Your Hometown Title, LLC v. New Jersey Department of Labor and Workforce Development ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-1168-21
YOUR HOMETOWN TITLE, LLC,
Petitioner-Appellant,
v.
NEW JERSEY DEPARTMENT OF
LABOR AND WORKFORCE
DEVELOPMENT,
Respondent-Respondent.
_______________________________
Argued January 16, 2024 – Decided January 31, 2024
Before Judges Mawla, Marczyk, and Chase.
On appeal from the Department of Labor and
Workforce Development, Docket No. DOL-20-007.
Adam Edward Gersh argued the cause for appellant
(Flaster Greenberg, PC, attorneys; Adam Edward
Gersh, on the briefs).
Achchana C. Ranasinghe, Deputy Attorney General,
argued the cause for respondent (Matthew J. Platkin,
Attorney General, attorney; Donna Sue Arons,
Assistant Attorney General, of counsel; Achchana C.
Ranasinghe, on the brief).
Alan Lee Poliner argued the cause for amicus curiae
New Jersey Land Title Association (Davison, Eastman,
Muñoz, Paone, PA, attorneys; Alan Lee Poliner, on the
brief).
PER CURIAM
Petitioner Your Hometown Title, LLC ("YHT") appeals from a November
8, 2021 final administrative action of the Commissioner of the Department of
Labor and Workforce Development ("DOL") finding YHT responsible for
contributions under the New Jersey Unemployment Compensation Law
("UCL"), N.J.S.A. 43:21-1 to -71, between 2015 and 2018. Based on our review
of the record and applicable legal principles, we affirm.
I.
YHT is a company that issues title insurance for property. It also provides
real estate settlement services and "closings." In September 2018, the DOL
audited YHT to determine whether it complied with the UCL by making
appropriate contributions to the unemployment compensation and state
disability benefit funds for the period between January 1, 2015 and December
31, 2018.
The audit revealed there were twelve individuals classified as independent
contractors who should have been classified as employees, including title
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abstractors, notaries, closers, and a cleaner. In August 2019, the DOL sent YHT
a letter assessing $6,576.88, along with applicable interest and penalties, for
unpaid contributions to the unemployment and disability funds because of the
misclassification. The DOL later amended the assessment to $6,065.88.
In September 2019, YHT advised the DOL it was contesting the
assessment and requested a hearing. The DOL referred the matter to a
redetermination auditor who affirmed the assessment. YHT appealed the
determination, and the case was transmitted to the Office of Administrative Law
for a hearing before an administrative law judge ("ALJ").
In June 2021, the ALJ issued an initial decision. The ALJ found YHT did
not satisfy the ABC test 1 regarding one of the twelve individuals, Helen
Madrigali, who was a notary. The ALJ found Madrigali sometimes worked at
YHT's office and received most of her income from YHT. The other eleven
individuals were found to be independent contractors.
On November 8, 2021, following a de novo review of the record, the
Commissioner issued a final administrative action. He agreed with the ALJ that
Madrigali was an employee of YHT during the audit period, however, he
1
As discussed below, the UCL sets forth the so-called ABC test for evaluating
whether workers are employees or independent contractors. N.J.S.A. 43:21-
19(i)(6)(A) to (C).
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rejected the ALJ's determination as to the other eleven individuals. He found
YHT did not meet the ABC test for any of the twelve individuals, and therefore,
they were employees misclassified as independent contractors.
Under prong A of the ABC test, the Commissioner found YHT failed to
meet its burden for the agents whose services it engaged during the audit period,
in part because of an "Independent Vendor Services Agreement," "Vendor
Services Agreements," "Witness Only Closer Instructions," and "Notary Signing
Agent Code of Conduct." He also relied on the testimony of multiple witnesses
who confirmed YHT had a degree of control over the agents, which he found
"consistent with an employment relationship and belie[d YHT's] assertion that
these individuals were free from control or direction by YHT."
The "Independent Vendor Services Agreement" that closers, notaries, and
title abstractors were required to sign as a condition of performing services for
YHT stated they were required to: "complete tasks in strict compliance" with
YHT's "instructions and parameters"; "perform services" for YHT "within the
specific time frame set forth" in YHT's instructions; advise YHT of "any
inability or failure to complete any assignment as per the instructions provided"
by YHT "immediately upon such inability or failure to complete any
assignment"; maintain "errors and omissions insurance coverage in an amount
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of not less than $1,000,000.00 per occurrence"; "not respond to, or take, any
assignment to perform services hereunder unless" they could "perform such
services in the time frame specified" and to "remain in contact with [YHT]
regarding the status of services being performed"; "thoroughly read the Notary
Signing Agent Code of Conduct" and "agree[] to adhere, abide and be bound"
by same if they "provide[] notary or related services"; and shall "not assign or
subcontract this Agreement or any rights or obligations hereunder without the
prior written consent" of YHT.
Further, the Commissioner noted the "Vendor Services Agreement . . .
contains instructions regarding the performance of the job for which the
individual is being engaged by YHT[.]" For example, the "Vendor Services
Agreement" for title abstractors contains: instructions regarding what the
abstractor must report about the subject property; requirements for performing
searches on prior owners of the subject property; how to submit reports of chain
of title; what documents are required to be included in the search report; a
minimum span of years to search for title documents; and a requirement to check
for open mortgages and judgments.
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Further, the services agreement for closers includes a document titled
"Instructions for Witness Only Closer[s,]" which contains the following
guidelines:
(1) "Maintain professionalism at all times. The
dress code expected is 'business casual;'"
(2) "Contact customer prior to arrival to confirm
your identity and time of arrival;"
(3) "Provide your photo ID to the customer to
verify your identity;"
(4) "Obtain customer photo ID and complete
information on the provided form;"
(5) "Have borrower(s) sign off on all judgments.
If any belong to borrower(s), please call office
immediately;"
(6) "Collect balance due on settlement sheet.
Payments must be via a certified check made payable
to Surety Title Company, LLC. Contact Surety Title
Company, LLC for approval of personal check;"
(7) "Have borrower(s) fill out marital history on
Affidavit of Title and please notarize this document;"
(8) "Advise borrower(s) that in most cases, it is
the policy of Surety Title Company, LLC to send credit
card payments directly to them for forwarding to their
creditors;"
(9) "Have all borrower(s) sign all documents in
the mortgage package EXACTLY as their names
appear on the documents. Do not initial pages unless
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there is a place on the page for initials, in which case
borrowers must initial;"
(10) "Non-borrowing spouse must sign the
Mortgage, Right-to-Cancel, Truth-In-Lending and
Itemization of Amount Financed;"
(11) "Please keep package in the order received
and return in that order;" and
(12) "Return package to our office in UPS
envelope provided as soon as possible. Closings
scheduled prior to 6PM must be sent out on the day of
signing."
Additionally, the Commissioner noted, notary signing agents are required
to sign a document titled "Notary Signing Agent Code of Conduct," which
required the signing agents to agree to the "attached code of conduct and that
the . . . Code of Conduct is incorporated into the Vendor Services
Agreement . . . ."
The Commissioner found the above clauses reflect a "substantial degree
of control" over the individual engaged with YHT. He found the fact the
documents expressly state the individual engaged "shall" complete tasks "in
strict compliance" with YHT's "instructions and parameters," which are
enumerated in detail in the instructions, indicates a degree of direction and
control inconsistent with the relationship between an independent contractor and
a party that has engaged their services. The Commissioner rejected YHT's
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contention that the instructions and vendor services agreements are simply
industry "best practices" and should not be considered indicia of control. He
noted the decision to impose these requirements—regardless if they reflect best
practices—at YHT's sole discretion without any input from the closers, notaries,
or title abstractors, coupled with the substantive provisions in these documents,
is the "very essence of direction and control." Therefore, the Commissioner
determined YHT failed to satisfy prong A.
The Commissioner also found YHT failed to meet its burden on prong B
regarding the closers and notary signing agents. He found it did not establish
the services provided to YHT by the individuals,
namely preparing closing documents, witnessing the
signing of closing documents and executing post-
closing requirements during real estate closings
conducted at the location of YHT's clients, was either
outside the usual course of business . . . or that such
service was performed outside of all the places of
business of the enterprise for which such service was
performed.
He noted the Court in Carpet Remnant Warehouse, Inc. v. New Jersey
Department of Labor defined "places of business" to mean "those locations
where the enterprise has a physical plant or conducts an integral part of its
business." 125 N.J. 567, 592 (1991). He found because one of the principal
components of YHT's business is providing services during closings, the client
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locations where services are performed are locations where YHT performs "an
integral part of its business." Similarly, the performance of those services was
performed within YHT's "usual course of business."
The Commissioner found YHT met its burden on prong B regarding the
title abstractors. Although the abstractors' work is clearly within YHT's usual
course of business, the Commissioner found "it is unfair to characterize the
County Clerk's office, where [t]itle [a]bstractors perform abstracting services
for YHT, as among YHT's places of business."
The Commissioner noted in order to satisfy prong C, YHT needed to prove
"by a preponderance of the credible evidence with regard to each [c]loser,
[n]otary [s]igning [a]gent[,] and [t]itle [a]bstractor whose services it engaged
during the audit period that that individual was[,] during the audit period[,]
customarily engaged in an independently established business or enterprise (not
multiple employment)." Pursuant to Carpet Remnant, this meant
relative to each [c]loser, [n]otary [s]igning [a]gent[,]
and [t]itle [a]bstractor whose services YHT engaged
. . . it must address the duration and strength of each
individual's business during that period, the number of
customers and their respective volume of business
during that period, the number of employees of the
individual's business or enterprise during that period,
the extent of each individual's business resources
during that period and, perhaps most importantly, the
amount of remuneration each individual received from
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YHT during that period compared to that received from
others.
The Commissioner found YHT met its burden for all the individuals, with
the exception of Madrigali. He explained the closers, notaries, and title
abstractors engaged in "legitimate independent business enterprises . . . without
employees and without much in the way of 'tools, equipment, vehicles and
similar resources.'" He further noted these individuals engaged by YHT only
earned between one and twenty-eight percent of their Schedule C income in their
roles at YHT during the audit period and the balance of their income from other
clients. Further, "[t]hese individuals held themselves out as being available to
perform the subject services on a fee-for-service basis and performed those
services for multiple clients over the course of multiple years during the audit
period." On the other hand, Madrigali received eighty-eight percent of her
Schedule C income from YHT.
As for Saida Yusupova, who provided cleaning services for YHT, the
Commissioner found YHT met its burden as to prongs A and B, but not prong
C. He noted YHT merely submitted a single invoice, and no other evidence, to
suggest she provided cleaning services for other clients. Noting that it was
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YHT's burden 2 to prove Yusupova was an independent contractor, he observed
YHT failed to rebut the presumption of employment that arose when the
individual's services were provided for remuneration.
The Commissioner dismissed YHT's appeal, and it was ordered to remit
$6,065.88 to the DOL for the years 2015 through 2018 in unpaid unemployment
and disability contributions, along with applicable interest and penalties. This
appeal followed.
II.
A.
YHT argues it presented sufficient evidence proving the individuals it
engaged for work met the ABC test. It relies on East Bay Drywall, LLC v.
Department of Labor and Workforce Development, 467 N.J. Super. 131, 150-51
(App. Div. 2021), where we addressed prong A as follows:
Among other things, we find noteworthy the ability of
the installers to decline proposed projects offered by
East Bay, the absence of significant direction and
supervision by East Bay at the job sites, the autonomy
of the installers in deciding how many workers to enlist
to complete the work, and the installers' furnishing of
their own tools and equipment while East Bay supplied
the drywall and materials.
2
The DOL unsuccessfully attempted to obtain Yusupova's tax returns, but it
was not its burden to prove she was not customarily engaged in an independently
established trade.
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Though East Bay was reversed,3 YHT contends this reversal was based on prong
C and this court's prong A and B analysis was not reversed.
YHT also likens this case to the facts in Trauma Nurses, Inc. v. New Jersey
Department of Labor, because it argues the testimony showed all the individuals
could accept or decline assignments, were not subject to any material "direction
and supervision," and had autonomy on how to complete their work. 242 N.J.
Super. 135, 147 (App. Div. 1990). Further, the individuals set their own pricing
and profited from their own businesses.
YHT argues the agreements upon which the Commissioner relied were not
implemented until 2017, despite the fact that the DOL challenges the contractor
status of the individuals for years 2015-2016. Moreover, John DeSantis, vice
president of finance for Surety (the company that owns YHT), testified the
standards set forth in the documents simply reiterate industry standards. YHT
concedes the agreement included a required dress code but contends "it did not
impose a dress code or have any material control over how the work was done."
YHT argues the requirement that individuals engaged in work with the
company maintain insurance demonstrates they operate a separate business. As
3
East Bay Drywall, LLC v. Dep't of Labor & Workforce Dev., 251 N.J. 477(2022).
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DeSantis testified, if a title policy becomes the subject of litigation, frequently
all businesses involved in the transaction may be named. YHT asserts it was
merely making sure the individuals had sufficient insurance so that it would not
be the only defendant in such an action. YHT contends the above facts
demonstrate it met prong A, and the workers at issue are not employees.
As to prong B, YHT argues all work was performed exclusively outside
of its place of business. Because prong B can be proven by either showing the
service is outside of the usual course of business or that it is performed outside
of the places of business of the enterprise for which the service is performed,
YHT contends the Commissioner's conclusion that conducting closings and
abstracting titles outside of the office is integral to YHT's business is not legally
dispositive. YHT states it does not offer these services to the public but hires
vendors to perform the service for it so it can, in turn, sell title insu rance. It
further contends it hires other outside companies to conduct judgment searches,
but that type of service is also outside the scope of its business.
With respect to prong C, YHT argues the Commissioner erred in finding
Madrigali and Yusupova did not meet the standard under the ABC test.
Madrigali testified she eventually began working nearly exclusively with YHT
and turning down other assignments, but YHT contends this was her choice
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based on mere preference, and Madrigali still took assignments from other
companies when she worked more.
YHT argues that even though Yusupova performed her work onsite, she
did not perform work integral to YHT's business. Yusupova had her own
business "and was not even available to clean other offices for YHT affiliates
because she had so many other clients."
Amicus curiae New Jersey Land Title Association ("NJLTA") argues the
Commissioner misapplied the facts in pursuit of a new agenda of the DOL.4
NJLTA asserts the Commissioner's final decision came months after these bills
became law, and therefore "it seems that policy (or political) considerations got
in the way of an objective assessment of the facts in this case."
NJLTA argues the Commissioner substituted his judgment for that of the
ALJ without factual support, and therefore no deference should be given to his
final decision. It further asserts the Commissioner relied on the "Notary Signing
4
NJLTA points to legislation enacted in July 2021 to "crack down" on
employers who misclassify independent contractors as employees. Specifically,
it references Pub. L. 2021, ch. 165 ("AN ACT concerning enforcement of
various laws regarding employee misclassification"); Pub. L. 2021, ch. 166
("AN ACT concerning the establishment of the 'Office of Strategic Enforcement
and Compliance' in the Department of Labor and Workforce Development");
and Pub. L. 2021, ch.167 ("AN ACT concerning employee misclassification and
insurance fraud").
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Agent Code of Conduct," which was not part of the record. That code only
refers to standards of honesty and fidelity. It asserts industry standards and
codes of conduct are not the same as instructions. It further argues the
Commissioner's reliance on same is arbitrary and capricious.
NJLTA contends the Commissioner gave too much weight to portions of
the "Independent Vendor Services Agreement" clauses and disregarded the
ALJ's evaluation of this agreement. NJLTA asserts the clauses in the agreement
pertaining to time frames to complete an assignment represent a deadline which
is out of the title agent's control. It notes the buyer and seller of a property have
a contract with a set date to close the sale, and if the date is not met, the sale can
be canceled. Thus, this time frame is not controlled by YHT.
NJLTA argues the clause prohibiting assignment or subcontracting of the
work supports independent contractor status as well. This clause merely
prevents individuals in the profession, chosen to do the work, from assigning
the work to another with lesser or unknown qualifications and experience.
NJLTA asserts the Commissioner made superficial conclusions by focusing on
language in the contractor agreements such as "instructions" and "parameters."
It argues the final decision chooses form over substance, though it is clear the
instructions or parameters refer to "what to do" rather than "how to do it."
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NJLTA also argues the ABC test was met. It argues prong A was satisfied
because the closers, notaries, and abstractors are free from control or direction
from YHT, primarily for the reasons found by the ALJ. Further, they point to
the Supreme Court's statement in East Bay that "a certificate of insurance could
be a significant indication of independence because an employer is generally not
vicariously liable for the negligent acts of the contractor in the performance of
the contract, . . . and insurance policies issued to employers often exclude
coverage for the acts of independent contractors." 251 N.J. at 499 (internal
quotation omitted). Here, NJLTA argues employee status is negated by virtue
of the individuals carrying their own insurance.
As to prong B, NJLTA contends the Commissioner incorrectly found that
the principal components of YHT's business are providing notary and closing
services. It argues the principal business of YHT, and all title agents, is
providing title insurance. The services provided by these individuals are merely
ancillary to the insurance service. Because the services are not an integral part
of YHT's business, NJLTA contends the closing and notary services performed
outside of YHT's location meet prong B. 5
5
Because the Commissioner found prong C was met for all of the closers, notary
signing agents (except Madrigali), and title abstractors, NJLTA did not address
this prong.
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The DOL counters the Commissioner properly held YHT failed to meet
prong A's requirements for the title abstractors, notaries, and closers and that the
agreement he relied upon in coming to this conclusion had ample support. Not
only did all the individuals engaged by YHT sign the agreement, they were also
required to adhere to role-specific addendums to the agreement which contained
specific "instructions and parameters" they were required to comply with. As
such, the DOL argues the degree of YHT's control over the abstractors, notaries,
and closers meets the "some level of control" standard for prong A established
in Carpet Remnant, 125 N.J. at 582-83, and Hargrove v. Sleepy's, LLC., 220
N.J. 289, 305 (2015).
The DOL asserts that although YHT argues the instructions given to the
engaged individuals reflect industry standards in practice, this contention
ignores the fact YHT still elected to adopt the instructions, thereby mandating
compliance with them as a condition of providing services for YHT. Moreover,
the instructions adopted by YHT are not codified in the New Jersey
Administrative Code, and they are neither authoritative nor required. Rather,
requiring the individuals to comply with these instructions was a means of
exercising control over the way they perform jobs. As such, the DOL argues
YHT failed to meet the burden under prong A.
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The DOL further argues YHT did not meet its burden under prong B as to
the notaries and closers. It argues the subject notaries and closers provide the
same services as YHT's "internal closers" and therefore, it is within the "usual
course" of business of YHT. Though the closers and notaries here perform
closing services at client locations, it is an integral part of its business under
Carpet Remnant, 125 N.J. at 592. As such, the DOL argues the Commissioner
correctly found prong B was not met by YHT.
B.
The scope of our review is narrow. Appellate courts review decisions
"made by an administrative agency entrusted to apply and enforce a statutory
scheme under an enhanced deferential standard." East Bay, 251 N.J. at 493
(citing Hargrove, 220 N.J. at 301-02). That enhanced deference stems, in part,
from "the executive function of administrative agencies . . . ." Mazza v. Bd. of
Trs., Police & Firemen's Ret. Sys., 143 N.J. 22, 25 (1995). "An agency's
determination on the merits 'will be sustained unless there is a clear showing
that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the
record.'" Saccone v. Bd. of Trs., Police & Firemen's Ret. Sys., 219 N.J. 369,
380 (2014) (quoting Russo v. Bd. of Trs., Police & Firemen's Ret. Sys., 206 N.J.
14, 27 (2011)). The reviewing court "does not substitute its judgment of the
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facts for that of an administrative agency." Campbell v. N.J. Racing Comm'n,
169 N.J. 579, 587 (2001) (citing Clowes v. Terminix Int'l, Inc., 109 N.J. 575,
587 (1988)). Rather, the reviewing court "defer[s] to matters that lie within the
special competence" of the administrative agency. Balagun v. N.J. Dep't of
Corr., 361 N.J. Super. 199, 202 (App. Div. 2003) (internal citation omitted).
The party challenging the administrative action bears the burden of making that
showing. Lavezzi v. State, 219 N.J. 163, 171 (2014).
On appeal, the judicial role in reviewing an administrative action is
generally limited to three inquires:
(1) whether the agency's action violates express or
implied legislative policies, that is, did the agency
follow the law;
(2) whether the record contains substantial evidence to
support the findings on which the agency based its
action; and
(3) whether in applying the legislative policies to the
facts, the agency clearly erred in reaching a conclusion
that could not reasonably have been made on a showing
of the relevant factors.
[Allstars Auto Grp., Inc. v. N.J. Motor Vehicle
Comm'n, 234 N.J. 150, 157 (2018) (quoting In re
Stallworth, 208 N.J. 182, 194 (2011)).]
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"When an agency's decision meets those criteria, then a court owes substantial
deference to the agency's expertise and superior knowledge of a particular field."
In re Herrmann, 192 N.J. 19, 28 (2007). 6
Turning to substantive legal principles, the statutory framework at issue
in this appeal, the UCL, N.J.S.A. 43:21-1 to -71, "was designed to act as a
cushion 'against the shocks and rigors of unemployment.'" East Bay, 251 N.J.
at 494 (quoting Carpet Remnant, 125 N.J. at 581). Whether a putative employer
is required to pay into an unemployment benefits fund under N.J.S.A. 43:21 -7,
turns on whether its workers are employees or independent contractors. Id. at
484-85. Importantly, "[b]ecause the statute is remedial, its provisions have been
construed liberally, permitting a statutory employer-employee relationship to be
found even though that relationship may not satisfy common-law principles [of
6
Furthermore, "where there is substantial evidence in the record to support
more than one regulatory conclusion, it is the agency's choice which governs."
In re Adoption of Amends. to Ne., Upper Raritan, Sussex Cnty., 435 N.J. Super.
571, 583 (App Div. 2014) (quoting Murray v. State Health Benefits Comm'n,
337 N.J. Super. 435, 442 (App. Div. 2001)). "If the Appellate Division is
satisfied after its review that the evidence and the inferences to be drawn
therefrom support the agency head's decision, then it must affirm even if the
court feels that it would have reached a different result itself." Id. at 584(quoting Clowes, 109 N.J. at 588).
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employment]." Id. at 494 (second alteration in original) (quoting Carpet
Remnant, 125 N.J. at 581).
The UCL sets forth the ABC test for making that determination. Id. at
495; N.J.S.A. 43:21-19(i)(6)(A) to (C). Any service performed for renumeration
under any express or implied contract is presumed to be employment unless the
ABC test is satisfied. East Bay, 251 N.J. at 495. The statutory test reads:
Services performed by an individual for renumeration
shall be deemed to be employment . . . 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;
(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).]
Because the statutory ABC test is formulated in the conjunctive and
presumes that services for renumeration constitute employment, the party
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challenging the DOL's determination of an employer-employee relationship has
the burden of "establish[ing] the existence of all three criteria." East Bay, 251
N.J. at 495 (quoting Carpet Remnant, 125 N.J. at 581) (emphasis added). The
ABC test "is fact-sensitive, requiring an evaluation in each case of the substance,
not the form, of the relationship." Id. at 496 (quoting Carpet Remnant, 125 N.J.
at 581). "The factfinder must look beyond the employment contract and the
payment method to determine the true nature of the relationship." Ibid.
Prong A, known as the "control test," requires proof "that the provider of
services 'has been and will continue to be free from control or direction over the
performance of such services.'" Carpet Remnant, 125 N.J. at 582 (quoting
N.J.S.A. 43:21-19(i)(6)(A)). "The person must establish not only that the
employer has not exercised control in fact, but also that the employer has not
reserved the right to control the individual's performance." Ibid.
Here, the Commissioner reasonably classified the closers, notary signing
agents, and title abstractors as employees of YHT, rather than as independent
contractors, under the ABC test. With respect to prong A, the record
substantiates the Commissioner's finding that individuals at issue were subject
to a sufficient degree of control to be classified as employees. For example,
YHT's instructions for the title abstractors were detailed in nature and provided
A-1168-21
22
specific directions for addressing open or unsatisfied mortgages or deeds of trust
to institutional lenders; when to perform a search on the prior owner of a
property; when to perform a "bring-down" search; and what must be included in
a chain of title search. Specific corresponding instructions were also provided
for witness-only closers. All of these tasks were required to be completed "in
strict compliance" with YHT's "instructions and parameters."
YHT argues the agreements upon which the Commissioner relied were not
implemented until 2017, despite the DOL challenging the contractor status for
the subject individuals for years 2015-2016. However, the Commissioner did
not just rely on these documents. The Commissioner noted he relied on "the
testimony of witnesses confirming the practices of YHT" and "reflect[ing] a
degree of control over the [c]losers, [n]otary [s]igning [a]gents, and [t]itle
[a]bstractors that is consistent with an employment relationship and belies
[YHT's] assertion that these individuals were free from control or direction by
YHT." Moreover, YHT bears the burden under the statute to satisfy the ABC
test, and there is no indication that its guidelines or requirements for the
individuals at issue were materially different in the years 2015 to 2016 despite
the lack of a prior written agreement.
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Furthermore, we recognize YHT and NJLTA have advanced arguments in
support of prong A, such as the workers' ability to decline assignments, set their
own prices, and furnish their own equipment. However, "[i]n establishing
control for purposes of part A of the test, it is not necessary that the employer
control every aspect of the worker's trade; rather, some level of control may be
sufficient." Hargrove, 220 N.J. at 305. Moreover, our role is not to assess prong
A or the other prongs de novo. That is, we do not substitute our judgment for
that of the Commissioner. Campbell, 169 N.J. at 587 (citation omitted). Rather,
we must determine if YHT has made a clear showing the Commissioner acted
in an arbitrary, capricious, or unreasonable manner or that its decision lacked
fair support in the record. Saccone, 219 N.J. at 380 (quoting Russo, 206 N.J. at
27). We are unconvinced YHT has made such a showing.
The facts in Trauma Nurses are distinct from this case. The employer
there was akin to an agency who provided nurses to hospitals on a temporary
basis. 242 N.J. Super. at 137. The nurses there were not obligated to adhere to
a specific set of rules imposed by their employer, but rather they were required
to comply with the policies and procedures of the institution where they were
placed. Id. at 144-45. Here, the workers were required to comply with YHT's
specific vendor services agreement and "instructions and parameters"
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implemented by YHT, not an outside institution. These requirements imposed
on the workers by YHT support the ALJ's determination that the workers were
employees, not independent contractors.
We further observe that both YHT and NJLTA rely on the ALJ's analysis
of the facts and legal conclusions. However, those findings are not binding on
the Commissioner. In re Adoption of Amends., 435 N.J. Super. at 587. The
Commissioner's findings as to prong A were not plainly unreasonable and were
based on substantial evidence, and we must defer to those findings when
supported by the record, which was the case here.
Given our conclusion YHT failed to satisfy prong A, we need not address
the Commissioner's analysis as to prongs B and C regarding the closers, notary
signing agents, and title abstractors. We do briefly address prong C as it applies
to Yusupova. Although YHT claimed Yusupova had her own business, the
Commissioner determined YHT failed to submit sufficient evidence to rebut the
presumption of employment. Despite YHT having the burden to prove prong C
as to Yusupova, the DOL attempted to secure her tax returns to evaluate her
employment status. Those efforts were unsuccessful. The Commissioner noted
the DOL did not have to establish that Yusupova was customarily engaged in an
independently established trade. That was YHT's burden. YHT's failure to
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demonstrate her "UCL-exempt status" was fatal to YHT's attempt to establish
prong C. The Commissioner's finding that Yusupova did not meet the prong C
test was also supported by the record and was not arbitrary or capricious.
We discern no basis to disturb the Commissioner's conclusions in this
matter. To the extent we have not otherwise addressed them, all other arguments
raised by the parties on appeal lack sufficient merit to warrant discussion. R.
2:11-3(e)(1)(E).
Affirmed.
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