June 16, 2015

Analysis of whether a plaintiff is an "employee" under CEPA or the LAD

In, Estate of Kotsovska v. Liebman, 2015 N.J. LEXIS 568, 39-41 (N.J. June 11, 2015)the Supreme Court has reaffirmed the analasis to be conducted under CEPA and LAD where  the plaintiff’s status as an “employee” is at issue. The Court found that “labels can be illusory as opposed to illuminating” when taken out of context.  It also restated its view that in interpretating “social legislation [it] must be applied in the setting of a professional person or an individual otherwise providing specialized services allegedly  as an independent contractor;” the trial court should consider three factors: “(1) employer control; (2) the worker’s economic dependence on the work relationship; and (3) the degree to which there has been a functional integration of the employer’s business with that of the person doing the work at issue.”

In assessing these factors, the Court noted with approval the “hybrid” test established by the Appellate Division in Pukowsky v. Caruso, 312 N.J. Super. 171, 182-83 (App. Div. 1998).  In Pukowsky, which was decided in the context of a Law Against Discrimination (LAD) claim, the appellate panel identified twelve factors for courts to consider when determining a worker’s status:(1) the employer’s right to control the means and manner of the worker’s performance; (2) the kind of occupation — supervised or unsupervised; (3) skill; (4) who furnishes the equipment and workplace; (5) the length of time in which the individual has worked; (6) the method of payment; (7) the manner of termination of the work relationship; (8) whether there is annual leave; (9) whether the work is an integral part of the business of the “employer”; (10) whether the worker accrues retirement benefits; (11) whether the “employer” pays social security taxes; and (12) the  intention of the parties.

[Pukowski, supra, 312 N.J. Super. at 182-83 (quoting Franz v. Raymond Eisenhardt & Sons, Inc., 732 F. Supp. 521, 528 (D.N.J. 1990)).]“This test is a hybrid that reflects the common law right-to-control test,” D’Annunzio, supra, 192 N.J. at 123 (citing Restatement (Second) of Agency, § 220 (1957)), and the “economic realities” aspect of the nature-of-the-work test, ibid.]