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Popular late-night delivery company says labor violations didn’t matter for $39M tax break

The Philadelphia-based late-night delivery company goPuff said it did not have to disclose multiple federal labor violations to New Jersey officials when it successfully applied for a $39 million tax incentive in July 2018.

In a letter to the state Economic Development Authority last month that was obtained by WHYY, a goPuff attorney said the firm did not consider its 15 federal overtime and minimum-wage violations to be a “legal proceeding” as defined by the application, so the company did not disclose them. (The company’s legal name is goBrands.)

“GoBrands re-reviewed the circumstances of its [Department of Labor] Investigation and again concluded that they did not meet the Authority’s threshold for disclosure,” wrote attorney Catherine M. Ward.

The claim comes amid a state task force investigation, initiated by Gov. Phil Murphy, to look into, in part, whether companies that benefited from the state’s massive tax break program were truthful in their applications and fulfilled the obligations of their tax incentive agreements.

Last month, WHYY reported that the U.S. Department of Labor found in May 2018 that goPuff was misclassifying delivery drivers in State College, Pennsylvania, and ordered it to pay $4,504 in back wages for minimum wage and overtime. The Labor Department determined that the company had violated the Fair Labor Standards Act.

In its letter to the EDA last month, goPuff acknowledged that it considered mentioning the federal violation in its application for a Grow NJ tax break, but decided it was not a “legal proceeding” that required disclosure.

The application defines a legal proceeding as “any State, Federal or foreign civil, criminal or administrative proceeding in a court or administrative tribunal in the United States, any territories thereof or foreign jurisdiction.”

The company did not respond to multiple requests for comment.

Virginia Pellerin, a spokeswoman for the New Jersey Economic Development Authority, said the company’s response is under review. It is unclear whether the EDA agrees with goPuff’s assertion that it was not required to disclose the federal labor violation on its application.

Pellerin previously said that a “violation of any laws governing hours of labor, minimum wage standards, prevailing wage standards, discrimination in wages, or child labor” could be grounds for disqualifying or disbarring a company from receiving a tax incentive.

Megan Chambers, co-manager of the Laundry, Distribution, and Food Service Joint Board labor union, said goPuff should not be rewarded with a tax incentive in light of its violation of labor laws.

“We are forgoing tens of millions of dollars in tax revenue so that this company can take our tax dollars,” Chambers said. “It’s just outrageous. It shouldn’t be allowed.”

GoPuff is one of nine companies the EDA contacted in recent weeks seeking clarifying information about their tax incentive applications.

Several of those companies have ties to South Jersey Democratic power broker George Norcross, whose insurance firm received one of the tax breaks.

Norcross sued Murphy to stop the task force investigation, which he said was politically motivated, but a state judge dismissed his claim. Norcross has appealed the decision.