excessive hours. The statute should be construed
The [NJjWHL
liberally to effectuate its purpose.
minimum wage but also an overtime
establishes not only a
rate for each hour of work in excess of forty hours in any
week for certain employees.
.

.

.

Hargrove u. Sleepy’s, LLC, 106 A.3d 449, 458 (N.J. 2015) (internal
quotations and citations omitted); see also New Jersey Dep’t of Labor v.
Pepsi-Cola Co., 784 A.2d 64, 66 (2001) (“The remedial purpose of the
Wage and Hour Law dictates that it should be given a liberal
construction.”).
The New Jersey Supreme Court has also emphasized the similarity
between the FLSA and the NJWHL:
Of greater significance, however, is the purpose of both
statutes. Like FLSA, the [NJ]WPL and [NJjWHL address the
most fundamental terms of the employment relationship.
The [NJIWHL is designed to protect employees from unfair
wages and excessive hours. To that end, the [NJ]WHL
establishes a minimum wage for employees and the overtime
rate for each hour of work in excess of forty hours in any
week. N.J.S.A. 34:1 1—56a4. Statutes addressing similar
by the same
concerns should resolve similar issues
standard.
.

.

.

.

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Id. at 463 (citations omitted). The FLSA includes a right of action to
recover withheld overtime payments; the principle of parallel
construction suggests that the NJWHL be interpreted the same way.
Putting the liberal construction and parallel construction canons
together, I find it difficult to conclude that the NJWHL gives employees
fewer or narrower rights than the FLSA.

The NJWPL is the New Jersey Wage Payment Law, N.J. Stat. Ann. §
34:11-4.1—4.14 (West).
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iii. New Jersey cases
For decades, New Jersey courts have assumed that there is a
private right of action for unpaid overtime compensation under the
NJWHL. Given that a plaintiff could sue under the FLSA anyway, to
question it probably seemed fruitless.
Numerous New Jersey courts have analyzed overtime claims in
detail without questioning whether they exist. See, e.g., Iliadis v. Wal
Mart Stores, Inc., 922 A.2d 710, 722 (N.J. 2007) (ruling that uncertainty
about damages does not foreclose claims to recover unpaid overtime
compensation under the NJWHL); Clarke v. Essex Valley Health Care,
Inc., No. A-3876-12T3, 2014 WL 4843972 (N.J. Super. Ct. App. Div. Oct.
1, 2014) (stating that the NJWHL requires overtime pay at one-and-onehalf times the regular hourly wage and that the statute of limitations for
any such claim is two years); Wagner v. Blue Sky Classic Cars, L.L.C., No.
A-4058-10T3, 2012 WL 5381720 (N.J. Super. Ct. App. Div. Nov. 5, 2012)
(affirming an award for failure to pay overtime wages under NJWHL);
Hearn v. Rite Aid Corp., No. A-2009-1OT1, 2012 WL 996603 (N.J. Super.
Ct. App. Div. Mar. 27, 2012) (discussing an exemption to the overtime
compensation requirement of the NJWHL); Anderson v. Phoenix Health
Care, Inc., No. A-2607-10T2, 2011 WL 5554518 (N.J. Super. Ct. App.
Div. Nov. 16, 2011) (concluding that nurses were not entitled to overtime
under the NJWHL “so long as they are compensated in excess of the
weekly minimum” contained in N.J.A.C. 12:56-7.3(a)(5)); Karanjawala v.
Associated Humane Societies, Inc., No. A-3560--08T2, 2010 WL 4025911
(N.J. Super. Ct. App. Div. Aug. 20, 2010) (affirming an award under the
NJWHL for a defendant’s failure to pay overtime compensation); In re
Raymour & Flanigan Furniture, 964 A.2d 830 (N.J. Super. Ct. App. Div.
2009) (finding that a furniture store’s trucking operation was not a
separate establishment and that the furniture store must pay its
trucking operation employees overtime at one-and-one-half times the

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regular hourly wage under the NJWHL); Mosley v. Femina Fashions, Inc.,
811 A.2d 910 (N.J. Super. Ct. App. Div. 2002) (finding that evidence was
sufficient for jury to estimate damages for plaintiff’s NJWHL claim based
on defendant’s failure to pay overtime compensation); New Jersey Dep’t
of Labor v. Pepsi-Cola, No. A-918-00T5, 2002 WL 187400 (N.J. Super. Ct.
App. Div. Jan. 31, 2002) (analyzing exceptions to the NJWHL’s overtime
requirement); Yellow Cab Co. of Camden v. State, 312 A.2d 870 (N.J.
Super. Ct. App. Div. 1973) (concluding that a taxicab company was not
exempt from the overtime provision of the NJWHL because it was not a
“common carrier”).
The best predictor of what New Jersey courts would do is what
they have done. These cases strongly suggest that a private right of
action to recover unpaid overtime compensation exists under the NJWHL
and would be recognized by the New Jersey courts if a challenge were
brought.
ORDER
I find that the New Jersey Supreme Court would find a private
cause of action exists under the NJWHL to recover unpaid overtime
compensation. Accordingly, based on this Opinion, and for good cause
shown;
IT IS this 22nd day of May, 2015
ORDERED that Defendants’ motion for judgment on the pleadings
as to Count II of Plaintiff’s Amended Complaint (ECF No. 52) is DENIED.

Kevin McNulty
United States DistrictJud

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