Another Supreme Court Decision on a Certified Question, This Time on the Wage and Hour Law and Wage Payment Law

Hargrove v. Sleepy’s, LLC, 220 N.J. 289 (2015).  Today, speaking through Judge Cuff, the Supreme Court issued an opinion on a certified question posed to the Court by the Third Circuit Court of Appeals.  The question posed was “Under New Jersey law, which test should a court apply to determine a plaintiff’s employment status for purposes of the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.1, et seq., and the New Jersey Wage and Hour Law, N.J.S.A. 34:11-56a, et seq.?”  The Supreme Court accepted that question as phrased.  By a 6-0 vote, the Court concluded that the “ABC” test, derived from the New Jersey Unemployment Compensation Act, N.J.S.A. 43:21-19(i)(6), governs the decision of whether a plaintiff’s status is that of an employee or an independent contractor.  Under the “ABC” test, an individual is to be considered an employee, rather than an independent contractor, unless the employer proves that (A) “it neither exercised control over the worker, nor had the ability to exercise control in terms of the completion of the work,” (B) “the services provided were either outside the usual course of the business … or that such service is performed outside of all the places of business of the enterprise,” and (C) the plaintiff “has a profession that will plainly persist despite the termination of the challenged relationship.”

Judge Cuff analyzed the issues in great detail, and applied the several standard principles of statutory interepretation.  These included the fact that both the Wage Payment Law and the Wage and Hour Law are remedial and to be liberally construed, and the fact that the Department of Labor, the agency charged with implementing those statutes, had applied the ABC test, so that the agency’s view was entitled to deference.  Judge Cuff also evaluated alternatives to the ABC test that other courts had adopted, but found the ABC test to be most appropriate.

This is the third time in less than three years that the Supreme Court has decided, under Rules 2:12A-1 et seq., a case that arose out of a request by the Third Circuit for answers to certified questions.  The other two such recent cases were In re Princeton Office Park L.P. v. Plymouth Park Tax Servs., LLC, 218 N.J. 52 (2014), and Shelton v., Inc., 214 N.J. 419 (2013).  [Disclosure:  I argued for the successful plaintiffs before the Supreme Court in Shelton].  In the thirteen years prior to Shelton (Rule 2:12A became effective only in 2000), the Court had accepted for decision only three requests involving certified questions from the Third Circuit.  See Delta Funding Corp. v. Harris, 185 N.J. 255 (2006); Musikoff v.  Jay Parrino’s The Mint, LLC, 172 N.J. 133 (2002); Pittston Co. v. Sedgewick James, Inc., 165 N.J. 129 (2000).

The fact that the Court has accepted as many requests in the last three years as it did in the thirteen preceding years does not mean that the Court will now grant every request for a ruling on a certified question.  See Nuveen Mun. Trust v. Withumsmith + Brown, P.C., 213 N.J. 527 (2013) (“respectfully den[ying]” a petition under Rule 2:12A); see also Knoepfler v. Guardian Life Ins. Co. of America, 185 N.J. 612 (2005); In re Prof. Ins. Mgmt. v. Ohio Cas. Group of Ins. Cos., 169 N.J. 470 (2001); Brennan v. Norton, 174 N.J. 185 (2002) (all denying such petitions).  But it is notable that the Court has both received more such requests recently and has been more willing to grant them.  Whether this will be a continuing trend remains to be seen.