18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 425 review, the Commissioner issued a final agency decision reinstating in full the auditor’s findings, thereby making Defendant liable for $42,120.79 in unpaid contributions to the fund, plus penalties and interest. Id . at *3. On appeal, the New Jersey Appellate Division affirmed in part and reversed in part the findings. Of the 16 providers identified by the auditor, four were individuals and 12 were business entities. All 12 of the businesses had ceased operations prior to the audit and thus, the auditor concluded there was insufficient information to determine that any of those twelve business entities were bona fide sub-contractors eligible for 1099 status. Of the four individuals the auditor classified as non- bona fide sub-contractors, the auditor determined that two did not operate as businesses sufficient to be established as sub-contractors. The Appellate Division agreed with the ALJ that Plaintiff sufficiently demonstrated that it did not exert sufficient control over the work of the installers to function as their employer. The Appellate Division noted that installers declined proposed projects offered by East Bay, had no significant direction and supervision by Defendant at the job sites, possessed autonomy in deciding how many workers to enlist to complete the work, and furnished all of their own tools and equipment. Id . at *19. The Appellate Division also affirmed the Commissioner’s determination that Plaintiff failed to establish the business independence of JEC Construction and Caslo Drywall Corp. However, as to the remaining installers, the Appellate Division reasoned that each provided certificates of insurance to established that they were limited liability corporations, and thus should be treated as sub-contractors under the law. Accordingly, the Appellate Division affirmed the Commissioner’s final agency decision treating East Bay as the employer of Dan Martin, Ami Serra, Kyle Cuevas, JEC Construction, and Caslo Drywall Corp. to the extent they were not viable independent business entities, and reversed to the remaining disputed installers. Id . at *22. For these reasons, the Appellate Division affirmed in part and reversed in part the Commissioner’s decision. Grillo, et al. v. State Of New Jersey, Case No. A-1038-19 (N.J. App. Div. Aug. 31, 2021). Plaintiffs, a group of participants in the State Health Benefits Program (“SHBP”), filed a class action seeking declaratory relief to permit temporary disability benefits to substitute for the SHBP’s salary base requirements of Chapter 78, which mandated that public employees contribute to healthcare premiums on a sliding scale rising with wages. Plaintiffs were all injured at work and received temporary disability benefits through workers’ compensation. Plaintiffs asserted that they made contributions to the SHBP based on their wages, not their earnings while they were receiving temporary disability benefits, and therefore the contributions were higher than they would be if the contributions were based on temporary disability benefits. Plaintiffs therefore requested a declaration that their temporary disability benefits were “base salary” under the SHBP premium cost contribution statute. Id . at 7. Defendant moved to dismiss, and the trial court granted the motion. On appeal, the New Jersey Appellate Division affirmed the trial court’s ruling. The Appellate Division ruled that the Legislature’s intent was clear from the plain language of Chapter 78, which outlined 18 tiers of earning and corresponded to specific percentage of contributions for family health plan coverage, 15 tiers for individual coverage, and 15 tiers for plan members plus a spouse or children. The Appellate Division reasoned that there was no basis in its statutory construction to substitute temporary disability benefits for a collectively bargained for salary. Id . at 10. Accordingly, the Appellate Division affirmed the trial court’s ruling granting Defendant’s motion to dismiss. Kennedy, et al. v. Weichert Co., 2021 N.J. Super. Unpub. LEXIS 1354 (N.J. App. Div. July 2, 2021). Plaintiff, a real estate salesperson, brought a putative class action alleging that Defendant violated the limitation in the New Jersey Wage Payment Law’(“WPL”) on wage withholdings or diversions by deducting marketing, insurance, and other expenses from his wages. Defendant moved to dismiss for failure to state a claim and argued that fully commissioned real estate salespersons were independent contractors, and therefore not covered by the WPL as a matter of law. Alternatively, Defendant asked the trial court to declare that the ABC test did not apply, and that the parties’ independent contractor agreement defined their relationship under the Brokers Act. The trial court denied the motion to dismiss and declared that the ABC test governed. On Defendant’s appeal, the New Jersey Appellate Division affirmed the trial court’s order denying Defendant’s motion to dismiss. Defendant raised two principal arguments why the ABC test did not apply here, including that: (i) the Unemployment Compensation Law (“UCL”), which included the ABC test, exempted fully commissioned real estate salespersons; and (ii) the ABC test was inconsistent with the Brokers Act’s more specific provisions on real estate salespersons’ status. First, the Appellate Division outright rejected Defendant’s argument that real estate salespersons were exempt, as a matter of law, from the WPL, because they are exempt from the UCL. Second, Defendant also argued that applying the ABC test in this case was inconsistent with the Brokers Act, which defined aspects of the relationship between brokers and licensed salespersons. The Appellate Division