D'Annunzio v. Prudential Insurance Co. of America , 192 N.J. 110 ( 2007 )

Justice RIVERA-SOTO,

dissenting.

The Conscientious Employee Protection Act (CEPA), N.J.S.A 34:19-1 to -8, protects employees from enumerated retaliatory acts by their employers. Specifically, Section 3 of CEPA provides that “[a]n employer shall not take any retaliatory action against an employee because the employee” engages in whistle-blowing activity. N.J.S.A 34:19-3 (emphasis supplied). It provides remedies to “an aggrieved employee or former employee,” N.J.S.A. 34:19-5, and imposes on employers the duty to “conspicuously display, and annually distribute to all employees written or electronic notices of its employees’ protections, obligations, rights and procedures under [CEPA], and use other appropriate means to keep its employees so informed[,]” N.J.S.A 34:19-7.

In Section 2(b) of CEPA, N.J.S.A 34:19-2(b), the Legislature defined an “employee” entitled to CEPA’s protection as “any individual who performs services for and under the control and direction of an employer for wages or other remuneration.” Acknowledging that “[t]he question here is who is included in that definition^]” ante, 192 N.J. at 114, 927 A2d at 115, the majority concludes that, “in view of the premature stage of these proceedings and the truncation of discovery,” ante, at 127, 927 A.2d at 128,¹ D’Annunzio may qualify as an “employee” under CEPA and, hence, the summary judgment entered in Prudential’s favor by the trial court should be reversed. For two independent reasons, I respectfully dissent.

I.

As a matter of statutory interpretation, there is no need to engage in the Pukowsky² analysis embraced by the majority. The requirement that a CEPA claimant be a defined “employee” — as opposed to an “independent contractor” — was imposed by the Legislature, not by judicial fiat. In that context, our role is limited:

The “paramount [judicial] goal when interpreting a statute” is to determine and fulfill the legislative intent. DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005). To achieve that goal, we first look to the statutory language, State v. Pena, 178 N.J. 297, 307, 839 A.2d 870 (2004), and interpret the language in accordance with its plain meaning if it is “ ‘clear and unambiguous on its face and admits of only one interpretation.’ ” State v. Thomas, 166 N.J. 560, 567, 767 A.2d 459 (2001) (quoting State v. Butler, 89 N.J. 220, 226, 445 A.2d 399 (1982)). If the statute’s language “ ‘is susceptible to different interpretations, the court considers extrinsic factors, such as the statute’s purpose, legislative history, and statutory context to ascertain the legislature’s intent.’ ” Aponte-Correa v. Allstate Ins. Co,, 162 N.J. 318, 323, 744 A.2d 175 (2000) (quoting Twp. of Pennsauken v. Schad, 160 N.J. 156, 170, 733 A.2d 1159 (1999)); see also DiProspero, supra, 183 N.J. at 492-93, 874 A.2d 1039; State v. Pena, supra, 178 N.J. at 307-08, 839 A.2d 870.

[Thomsen v. Mercer-Charles, 187 N.J. 197, 206, 901 A.2d 303 (2006).]

We have summarized our task thusly: “When interpreting a statute or regulation, we endeavor to give meaning to all words and to avoid an interpretation that reduces specific language to mere surplusage.” DEM Residential Props. Corp. v. Twp. of Montgomery, 182 N.J. 296, 307, 865 A.2d 649 (2005) (citing Franklin Tower One v. N.M., 157 N.J. 602, 613, 725 A.2d 1104 (1999); Norman J. Singer, 2A Sutherland Statutory Construction § 46:06, at 190-92 (6th ed. 2000)). See also Twp. of Holmdel v. N.J. Highway Auth., 190 N.J. 74, 107-08, 918 A.2d 603 (2007) (Rivera-Soto, J., dissenting) (“When interpreting a statute, our overriding goal must be to determine the Legislature’s intent. We have explained that ordinarily, the language of the statute is the surest indicator of the Legislature’s intent. When, as here, the language is plain and clearly reveals the meaning of the statute, the court’s sole function is to enforce the statute in accordance with those terms. We also consider the overall legislative scheme, because our task is to harmonize the individual sections and read the statute in the way that is most consistent with the overall legislative intent.” (citations, internal quotation marks, and editing marks omitted)).

An application of that canon of construction leads inexorably to the conclusion that the Legislature is no stranger to the differences between an employee and an independent contractor; it has repeatedly made a distinction between the two. Thus, in those instances when the Legislature has seen fit to do so, it has made the terms “employee” and “independent contractor” synonymous. See, e.g., N.J.S.A. 12A:3-405(a)(l) (providing that, in respect of employer’s responsibility for forged endorsements on negotiable instruments, “ ‘[e]mployee’ includes an independent contractor and employee of an independent contractor retained by the employer”); N.J.S.A. 17B:27A-17 (defining, for health insurance benefit purposes, “[e]ligible employee” to “include[ ] ... an independent contractor, if the ... independent contractor is included as an employee under a health benefits plan of a small employer”); N.J.S.A. 34:15-3 (providing, for purposes of Workers’ Compensation Act, N.J.S.A. 34:15-1 to -69.3, that “[i]f an employer enters into a contract, written or verbal, with an independent contractor to do part of such employer’s work ... such contract ... shall not bar the liability of the employer for injury caused to an employee of such [independent] contractor”); N.J.S.A. 46:2F-10(d)(4) (exempting, from Rule Against Perpetuities, transfers to “current or deferred benefit plan[s] for one or more employees, independent contractors, or their beneficiaries or spouses”); N.J.S.A. 54:32B-2(i)(l)(C) (defining, for purposes of Sales and Use Tax Act, N.J.S.A 54:32B-1 to -43, “seller” as “[a] person who solicits business either by employees, independent contractors, agents or other representatives”).

Indeed, a recent legislative enactment underscores the Legislature’s recognition of the differences between employees and independent contractors and the steps the Legislature undertakes when it wishes to equate them. In the Construction Industry Independent Contractor Act, L. 2007, c. 114, § 4 (eff. July 13, 2007), the Legislature provided that “services performed in the making of improvements to real property by an individual for remuneration paid by an employer [as statutorily defined] shall be deemed to be employment unless and until it is shown” what an independent contractor status — as defined in the statute — exists. Illustrative of the importance the Legislature ascribes to the distinction between employees and independent contractors, that Act also provides for civil and criminal penalties if an employer miselassifies construction workers as independent contractors. Id. at §§ 5-7. Thus, the proposition that the Legislature is fully cognizant of how to — and entirely able to — treat “employees” and “independent contractors” as fungible terms admits of no serious dispute.

In contrast, the Legislature has acknowledged the difference between employees and independent contractors and, where it has discerned a need to do so, it has not hesitated to explicitly differentiate between them. See, e.g., N.J.S.A. 17B:32-89(a)(2) (exempting from immunity from liability granted to receivers and their employees under Life and Health Insurers Rehabilitation and Liquidation Act, N.J.S.A. 17B:32-31 to -91, those “retained by the receiver as independent contractors and their employees”); N.J.S.A. 34.TB-113 (providing, under Business Retention and Relocation Assistance Act, N.J.S.A. 34:1B-112 to -123, that “ ‘[f]ull-time employee’ shall not include any person who works as an independent contractor or on a consulting basis for the business”); N.J.S.A. 34:1B-125 (providing, under Business Employment Incentive Program Act, N.J.S.A. 34:1B-124 to -143, that “ ‘[flull-time employee’ shall not include any person who works as an independent contractor or on a consulting basis for the business”); N.J.S.A. 34:ll-4.1(b) (defining, under Wage Payment Law, N.J.S.A 34:11-2 to -33.6, “[ejmployee” as “any person suffered or permitted to work by an employer, except that independent contractors and subcontractors shall not be considered employees”); N.J.S.A 40A:10-l(c) (providing that local governmental unit may purchase insurance for its negligence or that of those “authorized to perform any act or services, but not including an independent contractor”); N.J.S.A. 40A:10-6(e) (providing that local governmental unit may establish insurance fund for its negligence or that of those “authorized to perform any act or services, but not including an independent contractor”); N.J.S.A. 40A: 14-38 (providing that fire district may purchase insurance for negligence of its fire volunteers “authorized to perform any act or service, but not including an independent contractor”); N.J.S.A. 42:lA-53(a)(5) (providing, under Uniform Partnership Act, N.J.S.A 42:1A-1 to -56, that foreign limited liability partnership engaged in selling-through independent contractors is not engaged in transacting business in New Jersey sufficient to trigger qualification requirements); N.J.S.A 43:21-19(i)(7)(Z) (exempting from definition of “employment” under unemployment compensation scheme “outside travel agent, who acts as an independent contractor”); N.J.S.A. 59:1-3 (specifically excluding, for purposes of Tort Claims Act, N.J.S.A. 59:1-1 to 59:12-3, independent contractor from defined term “employee”).

Also, when it has deemed it appropriate, the Legislature has specifically defined the term “independent contractor” without regard to any concept of employment. See N.J.SA App. A:9-79, A9-80, A9-82, A9-83, A:9-84 (eff. Sept. 15,2007) (comprehensively defining, for domestic security purposes, “[i]ndependent contractor” as “a person, firm, company or organization which enters into a contract to work within, supply or deliver materials to a designated facility [defined, by N.J.S.A. 13:1K-21, as a ‘building, equipment, and contiguous area’] and whose employees have physical access to a designated facility”).

In other instances and in a wide variety of contexts, the Legislature has used the term “independent contractor” without any particular definition, further acknowledging both its meaning separate and apart from, and its differences with, the term “employee.” See, e.g., N.J.S.A 2A:53A-7 (immunity from liability for negligence); N.J.S.A 2C:20-ll(a)(4) (definitions of shoplifting); N.J.SA 2C:21-6.1(a)(l) (definitions relative to scanning devices, etc.); N.J.S.A. 4:4-20.3(r) (definitions under Commercial Feed Law); N.J.S.A. 13:12-22 (retention of legal and administrative help by Morris Canal); N.J.S.A. 14A:13-15(b) (notice of business activities report by foreign business corporations); N.J.SA. 17-.47A-2 (definitions under Risk Retention Act, N.J.S.A 17:47A-1 to -12); N.J.S.A 17B:30B-12(i)(l) (fraudulent viatical settlements); N.J.S.A. 27:7-11 (maintenance of state highways); N.J.SA. 27:7-21 (powers of commissioner to acquire, construct, and maintain state highways); N.J.S.A 30:4-98(0 (authorizing State Board of Human Services to act as independent contractor using “the labor of ... inmates ... within its jurisdiction”); N.J.SA. 30:4D-17.1 (suspension or disqualification of Medicaid providers); N.J.S.A. 30:13-16 (review of Medicaid recipient by independent contractor); N.J.SA 32:8-3(g) (post-employment restriction on former members of Delaware River Joint Toll Bridge Commission extends to independent contractor status); N.J.S.A. 32:23-26 (forbidding unlicensed independent contractors from loading or unloading waterborne freight); N.J.S.A. 34:6-136.2(d) (defining, for purposes of Home Work Law, N.J.S.A. 34:6-120 to - 136.23, “employer” to “mean[ ] any person, including any independent contractor, who, directly or indirectly or through any employee, agent, independent contractor, subcontractor, or any other person” distributes, delivers, or sells “materials or articles manufactured within this State in a home”); N.J.S.A. 34:6-136.7(c) (barring independent contractors from permits under Home Work Law); N.J.SA 34:6-136.11 (requiring records of transactions with independent contractor); N.J.S.A 39:2A-32 (requiring fingerprints and criminal history checks of independent contractors working on Motor Vehicle Commission premises); N.J.S.A 39:4-50 (immunizing independent contractors retained by court in driving while intoxicated matters); N.J.S.A 42:1A-I0(c)(3)(b) (rebutting partnership presumption of providing services as independent contractor); N.J.SA 45:7-65.3(a)(2) (prohibiting solicitation of mortuary services by independent contractors at eldercare facilities); N.J.SA 45:17A-20 (defining, for purposes of Charitable Registration and Investigation Act, N.J.SA 45:17A-18 to -40, “[e]ommercial co-venturer” to include independent contractor); N.J.SA 48:3-56(f)(l) (requiring board of public utilities to hire independent contractor to perform audits of electric public utilities); N.J.SA 48:3-58(k)(l) (requiring board of public utilities to hire independent contractor to perform audits of gas public utilities); N.J.S.A. 52:14B-4(f) and (g) (allowing director of Office of Administrative Law to assign independent contractor to conduct public hearing); N.J.SA 52:18A-214 (authorizing Departments of the Treasury and State to contract with independent contractors for restoration, repair, maintenance, and operation of Trenton War Memorial); N.J.SA 52:27EE-36 and -43 (exempting, under Public Advocate Restoration Act of 2005, N.J.S.A 52:27EE-1 to -85, independent contractors providing mental health or developmentally disabled advocacy from Tort Claims Act immunity); N.J.S.A. 52:32-33(a) (defining, for purposes of New Jersey Prompt Payment Act, N.J.S.A. 52:32-32 to -39, “[b]usiness concern” to include “independent contraetors[ ] providing goods or services directly to a using agency or to a designated third party and operating pursuant to a State contract”).

The brute force of those disparate statutory provisions is clear: the Legislature can and repeatedly does set forth when it wishes its reach to cover independent contractors and when it does not.

In that context, CEPA is illustrative of how the Legislature acts when it does not wish to equate “independent contractors” with “employees.” When the Legislature has chosen to eliminate any distinctions between “employees” and “independent contractors” it has displayed no reticence or difficulty in doing so. Yet, it cannot be disputed that CEPA protects employees and only employees. Against that backdrop, any extension of CEPA’s reach is an unwarranted intrusion into the Legislature’s realm.

In the end, the majority’s interpretation of CEPA’s definition of an “employee” stretches that definition to an unrecognizable — and ultimately meaningless — shape. Thus, as a matter of statutory construction, CEPA should be interpreted in a manner true to its legislative origins: as the Conscientious Employee Protection Act. Any further expansion of its reach properly belongs to the Legislature.

II.

Even if one accepts the majority’s interpretation of CEPA’s reach,³ D’Annunzio is emblematic of how the majority’s construct goes badly astray. In this ease, D’Annunzio, for his own purposes, negotiated with Prudential to provide certain services in exchange for a contractually agreed on hourly rate; he created a professional corporation to enter into that contract with Prudential; and he in fact entered into a written contract with Prudential. Section II of that contract, titled “Legal Relationship between the Medical Director and Prudential,” plainly states as follows:

The relationship between Prudential and [D’Annunzio] is that of independent contractor. The Medical Director will maintain his own private practice and provide Medical Director services on a part time basis. Prudential makes no representations as to the volume of referrals and [D’Annunzio] acknowledges [that] this agreement is not exclusive. None of the provisions of this agreement are intended to create or be construed as creating any agency, partnership, joint venture or employer-employee relationship.

As an independent contractor, [D’Annunzio] will have the sole responsibility for the payment of all self employment and applicable federal[,] state and local taxes. [Emphasis supplied.]

Despite that clear language, D’Annunzio now claims that, because he was provided stationery on which to write, because he was told the format in which reports were to be prepared, and because he was asked to do what he contracted in writing to do— that Prudential would provide him “adequate working space and necessary resources” and that he would “maintain office hours at the Prudential PIP claims office[,] Monmouth Executive Center, 8 Paragon Way Bldg. 3[,] Freehold, N.J 07728 from 8 am until 12 pm (Monday through Friday)” — and even though his contract with Prudential required that he maintain a separate, viable private practice, somehow Prudential exercised sufficient “control and direction” over him to invoke CEPA’s protections. That claim is legal gibberish.

The contract between D’Annunzio and Prudential could not have been clearer. D’Annunzio contracted to perform professional services on a part-time basis for Prudential. For his own economic purposes, D’Annunzio insisted on Prudential contracting for Ms services through his professional corporation. By his own design, then, D’Annunzio was an employee of Ms own professional corporation, while his professional corporation was an independent contractor to Prudential. That contract made clear that the relationship between the parties was one of an independent contractor (D’Annunzio, through Ms professional corporation) providing services to Prudential. Yet, when it suits his purpose in seeking to invoke CEPA’s protections, D’Annunzio readily renounces all that he bargained for in exchange for a chance at a recovery under CEPA.

CEPA represents all of the salutary goals and aspirations the majority eloquently describes. It is, as the majority notes, “remedial social legislation designed to promote two complimentary public purposes: to protect and [thereby] encourage employees to report illegal or unethical workplace activities[,] and to discourage public and private sector employers from engaging in such conduct.” Ante, at 119, 927 A.2d at 118 (citations and internal quotation marks omitted). However, when we pervert its intendment solely to extend its reach to one who proudly wears the mantle of an independent contractor when it is convement to him — only to shed it for the greener pastures of a hoped-for litigation recovery — we devalue CEPA’s worth and cheapen its meanmg. Prudential negotiated its contract with D’Annunzio in good faith, and Prudential abided by all of the contract’s terms, including its termination on notice provisions. In those circumstances, D’Annunzio should be required to abide by the terms of the contract — the basis of the bargain — he knowingly, intelligently, and intentionally negotiated, not rewarded with a breath of renewed life to tMs rightly defunct claim.

III.

For the foregoing reasons, I would reverse the judgment of the Appellate Division and reinstate the judgment of the trial court that dismissed D’Annunzio’s complaint. Therefore, I respectfully dissent.

For Affirmance as Modified/Remandment — Chief Justice ZAZZALI, and Justices LONG, LaVECCHIA, ALBIN and WALLACE — 5.

For reversal — Justice RIVERA-SOTO — 1.

1 Neither the "premature stage of these proceedings” nor the "truncation of discovery” provides a basis for the relief afforded. This matter was presented to the trial court on Prudential’s motion for summary judgment on the sole issue of whether D’Annunzio qualified as an "employee" under CEPA. Regardless of the amount of discovery undertaken, there has been no claim that there were facts which were not presented and which, with additional discovery, could have been presented. More to the point, there is no showing in this record — and neither party has argued — that there are any material facts in dispute, a condition precedent to the overruling of a grant of summary judgment based on the factual record. See Parks v. Rogers, 176 N.J. 491, 502, 825 A.2d 1128 (2003) (explaining, in summary judgment context, that " '[i]t was not the court’s function to weigh the evidence and determine the outcome but only to decide if a material dispute of fact existed’ " (quoting Gilhooley v. County of Union, 164 N.J. 533, 545, 753 A.2d 1137 (2000))). Thus, unless the majority can sustain that, as a matter of law, the trial court erred — and the majority cannot — the trial court’s judgment should be affirmed. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378, 658 A.2d 1230 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.”).

2 Pukowsky v. Caruso, 312 N.J.Super. 171, 711 A.2d 398 (App.Div.1998).

3 If the designation "independent contractor” is nothing more than a sham designed to avoid the proper incidents of an employment relationship, then logic demands that a label should not foreclose further inquiry. That, however, is not the case here. As D'Annunzio was forced to admit, there was true substance to his independent contractor relationship with Prudential; otherwise, D'Annunzio's design to create a tax dodge by establishing his professional corporation, having that corporation contract with Prudential, and his service as an employee of that professional corporation would have been a fraud. In those circumstances, the judicial inquiry should respect the parties' bargain, and should not engage in metaphysical determinations of the minutiae of just how independent the contractor was.