Independent Contractor Battles Fought On Many Fronts, Though Same Issue Persists

Fox Rothschild LLP

Fox Rothschild LLP

The significance of the issue of independent contractor cannot be underestimated these days and this battle is being waged on any number of fronts, including when an entity may or may not enter a litigation as an intervener.  In a recent case, a New Jersey real estate trade association has been denied to enter an independent contractor class action lawsuit because it cannot supposedly show the ultimate decision in the case will impact the entire real estate industry.  The case is entitled Kennedy v. Weichert Co. d/b/a Weichert Realtors, and issued from the New Jersey Appellate Division.

The plaintiffs accuse their employer of unlawful deductions from their paychecks, because they were deemed independent contractors.  These would be deductions that an employer would normally and traditionally pay for statutory employees.  The association, NJ Realtors, had contended that a loss for Weichert would disrupt the longstanding relationship between real estate brokers and their agents.  The appellate court ruled that the trial court’s decision in the matter would fail to exert any precedential effect on another court.

The Court also would not allow NJ Realtors to intervene because the entity being sued, Weichert, was only protecting and seeking to vindicate its own interests.  The Court found that “NJR has not demonstrated that its ultimate objective differs from Weichert’s, or that its interests differ with respect to the law governing the relationship between salespersons and brokers.”

The Court, however, did allow the organization to appear as an amici, friend-of-the-court party.  This means the organization can submit a brief and take part in oral argument.  The ex-Weichert sales agent alleged that his employer misclassified these agents as independent contractors.  It then deducted marketing fees and costs related to the commissions, as well as compelling them to pay their own trade association dues.  The named plaintiff alleged that the amount of control exercised by Weichert rendered him and the others employees, thereby making these expenses the employer’s expenses, illegally deducted from the compensation.

The Company contended that the state Unemployment Compensation Law specifically excludes real estate agents from being “employees.”  Moreover, a favorable ruling for the worker would undo decades of past practice in the industry.

The Takeaway

I think the party who sought to intervene had more than a fair, and an actual, stake in this matter.  The bigger point is the highlighting of the intense focus that the independent contractor battle is receiving, regardless of the forum chosen.

I hope they file a great amicus brief…

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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