DANCE, INC. VS. NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-3035-16T2
DANCE, INC.,
Petitioner-Appellant,
v.
NEW JERSEY DEPARTMENT
OF LABOR AND WORKFORCE
DEVELOPMENT,
Respondent-Respondent.
_____________________________
Argued December 19, 2018 – Decided January 14, 2019
Before Judges Alvarez and Reisner.
On appeal from New Jersey Department of Labor and
Workforce Development, Docket No. 13-009.
John D. Williams argued the cause for appellant (Law
Office of John D. Williams, attorneys; John D.
Williams, on the briefs).
Rimma Razhba, Deputy Attorney General, argued the
cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa Dutton Schaffer, Assistant
Attorney General, of counsel; Rimma Razhba, on the
brief).
PER CURIAM
Petitioner Dance, Inc. operates a go-go bar.1 Petitioner appeals from a
February 8, 2017 final administrative decision of the Commissioner of the New
Jersey Department of Labor and Workforce Development (Commissioner)
assessing tax liability owed under the unemployment compensation statute,
N.J.S.A. 43:21-7.
Petitioner argues that it is not liable for unpaid contributions to the
unemployment fund for the exotic dancers who worked at the club from 2002
through 2005, contending the dancers were independent contractors. The
Commissioner disagreed, finding that (1) the dancers were presumed to be
employees because they worked for tips, which is a form of remuneration under
the statute, and (2) petitioner failed to satisfy any of the three prongs of the ABC
test, used to determine whether workers are employees or independent
contractors. See N.J.S.A. 43:21-19(i)(6)(A-C). Petitioner also challenges the
amount of the assessment, an issue the Commissioner addressed in his decision.
As remedial legislation, the unemployment statute is to be interpreted
liberally. See Carpet Remnant Warehouse, Inc. v. New Jersey Dept. of Labor
1
During the administrative hearing, petitioner's attorney repeatedly referred to
the club as a "go-go" bar. Petitioner also refers to its establishment as a
gentlemen's club.
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(CRW), 125 N.J. 567, 581 (1991). Although the agency's legal interpretations
are not binding on us, we will defer to the Commissioner's reasonable
construction of the statute the agency is charged with enforcing. See Van Sickle
v. Bd. of Review, 372 N.J. Super. 460, 463-64 (App. Div. 2004) (citing Van
Dalen v. Washington Twp., 120 N.J. 234, 245 (1990)); CRW, 125 N.J. at 587.
We will not disturb the Commissioner's factual findings so long as they are
supported by substantial credible evidence. Brady v. Bd. of Review, 152 N.J.
197, 210 (1997). After reviewing the record with those legal standards in mind,
we affirm substantially for the reasons stated in the Commissioner's final
decision. We add these comments.
The statute defines "employment" as any service "performed for
remuneration or under any contract of hire, written or oral, express or implied."
N.J.S.A. 43:21-19(i)(1)(A). The statute defines "remuneration" broadly to
include "all compensation for personal services, including commission and
bonuses and the cash value of all compensation in any medium other than cash."
N.J.S.A. 43:21-19(p). Under the statute, wages paid by the employer are a form
of remuneration. N.J.S.A. 43:21-19(o). However, tips or "gratuities" are also a
form of remuneration. See N.J.S.A. 43:21-19(o); N.J.A.C. 12:16-4.1(b)(9)
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(including tips and gratuities in a list of "remuneration issues"); N.J.A.C. 12:16-
4.9.
In this case, the dancers who worked at petitioner's club were paid
exclusively in the form of tips they received from the customers. Petitioner
required the dancers to sign a purported "Stage Rental/License Agreement"
defining the dancers as independent contractors and requiring them to "lease"
the right to use the club's stage. However, the agreement did not set forth any
rental amount, and it was written in English. When the agency's auditors visited
the club, they found that the dancers spoke exclusively Spanish or Portuguese.
Although petitioner received notice of an audit in January 2006, when the
auditors visited the club later that year petitioner had no documentation about
the dancers. According to Minesh Patel, the auditor who testified at the hearing,
the club's owner, Patrick Loprete, explained to him that the club did not keep
records about the dancers, because they were illegal immigrants from Brazil and
other South American countries. In rebuttal testimony, Loprete denied having
that conversation with Patel, but he did not deny that the dancers were
undocumented immigrants who spoke no English. Petitioner did not present
testimony from any former or current dancers who worked at the club.
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In his testimony, Loprete claimed that the dancers were independent
contractors who took no direction from him or the club manager, showed up
whenever they pleased, and had no obligation to work any particular schedules.
However, the club's website featured photographs of dozens of scantily-dressed
women, under the web page heading "Our Girls." The website also provided
schedules of the dancers who were to appear at the club each day. While Loprete
denied that the work of the dancers was integral to the club's business, he
admitted that there were dancers performing at the club every afternoon and
evening.
Neither the administrative law judge (ALJ) nor the Commissioner found
petitioner's evidence credible or sufficient. Based on the complete lack of
documentation or other corroboration for petitioner's contentions, the
Commissioner agreed with the ALJ that petitioner could not satisfy any of the
prongs of the ABC test. N.J.S.A. 43:21-19(i)(6)(A-C).
Pursuant to N.J.S.A. 43:21-19(i)(6), "[s]ervices performed by an
individual for remuneration shall be deemed to be employment" unless the
putative employer proves each of three prongs:
(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
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(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)(A-C) (emphasis added).]
We find no basis to second-guess the Commissioner's factual findings,
which are supported by substantial credible evidence. Petitioner's argument –
that the work of exotic dancers is marginal, rather than integral, to its business
– is frivolous. The contention is belied by petitioner's corporate name, its
website, and the description of the club's operation.
Petitioner's additional appellate arguments are without sufficient merit to
warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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