Opinion ID: 3011011
Heading Depth: 3
Heading Rank: 2

Heading: Analogous Federal Statutes

Text: The federal wage and overtime statutes also include a good-faith defense, and we believe that our precedents interpreting the federal good-faith law are helpful in our task of interpreting the state provision. The federal law includes two good-faith provisions.10 One of these is _________________________________________________________________ 9. The District Court inadvertently cited Frech as a New Jersey Supreme Court case. See Keeley, 42 F. Supp. 2d at 452. Were Frech actually a state supreme court case, we would obviously adhere to its interpretation of the state good-faith defense, even though the court appeared to ignore a requirement of that defense. However, as Frech is actually a trial court decision, it is at most persuasive but nonbinding authority and we look to the plain language of the statute and our own interpretation of the good-faith defense in predicting how the state supreme court would apply the defense to the facts of this case. 10. The two good-faith defenses offer different protections. The first, 29 U.S.C. S 259, provides a complete defense to an action for unpaid wages, while the second, id. S 260, gives a court discretion to award less than the statutory amount of liquidated damages, but still requires the defendant to pay compensatory damages for unpaid wages. 21 identical in all material respects to the New Jersey goodfaith statute. See 29 U.S.C. S 259(a) (1994); cf. Dole v. Odd Fellows Home Endowment Bd., 912 F.2d 689, 696 (4th Cir. 1990) (noting that the good-faith defense in S 259 requires a written regulation, order, ruling, approval, or interpretation that could have been relied on). The second federal provision is less strict,11 requiring only that the employer [show] to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act. 29 U.S.C. S 260 (1994). While S 260 requires simply good faith andreasonable grounds, as opposed to the New Jersey law's requirement of reliance on an administrative regulation, order, practice, or policy, cases involving S 260 are still informative for their interpretation of the good faith requirement. For example, in Williams v. Tri-County Growers, Inc., this court held: The fact that an employer has broken the law for a long time without complaints from employees does not demonstrate the requisite good faith required by the statute. . . . [T]he employer must affirmatively establish that he acted in good faith by attempting to ascertain the Act's requirements. 747 F.2d 121, 129 (3d Cir. 1984). Under Williams, Loomis Fargo's longstanding practice of not paying overtime and its union's apparent acquiescence in this practice are insufficient to establish good faith--even leaving aside the existence (or lack thereof) of a regulation, order, practice, or policy on which defendant relied. More recently, we discussed the good-faith defense in S 260 in Martin v. Cooper Electric Supply Co., 940 F.2d 896 (3d Cir. 1991). In Martin, we held that the district court erred in finding that the employer had proved the goodfaith defense, citing three factors in particular. First, _________________________________________________________________ 11. Cf. 29 C.F.R. S 790.17(i) n.110 (1998) (noting that the fact that an employer has no defense under S 259 would not preclude a court from finding that the employer had met the requirements for the defense in S 260). 22 reiterating the holding in Williams, we held that the employer's failure to inquire into the Act's overtime pay requirements before [the agency's investigation] precludes a determination that the company's subjective good faith was reasonable. Id. at 909. Second, we held that the employer's adherence to customary and widespread industry practices that violate the Act's overtime pay provisions is not evidence of an objectively reasonable good faith violation. Id. at 910. Finally, we rejected the district court's contention that an employer could violate overtime requirements as a  `reasonable and necessary' competitive response[ ] to the `market for qualified employees.'  Id. (quoting district court). We noted that [t]his reasoning tends improperly to favor companies in industries where economic conditions make violations of the Act most attractive or pervasive. Id. Williams and Martin, therefore, provide that reasonable good faith is not shown when an employer does not inquire about the law's requirements, simply follows an industry trend of not complying with the law, or violates the law in order to remain competitive. Although we will not assume that New Jersey's courts would adopt this federal jurisprudence unaltered, we note again that these cases involved the federal good-faith defense with the lower standard, while the language of the New Jersey statute is virtually identical to that of the stricter of the two federal good-faith provisions. The federal jurisprudence also seems eminently sensible. Therefore, these cases likely present the minimum standard that a New Jersey employer must meet in order to enjoy the protections of that state's good-faith defense to a failure to pay overtime.