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Monday, January 27, 2020

NJ Independent Contractors and Whistleblowing, Am I Protected? Labels Can Be Illusory, Part 3

New Jersey's Conscientious Employee Protection Act (CEPA), N.J.S.A. §§ 34:19-1 to -8, defines an "employee" as any individual who performs services for and under the control and direction of an employer for wages or other remuneration. The statutory definition does not exclude, explicitly, persons who are designated as independent contractors performing services for an employer for remuneration. Therefore, persons who designated as independent contractors are not automatically excluded from the protection afforded whistleblower employees.

D'Annunzio v. Prudential Ins. Co.

The 2007 case of D'Annunzio v. Prudential Ins. Co. of Am. determined that the definition of "employee" for purposes of whistleblower protection under CEPA, includes more than "traditional" employees. The D'Annunzio court stated that it must look to the goals underlying the CEPA statute and must not focus on the worker's labels as independent contractor or employee, but on the reality of the plaintiff's relationship with the party against whom the whistleblower CEPA claim is brought.

D'Annunzio streamlined the earlier Pukowsky test (which was a sexual harassment case brought under the New Jersey Law Against Discrimination) and applied a three-factor test to NJ whistleblower cases. The D'Annunzio court relied upon the reasoning of Pukowsky although Pukowsky was not a CEPA case.

In D'Annunzio, the Plaintiff filed a complaint against an insurer, alleging violations of New Jersey's Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8. D'Annunzio was a medical director in the insurer's personal injury protection department. His contract identified him as an independent contractor, terminable at will on 60 days' notice. D'Annunzio's job was to determine whether proposed treatments were "medically necessary" within the meaning of New Jersey law. After D'Annunzio reported to his supervisors, insurance violations he thought were being perpetrated by the insurer and its employees, his employer, the insurer, terminated its agreement with him.

The trial court dismissed D'Annunzio's CEPA claim, finding he was an independent contractor, not an was not an "employee" as defined by N.J.S.A. § 34:19-2(b). The Appellate Division, disagreed. The Appellate Division, applied the Pukowsky test and noted that whether a worker was an "employee" under CEPA's definition hinged on the degree of "control and direction" exercised over that worker. It found that evidence suggesting that the insurer controlled and directed D'Annunzio precluded summary judgment and it reversed and remanded. 

The employer defendants then appealed to the NJ Supreme Court. The NJ Supreme Court agreed with the trial court and held that Pukowsky applied to CEPA claims and although D'Annunzio's contract described him as an independent contractor, Plaintiff D'Annunzio presented many facts that supported there was an employment relationship between him and the insurer for CEPA whistleblower protection purposes.

The D'Annunzio Court explained its reasoning as follows:

"1. CEPA is designed to promote two complementary public purposes: to protect and thereby encourage employees to report illegal or unethical workplace activities and to discourage employers from engaging in such conduct. As broad, remedial legislation, the statute must be construed liberally.

2. CEPA defines "employee" as "any individual who performs services for and under the control and direction of an employer for wages or other remuneration." N.J.S.A. 34:19-2(b). As the Appellate Division noted, the definition does not exclude persons who are designated as independent contractors performing services for remuneration. Our courts have long recognized that, in certain settings, exclusive reliance on a traditional right-to-control test to identify an "employee" does not necessarily result in the identification of all those workers that social legislation seeks to reach. When CEPA or other social legislation must be applied in the setting of a professional person or an individual otherwise providing specialized services allegedly as an independent contractor, the considerations that must come into play are three:

(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."

As the D'Annunzio Court so clearly articulated, whether an employer labels an employee to be an independent contractor or not, it will not be the deciding factor as to whether the employee has CEPA protection, because for purposes of CEPA protections, the status is determined on a totality of the circumstances, not the label assigned by the employer.

DO NOT SIT ON YOUR RIGHTS!

Do not sit on your rights, or you may lose the right to file your claim.

If you are an independent contractor and think you have been retaliated against, it is essential for you to contact an experienced, competent and successful employment whistleblower attorney who will be aggressive about enforcing your rights as soon as possible.

If you have been demoted, had your hours cut, terminated, harassed or been subjected to retaliation for complaining about, objecting to, refusing to participate in, or reporting what you believe is your employer’s illegal or improper conduct, you should contact this law firm as soon as possible. I am an experienced, competent and compassionate employment attorney who will be aggressive about enforcing your rights. I am successful in bringing whistleblower lawsuits and recovering money for whistleblower workers.

If you are being subjected to such unlawful workplace retaliation, contact Hope A. Lang, Attorney at Law today for a free consultation. I accept whistleblower and discrimination cases from all over New Jersey.

New Jersey employment attorney, Hope A. Lang, Attorney at Law serves clients throughout the state, including Bergen, Middlesex, Essex, Hudson, Monmouth, Ocean, Union, Camden, Passaic, and Morris Counties with locations in Southern, Central, Western and Northern NJ to meet with clients.

 


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