JPRC INC., ETC. VS. NEW JERSEY DEPARTMENT OF LABOR AND Â WORKFORCE DEVELOPMENT(NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1736-15T2
JPRC, INC. t/a LIQUID ASSETS,
Petitioner-Appellant,
v.
NEW JERSEY DEPARTMENT OF LABOR
AND WORKFORCE DEVELOPMENT,
Respondent-Respondent.
______________________________
Argued July 25, 2017 – Decided August 4, 2017
Before Judges Reisner and Suter.
On appeal from New Jersey Department of Labor
and Workforce Development, Docket No. 08-030.
John D. Williams argued the cause for
appellant (Mr. Williams and Bradley J. Shafer
(Shafer & Associates, P.C.) of the Michigan
bar, admitted pro hac vice, attorneys; Mr.
Williams and Mr. Shafer, on the briefs).
Anthony DiLello, Deputy Attorney General,
argued the cause for respondent (Christopher
S. Porrino, Attorney General, attorney;
Melissa H. Raksa, Assistant Attorney General,
of counsel; Mr. DiLello, on the brief).
PER CURIAM
Petitioner JPRC, Inc., t/a Liquid Assets (Liquid Assets)
appeals from a November 12, 2015 Final Administrative Decision of
the Commissioner of the Department of Labor and Workforce
Development (DOL). The Commissioner determined that exotic
dancers who worked at Liquid Assets' place of business1 during the
years 2002 through 2005 were employees, within the meaning of
N.J.S.A. 43:21-19(i)(1)(A), and assessed Liquid Assets
approximately $9000 for unpaid contributions to the unemployment
compensation fund and the State disability benefits fund. We
affirm.
On this appeal, there is no dispute that prior to 2003,
petitioner treated the dancers as employees. In response to our
question at oral argument, petitioner's attorney confirmed that
point. Beginning in 2003, petitioner unilaterally restructured
its relationship with the dancers, in an attempt to avoid having
them classified as employees. Petitioner stopped paying the
dancers any wages, and instead began charging them a small fee for
the right to "perform," and required them to obtain all their
compensation from the tips customers gave them and the fees the
dancers charged customers for "private dances." However, the
1
The establishment, variously described as a gentlemen's club or
go-go bar, is no longer in business.
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Commissioner determined that the evidence petitioner produced at
the hearing failed to satisfy the "ABC" test set forth in N.J.S.A.
43:21-19(i)(6).
The ABC test consists of the following three factors, all of
which an employer must satisfy to qualify for the exception set
forth in section 6. See Hargrove v. Sleepy's, L.L.C., 220 N.J.
289, 305 (2015); Carpet Remnant Warehouse, Inc., v. N.J. Dep't of
Labor, 125 N.J. 567, 581 (1991).
(6) Services performed by an individual for
remuneration shall be deemed to be employment
subject to this chapter . . . unless and until
it is shown to the satisfaction of the
division that:
(A) Such individual has been and
will continue to be free from
control or direction over the
performance of such service, both
under his contract of service and in
fact; and
(B) Such service is either outside
the usual course of the business for
which such service is performed, or
that such service is performed
outside of all the places of
business of the enterprise for which
such service is performed; and
(C) Such individual is customarily
engaged in an independently
established trade, occupation,
profession or business.
[N.J.S.A. 43:21-19(i)(6) (emphasis
added).]
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On this appeal, we will not disturb the Commissioner's
decision so long as it is supported by sufficient credible evidence
and is consistent with applicable law. See In re Musick, 143 N.J.
206, 216 (1996). Our review of legal issues is de novo, but we
owe "great deference" to the Commissioner's interpretation of the
statutes that the DOL is charged with enforcing. Hargrove, supra,
220 N.J. at 301-02 (citation omitted).
In its brief, petitioner contends that the dancers did not
perform services "for remuneration" within the meaning of N.J.S.A.
43:21-19(i)(6), the Commissioner's factual findings were not
supported by the record, and petitioner satisfied the ABC test. 2
After reviewing the record in light of the applicable legal
standards, we find no merit in those arguments, and we affirm
substantially for the reasons stated in the Commissioner's
thorough written decision.3 Petitioner's arguments do not warrant
2
Petitioner also raises two constitutional issues; however, as
presented on this appeal, those contentions are without sufficient
merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E). Petitioner's attempted analogy to theatre or concert
hall performers is without merit, as those services are exempt
from the unemployment statute. N.J.S.A. 43:21-19(i)(7)(M).
3
The pertinent record in this case covered the years 2002 to 2005,
as did the Commissioner's decision. Our opinion is limited to the
record presented to us and the years covered by the agency's
decision.
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additional discussion, beyond the following brief comments. R.
2:11-3(e)(1)(E).
We agree with the Commissioner that petitioner's evidence in
this case was insufficient to satisfy its burden of proof as to
the ABC test. For example, petitioner's website described its
premises as a "gentlemen's club" and a "go-go bar." The website
focused on the "erotic" entertainment, featuring "over 20 girls
daily," and promising prospective customers: "Our girls are
beautiful, erotic, friendly, professional and talented dancers."
Petitioner's advertising belied its claim that the dancers were
merely incidental or peripheral to petitioner's business of
serving food and drink. See N.J.S.A. 43:21-19(i)(6)(B). The club
owner's 2012 testimony, that the club's then-current operation
featured other forms of entertainment such as magicians and
singers, did not pertain to the relevant time period, which was
2002 to 2005.4
As the Commissioner noted, petitioner presented little
evidence concerning the individual dancers it alleged were
independent contractors. Only one of the dancer-witnesses, J.F.,
worked at the club during even a portion of the relevant time
4
Petitioner's financial records for 2002 to 2005 contained no
documentation concerning any performers other than the exotic
dancers.
5 A-1736-15T2
period. The two other dancer-witnesses knew nothing about the
operation of the club during the period 2002 to 2005. J.F. could
not recall if she began working at Liquid Assets in 2002 or 2003,
but testified that she left in 2003 and did not return for three
years. J.F. confirmed that when she began working at Liquid
Assets, the dancers were paid an hourly wage, plus whatever fees
and tips they collected from the customers. She testified that
at some point, petitioner imposed a new policy, under which the
dancers were no longer paid a wage and were required to pay the
club between $10 and $40 per shift for the right to work there.
Petitioner's ability to unilaterally impose a new mode of
operation on its existing employees - for the avowed purpose of
enabling petitioner to avoid paying unemployment taxes - did not
demonstrate the dancers' independence as "contractors." See
Special Care of N.J., Inc. v. Bd. of Review, 327 N.J. Super. 197,
211-12 (App. Div.), certif. denied, 164 N.J. 190 (2000). Rather,
it evinced petitioner's control over their working conditions. In
the context of this case, petitioner's evidence - that petitioner
stopped paying the dancers any wages, required them to work
entirely for tips and fees, and did not require them to report the
tips and fees to petitioner for tax purposes - does not undermine
the Commissioner's conclusion that the dancers performed their
services for "remuneration" within the meaning of N.J.S.A. 43:21-
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19. See N.J.S.A. 43:21-19(o) ("wages" include tips regularly
received in the course of employment); N.J.A.C. 12:16-4.9 (such
tips "are covered wages and are taxable to the maximum base even
though the employee has not reported the entire amount to the
employer.").
In summary, the Commissioner's decision was supported by
substantial credible evidence and, accordingly, we affirm.
Affirmed.
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