Fuel Smarts

Federal Ruling Could Mean Overtime Pay For Drivers

July 29, 1999

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A federal court decision spells big trouble for some New Jersey-based truckers. A 3rd Circuit Court of Appeals ruling requires all New Jersey carriers to pay drivers time-and-a-half for each hour over 40 worked in any one week.

Exactly how the opinion will affect mileage or trip pay is unknown. But Sam Cunninghame, Executive Director of the New Jersey Motor Truck Assn., said the result of the ruling could be catastrophic for some New Jersey carriers. Cunninghame said neither he nor his members were aware of the court case until the decision was issued on July 26.
The case involved Loomis, Fargo & Co., an armored car carrier headquartered in Houston, TX, and an independent union representing employees at its Lyndhurst, NJ, branch. According to the plaintiff's lawyer, Paul Schachter of Reinhardt & Schachter, P.C., Newark, NJ, Loomis Fargo was requiring overtime of workers but not paying overtime as required by New Jersey law.
But three years ago the N.J. Department of Labor promulgated a regulation requiring employers to pay one-and-a-half times the state minimum wage, not a multiple of the employee's regular pay. Since most New Jersey truck drivers already earn more than one-and-a-half times the minimum wage, the regulation negated the law for all practical purposes.
The regulation was issued after hearings at which it was claimed New Jersey carriers would lose business to out-of-state competitors if they were required to pay time-and-a-half based on actual salary. The Labor Department said its regulation was intended to protect the jobs of New Jersey drivers.
David M. Vaughan, a lawyer with Elarbee, Thompson & Trapnell, LLP, of Atlanta, GA, argued Loomis, Fargo's case before the three-judge panel. He said he will request that the case be reheard by the full Circuit Court. If the court refuses, which is likely, Vaughan said the possibility of taking the case to the U.S. Supreme Court would be considered.

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