UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

 

 :

RICHARD SNYDER, :

: Civ. A. No. 11-0003 (NLH)(AMD)

Plaintiff, :

:

v. :

: OPINION

DIETZ & WATSON, INC., et al., :

:

Defendants. :

 

APPEARANCES:

Justin L. Swidler, Esq.

Swartz Swidler, LLC

1878 Marlton Pike East 

Suite 10 

Cherry Hill, NJ 08003 

Counsel for Plaintiff

Alan C. Milstein, Esq.

Jeffrey P. Resnick, Esq.

Sherman, Silverstein, Kohl, Rose & Podolsky, PC 

East Gate Corporate Center 

308 Harper Drive 

Suite 200 

Moorestown, NJ 08057

Counsel for Defendants

HILLMAN, District Judge:

In this action, Plaintiff, Richard Snyder, contends that his

former employer, Defendant Dietz & Watson, and its president and

vice president, Defendants Louis and Christopher Eni, wrongfully

withheld money from Plaintiff’s wages, used such money for their

own benefit, and retaliated against Plaintiff by terminating his

employment when he complained of the alleged wage violations. 

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Presently before the Court is Defendants’ motion to dismiss

Plaintiff’s amended complaint pursuant to FED. R. CIV. P. 12(b)(6)

on the ground that Plaintiff failed to follow the grievance

procedures available to him under the collective bargaining

agreement to which his employment was subject. Defendants also 1

argue that Plaintiff’s claims are preempted under the Labor

Management Relations Act (“LMRA”) and the National Labor

Relations Act (“NLRA”), and that Plaintiff fails to state a claim

for violations of the Racketeer Influenced Corrupt Organizations

Act (“RICO”) and the Fair Labor Standards Act (“FLSA”). For the

reasons that follow, Defendants’ motion to dismiss the amended

complaint will be granted in part and denied in part.

I. JURISDICTION

Plaintiff sets forth claims derived from both federal and

New Jersey law. The Court has subject matter jurisdiction over

Plaintiff’s federal claims pursuant to 28 U.S.C. § 1331. 

Further, the Court may exercise supplemental jurisdiction over

Plaintiff’s related state law claims pursuant to 28 U.S.C. §

1. Subsequent to Defendants’ filing of a motion to dismiss the

original complaint, Plaintiff filed an amended complaint.

Defendants then filed a motion to dismiss the amended complaint. 

Accordingly, Defendants’ motion to dismiss the original complaint

will be dismissed as moot. Moreover, although Plaintiff filed

the amended complaint more than twenty-one days after the filing

of the motion to dismiss, Defendants do not object to the filing

of the amended complaint on timeliness grounds. See Fed. R. Civ.

P. 15 (party may amend its pleading once as a matter of course

within 21 days of service of motion to dismiss or service of

answer).

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1367.

II. BACKGROUND

Plaintiff was employed as a driver for Dietz & Watson, and

the terms of his employment were governed by a collective

bargaining agreement (hereinafter, “CBA”) between Dietz & Watson

and the Food Driver Salesmen, Dairy & Ice Cream Workers, Local

No. 463 Union. Plaintiff contends that in 2000, when he was

first given a permanent driving route, a Dietz & Watson employee,

Louisa Bergey, told Plaintiff that a certain amount of money

would be deducted from his paycheck to cover any shortages in the

money collected from customers. (See Am. Compl. ¶¶ 12-16.) 

Plaintiff was purportedly advised that once any shortages were

paid to Defendants, the remaining funds, if any, would be

returned to Plaintiff. (Id. at ¶ 17.) Plaintiff avers that in

2007, he was advised via telephone by Ms. Bergey that she would

begin to prospectively deduct $75 per pay period to be placed in

an escrow account to cover future shortages that had not yet

occurred. (Id. at ¶ 18.) Over Plaintiff’s objection, $75 per

pay period was withheld from Plaintiff’s paycheck under a

purportedly mandatory policy. (Id. at ¶¶ 19-21.) 

Plaintiff contends that Defendants withheld thousands of

dollars per year under this alleged mandatory policy, with

assurances that such money was being placed in escrow. (Id. at ¶

25.) Defendants, however, purportedly refused to provide an

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accurate accounting of the escrow account and refused to permit

Plaintiff to withdraw money from the escrow account. (Id. at ¶

26.) Plaintiff avers that Defendants never set up an escrow

account and kept the wage deductions for their own benefit. (Id.

at ¶¶ 27, 35.) Moreover, Plaintiff asserts that when he

complained about the wage deductions to his supervisors in 2009,

Defendants retaliated against Plaintiff by terminating his

employment. (Id. at ¶¶ 36-38.) Plaintiff also asserts that for

the final pay period, he was paid only one penny. (Id. at ¶ 42.)

Based on the foregoing allegations, Plaintiff asserts in the

amended complaint claims for a purported RICO violation against

the individual defendants and the corporate defendant (Counts I

and II). Plaintiff also asserts claims for fraud (Count III),

unjust enrichment (Count IV), breach of contract (Count V),

breach of fiduciary duty (Count VI), conversion (Count VII),

violations of the New Jersey Wage Payment Law (Count VIII),

violations of the FLSA and the New Jersey Wage and Hour Law

(Count IX), and retaliatory discharge (Count X).

In their motion to dismiss the amended complaint, Defendants

argue that the claims in this case are based on an alleged

violation of the CBA and are federal in nature, notwithstanding

Plaintiff’s attempt to couch his claims in terms of violations of

state law. (See generally, Mem. of Law in Supp. of Defs.’ Mot.

to Dismiss Pl.’s First Am. Compl. (hereinafter, “Defs.’ Br.”) 1-

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5.) Defendants specifically note that Article 9 of the CBA

addresses the wage-deduction practice of which Plaintiff

complains because this provision states that employees “shall be

held responsible for all collections and cash, except from

accounts where the Employer has approved credit.” (Id. at 3-4.) 

Defendants also note that Article 3 of the CBA contains a dispute

resolution clause requiring arbitration of all claims. (Id. at

4.) Defendants argue that Plaintiff’s claims should be dismissed

for failure to exhaust administrative remedies. (Id. at 5.) 

Defendants also argue that the alleged wrongful conduct comes

within the preemptive scope of the NLRA and Section 301 of the

LMRA. (Id.) Further, Defendants challenge Plaintiff’s RICO

claim because Plaintiff has purportedly failed to state a claim,

and Plaintiff’s federal wage claim because Plaintiff purportedly

is exempt from the minimum wage requirements of the FLSA. (Id.)

In opposition, Plaintiff avoids reference to the CBA,

instead couching his claims in terms of an alleged unwritten,

longstanding policy by which Defendants purportedly deduct money

from Plaintiff’s and other drivers’ wages for alleged shortages. 

(See Pl.’s Br. in Opp. to Defs.’ Mot. to Dismiss (hereinafter,

“Pl.’s Opp. Br.”) 1.) Such policy, Plaintiff contends, violates

state law, even though Defendants represented that the deductions

were both legal and mandatory. (Id.) 

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III. DISCUSSION

A. Standard of Review

In this case, Defendants invoke Federal Rule of Civil

Procedure 12(b)(6) in seeking dismissal of Plaintiff’s amended

complaint. When considering a motion to dismiss a complaint for

failure to state a claim upon which relief can be granted

pursuant to Rule 12(b)(6), a court must accept all allegations in

the complaint as true and view them in the light most favorable

to the plaintiff. See Evancho v. Fisher, 423 F.3d 347, 350 (3d

Cir. 2005). A complaint must contain “a short and plain

statement of the claim showing that the pleader is entitled to

relief.” Fed. R. Civ. P. 8(a)(2).

A district court, in weighing a motion to dismiss, asks

“‘not whether a plaintiff will ultimately prevail but whether the

claimant is entitled to offer evidence to support the claims[.]’” 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting

Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft

v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1953 (2009) (“Our

decision in Twombly expounded the pleading standard for ‘all

civil actions[.]’”) (citation omitted). The Third Circuit has

instructed district courts to conduct a two-part analysis in

deciding a motion to dismiss. Fowler v. UPMC Shadyside, 578 F.3d

203, 210 (3d Cir. 2009).

First, a district court “must accept all of the complaint’s

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well-pleaded facts as true, but may disregard any legal

conclusions.” Fowler, 578 F.3d at 210-11 (citing Iqbal, 129 S.

Ct. at 1949). Second, a district court must “determine whether

the facts alleged in the complaint are sufficient to show that

the plaintiff has a ‘plausible claim for relief.’” Id. at 211

(quoting Iqbal, 129 S. Ct. at 1950). “[A] complaint must do more

than allege the plaintiff’s entitlement to relief.” Id. 

“‘[W]here the well-pleaded facts do not permit the court to infer

more than the mere possibility of misconduct, the complaint has

alleged – but it has not ‘show[n]’ - ‘that the pleader is

entitled to relief.’’” Id. (quoting Iqbal, 129 S. Ct. at 1949);

see also Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d

Cir. 2008) (“The Supreme Court’s Twombly formulation of the

pleading standard can be summed up thus: ‘stating . . . a claim

requires a complaint with enough factual matter (taken as true)

to suggest’ the required element. This ‘does not impose a

probability requirement at the pleading stage,’ but instead

‘simply calls for enough facts to raise a reasonable expectation

that discovery will reveal evidence of’ the necessary

element.”)(quoting Twombly, 550 U.S. at 556). 

A court need not credit “‘bald assertions’” or “‘legal

conclusions’” in a complaint when deciding a motion to dismiss. 

In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429–30

(3d Cir. 1997). The defendant has the burden of demonstrating

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that no claim has been presented. Hedges v. United States, 404

F.3d 744, 750 (3d Cir. 2005)(citing Kehr Packages, Inc. v.

Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).

Finally, a court in reviewing a Rule 12(b)(6) motion must

only consider the facts alleged in the pleadings, the documents

attached thereto as exhibits, and matters of public record.

Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998

F.2d 1192, 1196 (3d Cir. 1993), cert. denied, 510 U.S. 1042

(1994). A court may consider “an undisputedly authentic document

that a defendant attaches as an exhibit to a motion to dismiss if

the plaintiff's claims are based on the document.” Id. (citation

omitted). If any other matters outside the pleadings are

presented to the court, and the court does not exclude those

matters, a Rule 12(b)(6) motion will be treated as a summary

judgment motion pursuant to Rule 56. Fed. R. Civ. P. 12(d). 

B. Preemption Under Section 301 of the Labor Management

Relations Act

Section 301(a) of the LMRA provides for federal jurisdiction

over disputes regarding collective bargaining agreements. The

statute states, in relevant part, as follows:

Suits for violation of contracts between an

employer and a labor organization

representing employees in an industry

affecting commerce as defined in this

chapter, or between any such labor

organizations, may be brought in any district

court of the United States having

jurisdiction of the parties, without respect

to the amount in controversy or without

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regard to the citizenship of the parties.

29 U.S.C. § 185(a).

Although the statute expressly addresses only federal

jurisdiction, “this provision is not merely jurisdictional, but

is also one that calls on the federal courts to create a uniform

federal common law of collective bargaining, with the primacy of

arbitral resolution of industrial disputes as its centerpiece.” 

Voilas v. Gen. Motors Corp., 170 F.3d 367, 372 (3d Cir. 1999)

(citing Textile Workers Union of Am. v. Lincoln Mills, 353 U.S.

448, 455-56 (1957)). Section 301 “mandate[s] resort to federal

rules of law in order to ensure uniform interpretation of

collective-bargaining agreements, and thus to promote the

peaceable, consistent resolution of labor-management disputes.” 

Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 404

(1988). As such, § 301 requires “federal courts to fashion a 2

2. In Teamsters v. Lucas Flour Co., 369 U.S. 95 (1962), the

Supreme Court articulated its rationale as to why the terms in

collective bargaining agreements must be determined by federal

law. The Supreme Court stated: “The possibility that individual

contract terms might have different meanings under state and

federal law would inevitably exert a disruptive influence upon

both the negotiation and administration of collective agreements. 

Because neither party could be certain of the rights which it had

obtained or conceded, the process of negotiating an agreement

would be made immeasurably more difficult by the necessity of

trying to formulate contract provisions in such a way as to

contain the same meaning under two or more systems of law which

might someday be invoked in enforcing the contract. Once the

collective bargain was made, the possibility of conflicting

substantive interpretation under competing legal systems would

tend to stimulate and prolong disputes as to its interpretation .

. . [and] might substantially impede the parties’ willingness to

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body of federal common law to be used to address disputes arising

out of labor contracts.” Allis-Chalmers Corp. v. Lueck, 471 U.S.

202, 209 (1985). 

Because § 301 requires the creation of uniform federal labor

law to ensure uniform interpretation of collective bargaining

agreements, and because state laws might produce differing

interpretations of the obligations imposed by such agreements,

the Supreme Court has held that “a suit in state court alleging a

violation of a provision of a labor contract must be brought

under § 301 and be resolved by reference to federal law.” Id. at

210 (citing Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04

(1962)). Thus, “if the resolution of a state-law claim depends

upon the meaning of a collective-bargaining agreement, the

application of state law . . . is preempted” by federal labor

law. Lingle, 486 U.S. at 406. 

The preemptive effect of § 301 extends beyond suits alleging

contract violations, as tort actions are also preempted under §

301 if the resolution of the state law claim depends upon the

meaning of a phrase or term in a collective bargaining agreement. 

Allis-Chalmers, 471 U.S. at 211. In this regard, the Supreme

Court has held that “when resolution of a state-law claim is

substantially dependent upon analysis of the terms of an

agree to contract terms providing for final arbitral or judicial

resolution of disputes.” Lucas Flour, 369 U.S. at 103-04. 

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agreement made between the parties in a labor contract,” the

claim is preempted by § 301 and must be decided pursuant to

federal labor contract law. Id. at 220. 

For example, in Allis-Chalmers, the plaintiff brought a

state-law tort claim against his employer for the alleged badfaith handling of an insurance claim. Id. at 206. The Supreme

Court considered whether the Wisconsin tort remedy for bad-faith

handling of an insurance claim could be applied when the

insurance policy was incorporated by reference in the collective

bargaining agreement between the plaintiff’s union and his

employer. Id. at 204, 214. After examining the collective

bargaining agreement, the Supreme Court noted that there was a

question as to whether the labor contract provided for the right

to have disability payments made in a timely manner. Id. at 215. 

The Supreme Court determined that the plaintiff’s claim was

completely preempted by § 301 because “[t]he duties imposed and

rights established through the state tort . . . derive from the

rights and obligations established by the [collective bargaining

agreement],” and resolution of the suit would thus involve

interpretation of the contract. Allis-Chalmers, 471 U.S. at 217. 

In extending the preemptive effect of § 301 to tort actions,

the Supreme Court noted that the same interest in maintaining

interpretive uniformity and predictability that requires contract

disputes to be resolved through federal law similarly requires

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that the meaning given to a contract phrase or term be subject to

uniform federal interpretation when such interpretation is

necessary to resolve a tort claim. Id. “Thus, questions

relating to what the parties to a labor agreement agreed, and

what legal consequences were intended to flow from breaches of

that agreement, must be resolved by reference to uniform federal

law, whether such questions arise in the context of a suit for

breach of contract or in a suit alleging liability in tort.” Id. 

“Any other result would elevate form over substance and allow

parties to evade the requirements of § 301 by relabeling their

contract claims as claims for tortious breach of contract.” Id. 

The existence of a CBA does not, in itself, prevent an

individual from asserting state-law claims based on an agreement

or obligations independent of the CBA. In Caterpillar Inc. v.

Williams, 482 U.S. 386, 388 (1987), employees of Caterpillar,

Inc. filed suit in state court alleging a state-law breach of

contract claim with respect to individual employment contracts. 

The plaintiffs had been hired for positions covered by a

collective bargaining agreement, but they later assumed other

positions no longer covered by the agreement. Id. When the

plaintiffs were promoted, Caterpillar had allegedly made

statements guaranteeing the plaintiffs’ employment, but

subsequently laid off the plaintiffs. Id. at 389. The

plaintiffs sued, claiming breach of the individual employment

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contracts. Id. at 390. The Supreme Court held that although the

plaintiffs could have asserted a breach of the collective

bargaining agreement, they chose to claim a breach of the

individual employment contracts and, as such, the claims did not

arise under federal law. Id. at 394-95. The Third Circuit has

interpreted Caterpillar as standing for the proposition that

“employees have the option of vindicating their interests by

means of either a section 301 action or an action brought under

state law, as long as the state-law action as pleaded does not

require interpretation of the collective bargaining contract.” 

Voilas, 170 F.3d at 373-74. 

3

Thus, state-law rules that establish rights or obligations

independent of a labor contract are not preempted under § 301. 

Allis-Chalmers, 471 U.S. at 212-13. State-law claims are

independent of a labor contract if they can be resolved without

interpreting the contract itself, “even if dispute resolution

pursuant to a collective-bargaining agreement, on the one hand,

and state law, on the other, would require addressing precisely

the same set of facts[.]” Lingle, 486 U.S. at 409-10. “[T]he

3. Moreover, not all cases that touch upon a collective

bargaining agreement are preempted under § 301. The Supreme

Court has held that the application of state law is preempted by

§ 301 “only if such application requires the interpretation of a

collective-bargaining agreement.” Lingle, 486 at 413; see also

Livadas v. Bradshaw, 512 U.S. 107, 123 (1994) (“[T]he bare fact

that a collective-bargaining agreement will be consulted in the

course of state-law litigation plainly does not require the claim

to be extinguished[.]”). 

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mere fact that a broad contractual protection . . . may provide a

remedy for conduct that coincidentally violates state-law does

not make the existence or the contours of the state law violation

dependent upon the terms of the [collective bargaining

agreement].” Id. at 412-13. The question in a preemption

analysis is not whether the source of a cause of action is statelaw, but whether resolution of the cause of action requires

interpretation of a collective bargaining agreement.

With these principles in mind, the Court now turns to the

pending motion to dismiss to determine whether Plaintiff’s claims

are preempted and subject to dismissal.

1. The Arbitration Clause in the CBA Does Not Require

Arbitration of All Claims

Defendants first argue that all of the claims contained in

the amended complaint are subject to arbitration because the CBA

provides that “[e]very effort shall be made to adjust amicably

between the Company and the Union all grievances, complaints,

differences and disputes” and that any dispute that cannot be

resolved may be submitted to arbitration. (Defs.’ Br. 4.) 

Plaintiff responds that the arbitration provision cannot be so

broadly construed as to mandate arbitration of all statutory and

common law claims. (Pl.’s Opp. Br. 4.) Plaintiff asserts that

to effect such a broad waiver, a CBA must clearly and

unmistakably state that employees have waived their right to a

federal forum for statutory and common law claims. (Id.) 

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A general arbitration provision in a collective bargaining

agreement does not, in itself, require arbitration of all claims

an employee may have against an employer. Defendants’ reliance

on Vaca v. Sipes, 386 U.S. 171, 184 (1967), to support the

argument that all claims must be grieved is misplaced. See Vaca, 

386 U.S. at 184 (employee asserting breach of provision of

collective bargaining agreement must first follow grievance

procedures in agreement). It is true that an employee must

attempt to exhaust the grievance procedures before bringing an

action to enforce rights derived from the CBA, but Vaca does not

stand for the proposition that the grievance procedure must be

followed to vindicate rights that exist independently of the CBA. 

Indeed, if every employee whose employment is subject to a CBA

must grieve every claim – even claims that exist independently of

the rights conferred by the CBA – before resorting to the courts,

the extensive case law concerning Section 301 discussed above

would not exist, for every claim would be subject to the

grievance and arbitration procedures set forth in a CBA

regardless of whether they require interpretation of the

contract.

In Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 72

(1998), the Supreme Court considered whether a general

arbitration clause in a collective bargaining agreement required

an employee to use the arbitration procedure for an alleged

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violation of the Americans With Disabilities Act (“ADA”). The

cause of action in that case arose out of the ADA, not out of

contract, and was distinct from the rights conferred by the CBA. 

Id. at 79. The dispute involved only the meaning of a federal

statute and did not concern the application or interpretation of

the CBA. Id. While noting that there is a presumption of

arbitrability of disputes under Section 301 of the LMRA, the

Supreme Court concluded that such presumption applies only where

a claim requires interpretation or application of the terms of a

CBA. Id. at 78.

An employee’s claims that are based on statutory rights, and

are thus independent of the rights created by a CBA, may only be

subject to arbitration where the CBA contains a “clear and

unmistakable” waiver of a judicial forum for such rights. Id. at

80; see also 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 129 S. Ct.

1456, 1474 (2009) (“We hold that a collective-bargaining

agreement that clearly and unmistakably requires union members to

arbitrate [Age Discrimination in Employment Act] claims is

enforceable as a matter of federal law.”). A collective

bargaining agreement containing only a general provision to

submit all claims to arbitration cannot preclude a lawsuit

concerning an employee’s individual statutory rights. See

Wright, 525 U.S. at 80. 

In this case, as noted above, the arbitration provision

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states only that “all grievances, complaints, differences and

disputes” may be submitted to arbitration. (Defs.’ Br., Ex. B

(CBA) Art. 3.) The CBA does not expressly specify that all

disputes, including those arising independently of the CBA, are

subject to arbitration, nor does the CBA name or incorporate any

federal or state statutes into the arbitration clause. As such,

the provisions of the CBA are too broad and general to

demonstrate the requisite “clear and unmistakable” intent to

submit to arbitration even those claims unrelated to the CBA. 

2. Plaintiff’s Breach of Contract Claim

Plaintiff asserts in Count V a claim for breach of contract

against Defendant Dietz & Watson. To state a claim for breach of

contract, a plaintiff must allege (1) a contract between the

parties; (2) a breach of that contract; (3) damages arising from

the breach of contract; and (4) that the party asserting a breach

of contract claim performed its contractual obligations. 

Frederico v. Home Depot, 507 F.3d 188, 203 (3d Cir. 2007). 

Plaintiff alleges in the amended complaint that Defendant

Dietz & Watson “contracted with Plaintiff to compensate him a set

amount of wages for his work” (Am. Compl. ¶ 80), but Plaintiff

neither identified the contract allegedly breached nor attached

to the complaint a copy of the contract at issue. Defendants

argue, and Plaintiff does not dispute, that the contract at issue

is the CBA. Article 15 of the CBA contains a provision for wages

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to be paid to driver salesmen, which provision refers to a 4

separate schedule attached to the contract. The schedule

provides that “[d]river salesmen will receive . . . [b]ase pay of

one hundred and ten dollars $110.00 per week” plus commissions. 

(Defs.’ Br., Ex. B (CBA) Schedule A.) As the CBA expressly

addresses wages, and Plaintiff fails to identify a separate

contract concerning wages that is the subject of the breach of

contract claim in this case, the Court concludes that the breach

of contract claim is predicated on an alleged breach of the CBA. 

Because the breach of contract claim alleges a violation of

a provision in the CBA, the claim must be brought under § 301. 

Allis-Chalmers, 471 U.S. at 210. Prior to bringing suit,

however, an employee seeking to vindicate personal rights under a

collective bargaining agreement must first attempt to exhaust any

mandatory or exclusive grievance procedures provided in the

agreement. United Paperworkers Int’l Union, AFL-CIO v. Misco,

Inc., 484 U.S. 29, 37 (1987) (“The courts have jurisdiction to

enforce collective-bargaining contracts; but where the contract

provides grievance and arbitration procedures, those procedures

must first be exhausted and courts must order resort to the

private settlement mechanisms without dealing with the merits of

the dispute.”); Angst v. Mack Trucks, Inc., 969 F.2d 1530, 1537

4. Plaintiff alleges that he worked as a driver for Defendant

Dietz & Watson. (Am. Compl. ¶ 11.) 

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(3d Cir. 1992) (“Under federal labor law, aggrieved employees

must exhaust their CBA's grievance and arbitration procedures

before filing a complaint in federal court ‘unless it may be said

with positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the asserted

dispute. Doubts should be resolved in favor of coverage.’”). 

As noted supra, the CBA in this case establishes a mandatory

grievance procedure that must be followed by employees asserting

a violation of the terms of the contract. Federal labor law

requires that such procedure, including arbitration, be exhausted

before an employee grievance concerning the terms of the CBA may

be heard in federal court. The amended complaint here is devoid

of any allegations concerning Plaintiff’s attempts to grieve the

breach of contract claim. Plaintiff concedes that he must

exhaust the CBA’s grievance procedure before bringing an action

for breach of the CBA. (Pl.’s Opp. Br. 3-4.) Plaintiff’s

failure to allege or otherwise demonstrate that he exhausted the

grievance procedures mandated in the CBA precludes judicial

relief for breach of the CBA. Accordingly, Count V is dismissed 5

without prejudice. 

5. While an employee may in some instances bring an action for

breach of the collective bargaining agreement by showing that the

union failed to pursue a grievance, see Angst, 969 F.2d at 1538,

Plaintiff here does not allege an attempt to invoke the grievance

procedure and thus has no excuse for failing to grieve claims

under the CBA.

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3. Plaintiff’s Claims for Fraud, Unjust Enrichment,

Breach of Fiduciary Duty, and Conversion

In the amended complaint, Plaintiff asserts claims for fraud

(Count III), unjust enrichment (Count IV), breach of fiduciary

duty (Count VI), and conversion (Count VII). These counts are

all predicated on the premise that Defendants had no right to

withhold Plaintiff’s wages. (See Am. Compl. ¶¶ 52, 54, 72, 76-

77, 84-85, 90.) Defendants contend that Plaintiff’s state-law

claims are preempted because they concern Dietz & Watson’s wage

deduction practices, which are purportedly authorized by the

provisions of the CBA. (Defs.’ Br. 12.) Plaintiff argues that

these claims are not preempted because they are based on

independent state-law rights and will not require interpretation

of the CBA. (Pl.’s Opp. Br. 12.)

a. Plaintiff’s Claim for Fraud

To establish a prima facie case for fraud under New Jersey

law, Plaintiff must be able to show: (1) that Defendants made a

material misrepresentation of a presently existing or past fact,

(2) which they knew or believed to be false, (3) upon which they

intended Plaintiff to rely, (4) and upon which Plaintiff

reasonably did rely, (5) with resulting damages. Atlantic City

Assoc. LLC v. Carter & Burgess Consultants, Inc., No. Civ. A. 05-

3227, 05-5623, 06-3735, 2007 WL 2892680, at *2 (D.N.J. Sept. 28,

2007) (citing In re Resorts Intern., Inc., 181 F.3d 505, 509 (3d

Cir. 1999)). 

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Plaintiff’s fraud claim is based on Defendants’ alleged

false representations that Plaintiff was responsible for covering

shortages and that his wages would be deducted for this purpose. 

(See, e.g., Am. Compl. ¶¶ 14, 52, 72.) The Court finds that

resolution of this claim depends upon an interpretation of the

CBA. Defendants base their right to withhold wages on Article 9

of the CBA, which provides that "[t]he employee shall be held

responsible for all collections and cash, except from accounts

where the Employer has approved credit." (Defs.’ Br., Ex. B

(CBA) Art. 9.) This provision is subject to differing

interpretations. On one hand, Article 9 may be interpreted as

simply setting forth one of a driver's duties, i.e., a driver is

responsible for collecting cash from customers. Alternatively,

this provision may be interpreted as imposing on a driver

accountability for the monies owed to Dietz & Watson, i.e., a

driver is responsible for the collections and cash obtained from

customers and must pay any shortages to Dietz & Watson. 

6

If Article 9 of the CBA is afforded the latter

interpretation, that is, that Plaintiff may be held accountable

6. As noted by Plaintiff, the CBA does not expressly state that

money will be deducted from an employee’s paychecks to pay for

shortages. (Pl.’s Opp. Br. 8 n.1.) If the CBA provides that

employees are accountable for shortages, as argued by Defendants,

but the CBA does not set forth the manner in which an employer is

to recoup such funds, an arbitrator must interpret the silence of

the contract to determine whether the contract permitted

Defendants to withhold Plaintiff’s salary as a means of holding

drivers responsible for shortages. 

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for shortages, then Plaintiff’s fraud claim would fail because

Defendants would not have made a false representation as to the

purpose of the wage deductions. In other words, if Plaintiff was

responsible for shortages under the CBA and Defendants told

Plaintiff that they were withholding wages to cover shortages,

then there was no misrepresentation concerning the wage

deductions. By contrast, if Article 9 is interpreted only to 7

provide that a driver’s duty is to collect cash but does not

impose on the driver accountability for the receivables, yet

Defendants withheld money under the purported guise that

Plaintiff was responsible for shortages, then Defendants would

have been making misrepresentations to Plaintiff about the wage

deductions. 

Therefore, the fraud claim cannot be resolved without an

interpretation of Article 9 of the CBA. Accordingly, the Court

finds that the fraud claim must be interpreted pursuant to

federal law and is thus preempted by § 301. Allis-Chalmers, 471

U.S. at 217 (“The duties imposed and rights established through

7. The Court notes Plaintiff’s argument that withholding wages

for the purpose of covering shortages is illegal under New Jersey

law, and the Court addresses this argument infra. However,

whether Defendants intentionally lied about their right to

withhold wages is different from whether Defendants believed in

good faith that they were entitled to withhold wages. If the CBA

authorized wage deductions and Defendants represented that they

withheld money pursuant to the CBA, then they would not have made

a material misrepresentation, even if the relevant provision in

the CBA is ultimately deemed to violate New Jersey law.

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the state tort . . . derive from the rights and obligations

established by the contract. . . . That being so, this tort claim

is firmly rooted in the expectations of the parties that must be

evaluated by federal contract law.”). 

As a claim under § 301, Plaintiff must have exhausted the

grievance procedure set forth in the collective-bargaining

agreement. Plaintiff’s failure to allege that he followed the

grievance procedure warrants dismissal of the fraud claim,

without prejudice.

b. Plaintiff’s Claim for Unjust Enrichment

In Count IV, Plaintiff asserts a claim for unjust

enrichment. Plaintiff avers that Defendants were unjustly

enriched by deducting money from Plaintiff’s wages and keeping

the money for their own benefit. (Am. Compl. ¶¶ 75-77.) 

“To establish unjust enrichment, a plaintiff must show both

that defendant received a benefit and that retention of that

benefit without payment would be unjust.” VRG Corp. v. GKN

Realty Corp., 135 N.J. 539, 554 (N.J. 1994) (citations omitted). 

“The unjust enrichment doctrine requires that plaintiff show that

it expected remuneration from the defendant at the time it

performed or conferred a benefit on defendant and that the

failure of remuneration enriched defendant beyond its contractual

rights.” Id. (citations omitted).

Whether Plaintiff had an expectation of full payment of

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wages in this case will require interpretation of the CBA. In

determining whether Plaintiff should have expected full payment

of wages without deductions, a trier of fact must interpret the

CBA to decide whether Article 9 provides that Plaintiff is

accountable for shortages. In this regard, if Plaintiff was

informed through the CBA that he would be held accountable for

shortages, then a trier of fact may conclude that Plaintiff

should not have expected full remuneration for the hours he

worked. Similarly, the CBA would have to be consulted to

determine whether Defendants were enriched beyond their

contractual right, for if they were permitted pursuant to the CBA

to hold Plaintiff accountable for shortages then the wages that

they withheld may not have enriched Defendants beyond their

contractual right. 

Because resolution of the unjust enrichment claim will

require the interpretation of the terms of the CBA, and there is

no indication that Plaintiff attempted to grieve this claim, the

Court finds that Plaintiff’s unjust enrichment claim is preempted

by § 301 and is subject to dismissal without prejudice.

c. Plaintiff’s Conversion Claim

Count VII of Plaintiff’s amended complaint alleges that

Defendants failed to pay money owed to Plaintiff, and instead

intentionally converted that money for their own use. 

Conversion is defined as “the wrongful exercise of dominion

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and control over property owned by another inconsistent with the

owners' rights.” Sun Coast Merch. Corp. v. Myron Corp., 393 N.J.

Super. 55, 84 (N.J. Super. Ct. App. Div. 2007), certif. denied,

194 N.J. 270 (N.J. 2008) (citation omitted). As previously

discussed, Plaintiff’s conversion claim arises from the

allegation that Defendants wrongfully withheld Plaintiff’s money

by deducting from Plaintiff’s wages to cover shortages. Whether

Defendants had a right to Plaintiff’s money turns on whether

Article 9 of the CBA is interpreted to hold Plaintiff accountable

for shortages. As such, Plaintiff’s conversion claim is

preempted under Section 301.8

 d. Plaintiff’s Breach of Fiduciary Duty Claim

Plaintiff asserts in Count VI a claim for breach of

fiduciary duty. This claim is predicated on Plaintiff’s

allegation that Defendants owed Plaintiff a fiduciary duty to

provide wages without unlawful deductions, and a fiduciary duty

to hold money in escrow without taking monies for themselves. 

(Am. Compl. ¶¶ 84, 86.) 

With respect to Plaintiff’s first theory, i.e., that

8. This claim is subject to dismissal with prejudice under Fed.

R. Civ. P. 12(b)(6) because Plaintiff cannot assert a conversion

claim based on a failure to pay contractually agreed-upon wages.

“The failure of a party to a contract to pay the full contract

price is simply a breach of the contract and thus does not

constitute a conversion of the property of the other party to the

contract.” Winslow v. Corporate Express, Inc., 364 N.J. Super.

128, 143 (N.J. Super. Ct. App. Div. 2003) (citing W. Page, et

al., Prosser & Keeton on Torts § 1 (5th ed. 1984)). 

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Defendants had a fiduciary duty to pay wages, Plaintiff cites no

authority to support this contention. The Court is aware of no

case that generally imposes on an employer a fiduciary duty to

its employees. As such, this claim is without merit and is

subject to dismissal with prejudice under Fed. R. Civ. P.

12(b)(6). 

Plaintiff’s second theory is that Defendants as escrow

agents owed Plaintiff a fiduciary duty to hold Plaintiff’s money

for Plaintiff’s benefit, and that Defendants breached such duty

by keeping the funds for their own benefit. Escrow agents have a

fiduciary responsibility to the parties to an escrow transaction. 

Matter of Hollendonner, 102 N.J. 21, 26 (N.J. 1985) (“It is well

settled that an escrow holder acts as an agent for both parties”

and escrowee owes a fiduciary duty to all parties). However, the

Court finds that resolution of Plaintiff’s breach of fiduciary

duty claim, like the conversion claim addressed supra, will

require interpretation of the CBA in determining whether

Plaintiff was responsible for paying for shortages. If Plaintiff

was accountable for shortages and the money held in escrow was

used to cover shortages, then Defendants would have had a

contractual right to the money and would not have breached a

fiduciary duty by keeping such funds. Because Plaintiff does not

assert that he attempted to grieve this claim, Count VI is

dismissed without prejudice insofar as Plaintiff alleges that

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Defendants as escrow agents breached a fiduciary duty. 

4. Plaintiff’s New Jersey Wage Payment Law Claim

In Count VIII, Plaintiff asserts a violation of the New

Jersey Wage Payment Law (“NJWPL”) on the basis that Defendants’

deduction of wages for shortages is not one of the itemized

deductions permitted under New Jersey law. (Am. Compl. ¶¶ 94-

97.) Plaintiff also avers that Defendants paid Plaintiff only

one penny for all of his accrued and sick vacation time at the

time of his termination, when he was purportedly owed

significantly more money. (Id. at ¶¶ 98-99.) 

N.J. Stat. Ann. § 34:11-4.4 provides that an employer may

not “withhold or divert any portion of an employee’s wages

unless” the employer is “required or empowered to do so by New

Jersey or United States law,” or unless the amounts withheld or

diverted are for specific, itemized reasons set forth in the

statute. Plaintiff contends that this statute creates state

rights that are independent of the CBA, and that he can establish

liability under the statute without any analysis of the terms of

the CBA. (Pl.’s Opp. Br. 9.) 

The Court finds that resolution of Plaintiff’s NJWPL claim

will not require interpretation of the CBA. In determining

whether Defendants violated the NJWPL, a trier of fact will

decide (1) whether Defendants withheld wages from Plaintiff; (2)

the purpose for withholding such wages; and (3) whether the

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purpose for withholding wages is one of the itemized reasons set

forth in the NJWPL. The CBA need not be consulted to resolve any

of these elements. 

The Court recognizes Defendants’ argument that wages were

deducted in accordance with the CBA, which if interpreted in the

manner pressed by Defendants would have authorized Defendants to

hold Plaintiff accountable for shortages. Defendants, however,

cite no authority to support the argument that a provision in the

CBA allowing certain conduct excuses an employer’s failure to

comply with the NJWPL. 

9

The Seventh Circuit Court of Appeals’ decision in Spoerle v.

Kraft Foods Global, Inc., 614 F.3d 427 (7th Cir. 2010), provides

9. Moreover, Plaintiff’s state-law claim cannot be preempted

simply because Defendants rely on the CBA as a defense to such

claim. “It is true that when a defense to a state claim is based

on the terms of a collective-bargaining agreement, the state

court will have to interpret that agreement to decide whether the

state claim survives. But the presence of a federal question,

even a § 301 question, in a defensive argument does not overcome

the paramount policies embodied in the well-pleaded complaint

rule - that the plaintiff is the master of the complaint, that a

federal question must appear on the face of the complaint, and

that the plaintiff may, by eschewing claims based on federal law,

choose to have the cause heard in state court. When a plaintiff

invokes a right created by a collective-bargaining agreement, the

plaintiff has chosen to plead what we have held must be regarded

as a federal claim, and removal is at the defendant's option. 

But a defendant cannot, merely by injecting a federal question

into an action that asserts what is plainly a state-law claim,

transform the action into one arising under federal law, thereby

selecting the forum in which the claim shall be litigated. If a

defendant could do so, the plaintiff would be master of nothing. 

Congress has long since decided that federal defenses do not

provide a basis for removal.” Caterpillar, 482 U.S. at 398-99.

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guidance on the extent to which labor and management can agree

through the collective bargaining process to waive individual

rights provided in state law. In Spoerle, the defendant required

its employees to wear certain protective gear, and the union

representing the employees agreed that the time employees spent

putting on such gear is not compensable. Id. at 428. In

exchange, union workers were paid a higher wage rate than the

minimum wage law required. Id. The employees wanted to be

compensated for the extra minutes spent each day putting on and

taking off protective gear. Id. The FLSA generally requires

workers to be paid for time spent putting on and taking off

certain gear, but allows labor and management to vary this rule

through collective bargaining. Id. Wisconsin law, however,

requires payment for such time spent by employees, and does not

allow parties to contract away this right through the collective

bargaining process. Id.

The Seventh Circuit considered whether the FLSA preempts the

state statute, and concluded that state law was not preempted. 

Although this issue is not particularly relevant to the present

case, the rationale employed by the Court is instructive. The

Seventh Circuit specifically noted that “[n]othing that labor and

management put in a collective bargaining agreement exempts them

from state laws of general application.” Id. at 430. 

“Management and labor acting jointly (through a CBA) have no more

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power to override state substantive law than they have when

acting individually.” Id. The Seventh Circuit then utilized the

following example to demonstrate that parties through a CBA

cannot agree to override state law: 

Imagine a CBA saying: “Our drivers can travel

at 85 mph, without regard to posted speed

limits, so that they can deliver our goods in

fewer compensable hours of work time.” That

clause would be ineffectual. And a CBA

reading instead that “our drivers can travel

at a reasonable rate of speed, no matter what

state law provides” would be equally

pointless. Making a given CBA hard to

interpret and apply (as the word “reasonable”

would be) would not preempt state law on the

theory that states must leave the

interpretation of CBAs to the National Labor

Relations Board and the federal judiciary;

states would remain free to enforce laws that

disregarded CBAs altogether. 

Id.10

The Wisconsin law at issue in Spoerle enumerates certain

types of activities for which employees must be paid. The

employer attempted to withhold wages for one of the activities

for which it was required to pay its employees, justifying its

conduct by a provision in the collective bargaining agreement

which permitted non-payment for such activity. These facts are

somewhat analogous to the present case, where the NJWPL sets

forth certain categories for which wages may be deducted, and

10. The rationale of Spoerle was followed by the District of New

Jersey in O’Keefe v. Hess Corp., No. Civ. A. 10-2598, 2010 WL

3522088, at *6-7 (D.N.J. Sept. 1, 2010). 

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thereby prohibits wage deductions for categories not otherwise

enumerated. Defendants have withheld wages for a purpose not

authorized by the statute, justifying their conduct by a

provision in the collective bargaining agreement. Just as the

defendant in Spoerle could not rely on a CBA provision to

withhold money from its employees in contravention of state law,

here too Defendants cannot rely on a provision in the CBA

allowing wage deductions for purposes not authorized by New

Jersey state law.11

The Court notes that arguably Plaintiff’s claim could be

construed as a challenge to the legality of a term of the CBA. 

If the CBA is interpreted to have authorized wage deductions to

cover an employee’s shortages, then it permitted withholding of

wages for a purpose other than the those set forth in New Jersey

law. See Male v. Acme Markets, Inc., 110 N.J. Super. 9, 12 (N.J.

Super. Ct. App. Div. 1970) (noting in dicta that “if the union

11. Defendants would presumably argue that because the CBA is

unclear, the NJWPL claim cannot be decided without interpretation

of the CBA. If the CBA clearly and explicitly stated that wages

may be deducted to cover shortages, the claim could be resolved

by the Court because resolution thereof would require reference

to, but not interpretation of, the CBA. Although the language in

the CBA here is more ambiguous, this factor does not alter the

preemption analysis given that the right arises independently of

the CBA. See Spoerle, 614 F.3d at 430 (“Making a given CBA hard

to interpret and apply (as the word ‘reasonable’ would be) would

not preempt state law on the theory that states must leave the

interpretation of CBAs to the National Labor Relations Board and

the federal judiciary; states would remain free to enforce laws

that disregarded CBAs altogether.”). 

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agreement authorized a deduction of shortages from wages, such a

provision would contravene the law, would violate public policy

and be invalid.”). 

Some courts have found that challenges to the legality of a

provision in a CBA are preempted under the LMRA, where resolution

of the claims required interpretation of the provision of the CBA

at issue. See, e.g., Vera v. Saks & Co., 335 F.3d 109, 116 (2d

Cir. 2003) (Second Circuit concluded that plaintiff’s challenge

to lawfulness of term of CBA required interpretation of CBA and

was thus preempted under Section 301); Medrano v. Excel Corp.,

985 F.2d 230, 234 (5th Cir. 1993) (plaintiff’s claim was

preempted by Section 301 where he challenged legality of

provision of CBA and his claim was deemed “substantially

dependent upon the meaning of a term of the CBA and its

applicability in this case.”), cert. denied, 510 U.S. 822 (1993);

Dunlap v. Fred Meyer Stores, Inc., Civ. A. No. 04-950, 2006 WL

2901841, at *7 (D. Or. Oct. 5, 2006) (where plaintiff contended

that provision of CBA violated state law, court found that claim

was preempted by Section 301 because “the Court cannot resolve

Plaintiff’s claim without construing the CBA.”). These cases,

however, do not stand for the broad proposition that every claim

challenging the legality of a provision in a CBA must be

preempted under the LMRA. Rather, these cases “stand simply for

the unremarkable proposition that ‘an application of state law is

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pre-empted by § 301 of the [LMRA] only if such application

requires the interpretation of a collective-bargaining

agreement.’” Glatts v. Crozer-Keystone Health System, 645 F.

Supp. 2d 446, 451 (E.D. Pa. 2009) (citing Lingle, 486 U.S. at

413).12

In this case, although Plaintiff could have alleged that a

provision in the CBA allowing wage deductions for shortages

violated New Jersey law, he did not do so. As the master of the 13

complaint, Plaintiff may bring a state law claim even though he

could have brought a similar suit under the CBA. See Livadas v.

Bradshaw, 512 U.S. 107, 123 (1994) (“. . . § 301 cannot be read

broadly to pre-empt nonnegotiable rights conferred on individual

employees as a matter of state law, and we stressed that it is

the legal character of a claim, as ‘independent’ of rights under

the collective-bargaining agreement . . . (and not whether a

grievance arising from ‘precisely the same set of facts’ could be

pursued . . .) that decides whether a state cause of action may

go forward.”); Caterpillar, 482 U.S. at 394-95 (“It is true that

12. The broad proposition that every claim challenging the

legality of a CBA provision is preempted by § 301 is inconsistent

with the Supreme Court’s statement in Allis-Chalmers that the

“‘full scope of the pre-emptive effect of federal labor-contract

law’ must be ‘fleshed out on a case-by-case basis.’” Id.

(quoting Allis Chalmers, 471 U.S. at 220).

13. The Court makes no finding as to whether Article 9 of the

CBA should be interpreted to hold Plaintiff accountable for

shortages and notes only that this is one possible interpretation

of the contract.

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respondents . . . possessed substantial rights under the

collective agreement, and could have brought suit under § 301. 

As masters of the complaint, however, they chose not to do so.”);

Voilas, 170 F.3d at 373-74 (“Thus, under Caterpillar, employees

have the option of vindicating their interests by means of either

a section 301 action or an action brought under state law, as

long as the state-law action as pleaded does not require

interpretation of the collective bargaining contract.”); Trans

Penn Wax Corp. v. McCandless, 50 F.3d 217, 229 (3d Cir. 1995)

(“[A] plaintiff may bring a state law tort action against an

employer, even where he could have brought a similar claim based

on a provision in his collective bargaining agreement, so long as

the state claim does not require interpretation of the collective

bargaining agreement. The tort claim falls under state law even

though the claim based on the bargaining agreement provision must

apply federal law pursuant to section 301.”). 

Plaintiff chose not to frame his complaint in terms of an

illegal CBA provision, but instead challenges the actions of his

employer. The right to be paid the wages earned, without

deductions for unauthorized purposes, exists independently of the

CBA and cannot be eviscerated by a collective bargaining

agreement. See Allis-Chalmers, 471 U.S. at 212 (“Clearly, § 301

does not grant the parties to a collective-bargaining agreement

the ability to contract for what is illegal under state law. In

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extending the pre-emptive effect of § 301 beyond suits for breach

of contract, it would be inconsistent with congressional intent

under that section to preempt state rules that proscribe conduct,

or establish rights and obligations, independent of a labor

contract.”). Therefore, resolution of the NJWPL claim, as set

forth in the amended complaint, does not require application or

interpretation of the CBA, and accordingly Plaintiff’s NJWPL

claim is not preempted under Section 301.

 In so finding, the Court notes Defendants’ reference to

Antol v. Esposto, 100 F.3d 1111, 1121 (3d Cir. 1996), in which

the Third Circuit held that the Pennsylvania Wage Law was

completely preempted by the LMRA. In Antol, the plaintiffs sued

individual officers and stockholders of the defendant

corporation. Antol, 100 F.3d at 1119. Under the Pennsylvania

Wage Law, officers are the “employer” and are personally liable

for obligations of the corporate employer. Id. Such definition

is different from the definition of an “employer” under the LMRA

and, if applied to the LMRA, would “substantially alter the scope

and enforcement of the typical collective bargaining agreement.” 

Id. at 1120. The Third Circuit found that if the Pennsylvania

Wage Law was construed to expand the definition of an employer in

collective bargaining agreements so as to include corporate

officers, there would be several adverse effects on federal labor

law, including allowing employees to bypass the grievance

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procedures of the collective bargaining agreement by suing

corporate officers in state court. Id. In the interest of

having a uniform labor policy, the Court found the Pennsylvania

Wage Law preempted. Id. at 1121.

The Third Circuit has not yet addressed New Jersey’s Wage

Payment Law in the context of Section 301 preemption, and

Defendants do not argue that application of the NJWPL would be

preempted for the same reasons set forth in Antol. Unlike 14

Antol, this case does not present an issue of whether definitions

within the NJWPL are inconsistent with the LMRA, thereby

warranting preemption. Because the Court finds, as set forth

above, that resolution of Plaintiff’s NJWPL claim in this case

will not require application or interpretation of the CBA, the

Court does not at this time find the claim preempted solely on

the basis that it asserts a violation of the New Jersey Wage

Payment Law. 

5. Plaintiff’s RICO Claims

Defendants contend that Plaintiff’s allegations of RICO

violations are, in essence, allegations that Defendant Dietz &

Watson failed to pay to Plaintiff the wages contractually agreed

14. This issue appears to be one of first impression in this

district, and the Court declines to find complete preemption of a

state law without the benefit of the parties’ arguments on this

issue. If Defendants intend to argue that the NJWPL is preempted

under the LMRA, Defendants will have to address this issue by

more than mere reference to the fact that the Third Circuit has

found preemption of a Pennsylvania law. 

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upon in the CBA. (Defs.’ Br. 8-9.) Defendants argue that the

RICO claims are therefore preempted by federal law. (Id.) 

Plaintiff responds that the factual predicate underlying his RICO

claim is Defendants’ alleged fraudulent deductions from

Plaintiff’s paycheck and Defendants’ misrepresentation that such

deductions were mandatory and permissible under state law. 

(Pl.’s Opp. Br. 7.) Plaintiff asserts that the Court need not

consult the CBA to resolve this claim. (Id.)

Under 18 U.S.C. § 1962(c), “[i]t shall be unlawful for any

person employed by or associated with any enterprise engaged in,

or the activities of which affect, interstate or foreign

commerce, to conduct or participate, directly or indirectly, in

the conduct of such enterprise's affairs through a pattern of

racketeering activity or collection of unlawful debt.” To 15

assert a RICO claim under § 1962(c), a plaintiff must allege “(1)

conduct (2) of an enterprise (3) through a pattern (4) of

racketeering activity.” Lum v. Bank of America, 361 F.3d 217,

223 (3d. Cir. 2004), cert. denied, 543 U.S. 918 (2004). 

In Franks v. O’Connor Corp., No. Civ. A. 92-0947, 1992 WL

301266, at *1 (E.D. Pa. Oct. 16, 1992), the court considered

15. Plaintiff does not specify which section of RICO was

allegedly violated, but it appears from the allegations in the

amended complaint that he asserts a violation of subsection (c)

of the statute. The Court also notes Plaintiff’s reference to

subsection (c) in his brief in opposition to the pending motion

to dismiss. (See Pl.’s Opp. Br. 12.) 

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whether the plaintiffs’ RICO claims, which stemmed from alleged

wage-skimming by the defendants, were preempted under Section 301

of the LMRA. The court first adopted the following test for

preemption or RICO claims: “[I]n order for § 301 to preempt a

claim under RICO, . . . the underlying conduct which forms the

predicate acts [must] be unlawful only by virtue of federal labor

law.” Id. at *3. The court noted that the plaintiffs’

allegations that the defendants committed mail and wire fraud

were based on purported wage-skimming activities. Id. at *4. 

The court found such claims preempted because “[t]he only reason

defendants’ conduct can be alleged to be unlawful is that the

defendant did not pay wages it had agreed to pay under the

Collective Bargaining Agreement.” Id. The court explained that

without the agreement, the employer could not be held liable for

failure to pay the employees’ wages, and therefore the conduct

was unlawful only by virtue of federal labor law. Id. 

In this case, Plaintiff’s claims are likewise predicated on

an alleged wage-skimming scheme. However, here there are

allegations that the wage-skimming scheme was unlawful not only

because Defendants purportedly failed to pay wages under the CBA,

but also because wages were skimmed in violation of the NJWPL, as

well as the FLSA and the New Jersey Minimum Wage Act as discussed

below. Therefore, the alleged underlying conduct which forms the

predicate acts is not unlawful only by virtue of federal labor

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law and, accordingly, the RICO claims are not preempted by

Section 301.

That said, the Court finds that the RICO claims are subject

to dismissal without prejudice under Rule 12(b)(6) for failure to

state a claim. As noted above, to state a RICO claim, a

plaintiff must allege a pattern of racketeering activity, which

“requires at least two predicate acts of racketeering.” Lum, 361

F.3d at 223 (citing 18 U.S.C. § 1961(5)). These predicate acts

may include federal mail fraud, 18 U.S.C. § 1341, or federal wire

fraud, 18 U.S.C. § 1343. Id. Where a plaintiff relies on mail

and wire fraud as a basis for a RICO violation, he must plead the

allegations of fraud with specificity in accordance with Fed. R.

Civ. P. 9(b). Id. “Plaintiffs may satisfy this requirement by

pleading the ‘date, place or time’ of the fraud, or through

‘alternative means of injecting precision and some measure of

substantiation into their allegations of fraud.’” Id. at 224

(internal quotation omitted). Additionally, plaintiffs must

allege “who made a misrepresentation to whom and the general

content of the misrepresentation.” Id. (citations omitted). 

In this case, Plaintiff concedes that he fails to identify

the date, time, or place of any misrepresentations by Defendants

or which of the three defendants made misrepresentations to

Plaintiff, but he argues that the allegations in the amended

complaint provide an alternative means of injecting precision and

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some measure of substantiation into the fraud allegations. 

(Pl.’s Opp. Br. 13.) The Court disagrees and finds that the

amended complaint lacks sufficient detail to support Plaintiff’s

allegations of mail and wire fraud. 

The amended complaint contains only a few paragraphs that

attempt to set forth with specificity the allegations of fraud. 

These paragraphs state that in the spring of 2000 and in early

2007, Louisa Bergey told Plaintiff that his wages would be

deducted to cover shortages. (Am. Compl. ¶¶ 16-18.) Plaintiff

purportedly informed Ms. Bergey that he did not want these

deductions, but she responded that the deductions were mandatory. 

(Id. at ¶¶ 19-20.) These paragraphs, however, do not state that

Ms. Bergey acted at the direction of the defendants and do not

allege any knowledge or wrongdoing by the defendants themselves. 

Even assuming that the defendants engaged in wrongdoing,

Plaintiff lumps all three defendants together as having engaged

in wrongful conduct without specifying which defendant was

responsible for which actions. Such allegations are insufficient

to place Defendants on notice of the fraudulent conduct with

which they are charged. Accordingly, the RICO claims fail to

state a claim and shall be dismissed without prejudice.

6. Plaintiff’s Minimum Wage Claims

Plaintiff asserts in Count IX violations of the FLSA and the

New Jersey Wage and Hour Law based upon the factual allegation

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that he was paid only one penny for his final two pay weeks when

he worked at least 65 hours per week. (Am. Compl. ¶¶ 103-04.) 

Defendants argue that the FLSA claim is preempted by federal

labor law because such claim is based on the deduction of money

from Plaintiff’s wages, which is purportedly permitted by the

CBA. (Defs.’ Br. 9.) They further argue that the claim based

upon New Jersey’s minimum wage law is preempted because the wages

owed Plaintiff are governed by the CBA. (Id. at 9-10.) 

Defendants cite Antol, supra, in support of their argument that

the state law claim is preempted. (Id. at 10.)16

The FLSA confers upon Plaintiff statutory rights that are

independent of the CBA. Specifically, the FLSA requires that

employees be paid a minimum wage and time and half for all hours

worked in excess of forty hours a week. 29 U.S.C. §§ 206, 207. 

“Employees' rights to minimum wage and overtime pay under the

FLSA are separate and distinct from employees' contractual rights

arising out of an applicable collective bargaining agreement.” 

Gordon v. Kaleida Health, No. civ. A. 08-378, 2008 WL 5114217, at

*7 (W.D.N.Y. Nov. 25, 2008) (citations omitted); see also O’Keefe

v. Hess Corp., No. Civ. A. 10-2598, 2010 WL 3522088, at *5

(D.N.J. Sept. 1, 2010)(in deciding claim under NJWHL, court noted

16. For the reasons stated previously, the Court at this time

does not find that the Third Circuit’s holding in Antol with

respect to the Pennsylvania Wage Payment Law requires preemption

of New Jersey’s wage statutes. 

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that the “only determination that must be made is whether the

NJWHL, regardless of any language in the CBA, entitles Plaintiff

to recover wages and overtime for his work activities. . . . If

so, then Plaintiff would have a nonnegotiable right to

compensation that would trump any contrary language in the

CBA.”). 

Plaintiff alleges in the amended complaint that he was not

paid minimum wage in accordance with the FLSA because he was paid

one penny for at least 130 hours of work in 2009. This claim

requires no interpretation of the CBA. The right alleged to have

been violated has an independent statutory basis in Section 206

of the FLSA. In resolving the claim, a trier of fact must only

consider the number of hours Plaintiff worked, the statutory

minimum hourly rate that Plaintiff was entitled to be paid, and

the amount that Plaintiff was actually paid. Plaintiff’s claim,

therefore, is not preempted by § 301 and the simple fact that a

CBA exists does not void Plaintiff’s rights under the FLSA.

In so finding, the Court again notes Defendants’ position

that wages were withheld pursuant to the provision in the CBA

allowing for deductions to cover shortages. For the same reasons

the Court concluded that Plaintiff’s claims under the NJWPL in

this case are not preempted by the LMRA, the Court similarly

concludes that the right to be paid a minimum wage is an

independent right created by federal and state law, and the

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parties to a CBA cannot contract away such right by allowing wage

deductions that would deprive an employee of wages that are less

than the minimum wages set by statute.

Moreover, the Court notes Defendants’ argument that

Plaintiff was exempt from the minimum wage requirements of the

FLSA because he was a driver who regularly sold and delivered

Defendants’ products. (Def.’s Br. 17.) Defendants rely on 29

CFR § 541.504(a) in support of their argument, noting that

Plaintiff’s primary duty was making sales because Plaintiff

received sales commissions and purportedly “bore the burden of

collections and risks of shortages and product returns.” (Id.) 

Plaintiff argues that the affirmative defense raised by

Defendants is not ripe for adjudication at the pleading stage

because the Court must consider factual issues not yet developed

in the record. (Pl.’s Opp. Br. 18-19.)

29 CFR § 541.504(a) provides that “[d]rivers who deliver

products and also sell such products may qualify as exempt

outside sales employees only if the employee has a primary duty

of making sales.” The regulation sets forth a number of factors

that may be considered in determining whether a driver has a

“primary duty of making sales,” which include: “comparison of the

driver's duties with those of other employees engaged as truck

drivers and as salespersons; possession of a selling or

solicitor's license when such license is required by law or

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ordinances; presence or absence of customary or contractual

arrangements concerning amounts of products to be delivered;

description of the employee's occupation in collective bargaining

agreements; the employer's specifications as to qualifications

for hiring; sales training; attendance at sales conferences;

method of payment; and proportion of earnings directly

attributable to sales.” 29 CFR § 541.504(b). 

The Court finds that resolution of the affirmative defense

raised by Defendants is not appropriate on a motion to dismiss

under Rule 12(b)(6). The amended complaint states only that

Plaintiff is a “driver” for Defendant Dietz & Watson and does not

further articulate the scope of Plaintiff’s duties. The CBA

defines Plaintiff as a “driver-salesman,” and Plaintiff concedes

that a “significant portion” of Plaintiff’s wages were earned by

commission. (Pl.’s Opp. Br. 19.) However, these are only two

factors that may be considered in deciding whether Plaintiff’s

primary duty was to make sales. The Court has no information

concerning, for example, the duties of other employees engaged in

either deliveries and/or sales, sales training provided to

Plaintiff, Plaintiff’s attendance at sales conferences, and

arrangements concerning the amount of products to be delivered. 

Additionally, it is not apparent from the face of the CBA whether

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Plaintiff’s primary duty was as a salesman. Therefore, a 17

determination as to whether Plaintiff was primarily a salesperson

subject to an exemption under the FLSA cannot be determined at

this time. 

The Court’s analysis with respect to Plaintiff’s claim under

New Jersey’s Minimum Wage Act, is identical to Plaintiff’s claim

under the FLSA. Resolution of this claim will involve

consideration of the number of hours Plaintiff worked, the

statutory minimum hourly rate that Plaintiff was entitled to be

paid, and the amount that Plaintiff was actually paid, and will

not require a factfinder to consult or interpret the CBA to

determine if the amounts due were paid. Consequently, the Court

finds that the claim under the New Jersey Minimum Wage Act is not

preempted under Section 301. 

17. For instance, the CBA sets forth a schedule for commissions

based on the type of product delivered by a driver salesman,

which supports the argument that driver salesmen’s primary duty

is sales. The CBA also contains references, however, to a driver

salesman’s route. A driver is not exempt from the minimum wage

requirements if he “often calls on established customers day

after day or week after week, delivering a quantity of the

employer's products at each call when the sale was not

significantly affected by solicitations of the customer by the

delivering driver or the amount of the sale is determined by the

volume of the customer's sales since the previous delivery.” 29

CFR § 541.504(d)(2). Moreover, the CBA refers to “Junior

Salesmen” as a separate category of employees from “Driver

Salesmen,” which arguably support a finding that a driver

salesman’s primary duty is not sales. A factual record must be

developed to determine Plaintiff’s primary duties. 

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C. Preemption under the NLRA

In Count X, Plaintiff alleges that he “complained to

Defendant Dietz & Watson through its agents stating that he

believed Defendants’ conduct in withholding substantial wages

from him and other drivers each pay period was illegal.” (Am.

Compl. ¶ 108)(emphasis supplied.) Plaintiff contends that

Defendants terminated his employment in retaliation for

Plaintiff’s complaints. (Id. at ¶ 113.) Defendants assert that

the retaliatory discharge claim is preempted by Sections 7 and 8

of the NLRA because the allegation concerns a purported concerted

activity and thus must be decided by the National Labor Relations

Board. (Defs.’ Br. 11.) Plaintiff responds that his claim is 18

not based on whether he was retaliated against for engaging in

concerted activity, but whether he was retaliated against for

complaining about wage deductions. (Pl.’s Opp. Br. 11.) 

 Section 7 of the NLRA gives employees the right to engage

in concerted activities for the purposes of mutual aid and

protection, 29 U.S.C. § 157, and Section 8 provides employees the

right to be free from unfair labor practices, 29 U.S.C. § 158. 

When a plaintiff asserts a cause of action that implicates

protected activity under Section 7 of the NLRA, or prohibited

18. Defendants also argue that other claims are preempted under

the NLRA without analysis as to why the conduct at issue concerns

unfair labor practices. As such, other than the retaliatory

discharge claim, the Court does not address preemption of any

other claims under the NLRA.

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conduct under Section 8 of the NLRA, the cause of action is

preempted under the principles of “Garmon preemption.” San Diego

Building Trades Council v. Garmon, 359 U.S. 236, 244 (1959). The

National Labor Relations Board has exclusive jurisdiction over

such proceedings. Garmon, 359 U.S. at 245.

The issue presented in connection with Plaintiff’s wrongful

discharge claim is whether Plaintiff’s alleged complaints to his

employers concerning the purported wage deductions, which

allegedly resulted in retaliation by termination of Plaintiff’s

employment, constituted “concerted activity” within the meaning

of the NLRA. In the amended complaint, Plaintiff avers that he

complained to his employer on behalf of himself and other

drivers. (Am. Compl. ¶ 108.) Defendants contend that Plaintiff

is alleging concerted activity on behalf of other drivers and, as

such, the claim must be determined by the administrative

procedures set forth in the NLRA. (Defs.’ Br. 11-12.) Plaintiff

argues that he does not allege concerted activity and

consequently his claim requires only application of common and

statutory law. (Pl.’s Opp. Br. 10-11.) 

The NLRA is silent as to what conduct constitutes “concerted

activity,” but “it clearly enough embraces the activities of

employees who have joined together in order to achieve common

goals.” NLRB v. City Disposal Systems, Inc., 465 U.S. 822, 830

(1984). “What is not self-evident from the language of the Act,

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however . . . is the precise manner in which particular actions

of an individual employee must be linked to the actions of fellow

employees in order to permit it to be said that the individual is

engaged in concerted activity.” Id. at 830-31. 

The Supreme Court addressed this issue in City Disposal

Systems, where an employee truck driver was terminated from his

employment because he refused to drive a truck he believed was

unsafe due to faulty brakes. 465 U.S. at 827. The Supreme

Court, in reviewing the decision of the NLRB, concluded that the

NLRA protects individual employees who invoke rights contained in

a CBA because their activity is a direct extension of the

collective bargaining process. Id. at 832. The Supreme Court

noted that “an employee could not invoke a right grounded in a

collective-bargaining agreement were it not for the prior

negotiating activities of his fellow employees” and that when an

employee “invokes a right grounded in the collective-bargaining

agreement, he does not stand alone.” Id. The Supreme Court

concluded that an individual employee who reasonably and honestly

invokes a right provided for in his collective bargaining

agreement has undertaken concerted activity for mutual aid or

protection. Id. at 832, 841. 

Here, if the CBA is interpreted to provide authority for the

deduction of wages to cover shortages, then this case presents

the converse of the situation in City Disposal Systems:

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Plaintiff’s claim for wrongful discharge would be based on a

challenge to a provision in the CBA rather than an attempt to

vindicate the rights guaranteed by the CBA. In challenging a

term of the CBA, Plaintiff would be undermining the very purpose

of the NLRA. See City Disposal Systems, 465 U.S. at 833-34

(purpose of NLRA is to encourage collective bargaining). Indeed,

“protecting employees whose demands are different than what their

union negotiators agreed to, is not a natural extension of

concerted action; it is a repudiation of the union’s right to be

the exclusive negotiator with the employer and wholly undermines

the collective bargaining process.” Bd. of Educ. of Schaumburg

Comm. Consol. Sch. Dist. 54 v. Illinois Educ. Labor Relations

Bd., 247 Ill. App. 3d 439, 458 (Ill. App. Ct. 1993), appeal

denied by 152 Ill. 2d 554 (Ill. 1993). It follows that

Plaintiff’s complaint about the wage deductions, if his union

representative had agreed to such term in the CBA, would not be

an extension of the collective bargaining process and thus would

not be considered concerted action undertaken for mutual aid or

protection.

Moreover, if the CBA is not interpreted to provide authority

for the wage deductions, then Plaintiff’s complaints cannot be

construed as a challenge to the terms of a CBA. Rather,

Plaintiff’s conduct would appear to be based on a “purely

personal” gripe, which would not be protected under Sections 7 or

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8 of the NLRA. See City Disposal Systems, 465 U.S. at 833 n.10. 

Although the complaint alleges that Plaintiff told Defendants he

believed the withholding of his wages and the wages of other

drivers was illegal, Plaintiff does not allege that he actually

complained on behalf of anyone other than himself. Nor is there

any assertion that other employees authorized Plaintiff to

complain on their behalf, or were aware of and supported

Plaintiff’s complaint. An individual’s action, even if

presumably of interest to other employees, is not in itself

“concerted activity” under the NLRB. Williams v. Watkins Motor

Lones, Inc., 310 F.3d 1070, 1072 (8th Cir. 2002). Because the

Court finds that under either interpretation of the CBA,19

Plaintiff’s amended complaint does not assert “concerted

activity,” and the wrongful discharge claim is therefore not

preempted under Garmon. 

Finally, to the extent Defendants contend that the wrongful

termination claim is preempted under Section 301 of the LMRA, the

Court finds that the claim is not preempted. In Lingle, the

Supreme Court held that a state tort action arising out of the

retaliatory discharge of an employee covered by a collective

bargaining agreement is not preempted by Section 301 if the

application of state law does not require an interpretation of

19. In deciding whether Garmon preempts the wrongful termination

claim, the Court need not interpret the CBA because the same

result is reached regardless of the interpretation of the CBA. 

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the CBA. See Lingle, 486 U.S. at 407. In this case, under New

Jersey common law, an employee has a claim for wrongful discharge

if his employment is terminated in violation of a “‘clear mandate

of public policy.’” Ballinger v. Delaware River Port Auth., 172

N.J. 586, 604 (N.J. 2002)(citing Pierce v. Ortho Pharma. Corp.,

84 N.J. 58 (N.J. 1980)). Resolution of this claim will involve

the conduct of the Plaintiff and the conduct and motivation of

Defendants. These elements do not require a court to interpret

any term of the CBA. Nor is there a termination/discharge

provision in the CBA that must be considered in deciding the

claim. Thus, the state-law remedy in this case in independent of

the CBA for Section 301 preemption purposes. See Lingle, 486

U.S. at 407. 

D. Leave to Amend

Federal Rule of Civil Procedure 15(a) directs the Court to

“freely give leave when justice so requires.” Under this

standard, courts will grant a party leave to amend unless the

opposing party can establish prejudice, undue delay, bad faith on

the part of the movant or futility of amendment. There has been

no such showing here, except for Plaintiff’s claims for

conversion (Count VII) and breach of fiduciary duty based on

Defendants’ failure to pay wages (Count VI). Plaintiff will be

granted leave to amend his complaint with respect to Counts I,

II, III, IV, V, and VI insofar as Plaintiff alleges that

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Defendants as escrow agents breached a fiduciary duty. 

IV. CONCLUSION

For the reasons expressed above, Defendants’ motion to

dismiss will be granted in part and denied in part. Plaintiff’s

claims set forth in Counts I, II, III, IV, and V of the amended

complaint will be dismissed without prejudice, as will

Plaintiff’s claim in Count VI that Defendants as escrow agents

breached a fiduciary duty. Plaintiff’s claims for conversion as

set forth in Count VII and breach of fiduciary duty based on

Defendants’ failure to pay wages as set forth in Count VI will be

dismissed with prejudice. Plaintiff’s claims in Count VIII, IX

and X shall proceed. An Order consistent with this Opinion will

be entered. Plaintiff shall be granted leave to file a second

amended complaint within twenty days of entry of the Order

accompanying this Opinion.

Dated: December 22, 2011 s/ Noel L. Hillman 

At Camden, New Jersey NOEL L. HILLMAN, U.S.D.J.

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