LAW OFFICE OF GERARD C. VINCE, LLC VS. BOARD OF REVIEW (DEPARTMENT OF LABOR)

NOT FOR PUBLICATION WITHOUT THE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-5441-17T2
LAW OFFICE OF
GERARD C. VINCE,
LLC,
Appellant,
v.
BOARD OF REVIEW,
DEPARTMENT OF LABOR,
and DARLA J. DIMATTEO,
Respondents.
____________________________
Argued May 21, 2019 – Decided September 3, 2019
Before Judges Suter and Geiger.
On appeal from the Board of Review, Department of
Labor, Docket No. 145,463.
Gerard C. Vince, II argued the cause for pro se
appellant.
Daniel Pierre, Deputy Attorney General, argued the
cause for respondent Board of Review (Gurbir S.
Grewal, Attorney General, attorney; Melissa Dutton
Schaffer, Assistant Attorney General, of counsel;
Daniel Pierre, on the brief).
Respondent Darla J. DiMatteo has not filed a brief.
PER CURIAM
The Law Office of Gerard C. Vince, LLC (law firm), appeals from a
decision of the Department of Labor and Workforce Development's Board of
Review (Board). The Board affirmed a finding that claimant Darla J. DiMatteo,
a certified paralegal, was an employee—and not an independent contractor—of
the law firm when her services were terminated. As an employee, she was
entitled to unemployment compensation benefits. We reverse the Board's
decision because there was substantial credible evidence that she was an
independent contractor and not an employee of the law firm.
DiMatteo filed a claim for unemployment benefits in November 2017 after
the law firm terminated her services. She had been hired by the law firm to
integrate its files into a web-based computer software system called "LEAP."
The law firm was licensed to use the software system, which could be accessed
through the web using any computer, not just those at the law firm. The law
firm would identify the files to be integrated into LEAP, but did not instruct
DiMatteo on how to perform the actual integration of the files into the LEAP
system.
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The law firm confirmed in its Consulting Paralegal Understanding (CPU)
with DiMatteo that she was "being contracted as a consulting paralegal." In the
CPU, the law firm confirmed with her that this was a "temporary consultancy"
for three to six months to be paid weekly at twenty dollars per hour based on
invoices that DiMatteo would present to the law firm. It would not pay
"telephone, computer expenses, insurance, travel, equipment leases unless
otherwise agreed to in writing." DiMatteo was required to pay taxes at the end
of the year including "any self-employment tax, workers' compensation or the
like . . . ." The CPU stated, "you agree by acting as a consultant that you are an
independent contractor and as such are not an employee and shall not enter into
any contract or agreement on behalf of the company. You understand that you
are not subject to receive unemployment or other employee related benefits."
One week before her services were terminated, DiMatteo signed a "consultation
confirmation" form where she acknowledged she would receive a 1099 tax form
from the law firm and then pay all taxes relative to her "consultancy."
DiMatteo integrated files into the LEAP system from May 9, 2017 to
October 13, 2017, when her services were terminated. She filed for
unemployment. In March 2018, the Department's Deputy found she was eligible
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3
for benefits. The law firm appealed to the Appeal Tribunal. A hearing was
conducted in April 2018 in which DiMatteo did not participate.
The Appeal Tribunal held that DiMatteo was entitled to unemployment
benefits under N.J.S.A. 43:21-19(i)(6), as an employee of the law firm. It found
that the CPU was not determinative of whether the law firm was an employer
under the unemployment law. Instead, the Appeal Tribunal considered
DiMatteo's actual working relationship with the law firm. It found DiMatteo
reported once or twice a week to the law firm to download files, the LEAP
system was controlled by the law firm, and DiMatteo's job function was a
"requisite part of the claimant's duties as a [c]onsulting [p]aralegal." It found
the law firm "did not prevent [DiMatteo] from accepting work with other
employers." She used her own vehicle for transportation and there was no dress
code that she needed to follow.
Although DiMatteo was "free to make her own hours and days," the
Appeal Tribunal noted she was "required to report to her employer's work
location on a somewhat regular basis in order to perform at least a mandatory
portion of her job duties, specifically the downloading of business files into the
employer's software litigation program." It found she would not have been able
to do this "without access to the employer's software, which the employer
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4
controlled." It found DiMatteo was not "fully free from control of her work
service contract" because she was "required to drive to the employer's work
location in order to complete these mandatory tasks." The Appeal Tribunal,
concluded that the law firm did not prove DiMatteo was an independent
contractor.
The law firm appealed to the Board, which affirmed the Appeal Tribunal.
The Board supplemented the Appeal Tribunal's decision to address two parts of
the "ABC" test set forth in N.J.S.A. 43:21-19(i)(6). Under part "A", the Board
found "[a]lthough the claimant had some flexibility as to when and where the
work was performed, it was the employer who assigned specific tasks to the
claimant." Under part "B", the Board found that DiMatteo "was performing
paralegal work for a law firm," and she was an employee "as the work performed
by the claimant was essential to the services provided by that type of business."
Because the law firm did not satisfy either part A or B of the ABC test, the Board
did not analyze part C.
On appeal, the law firm argues that DiMatteo was an independent contract
consultant and not an employee. It asserts the Appeal Tribunal and Board made
certain findings that are not accurate. For instance, the law firm did not own the
LEAP software program; this was a web-based program the law firm could
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access. Also, it was DiMatteo who set the rate of her pay, not the law firm, and
she issued invoices to the law firm for payment. DiMatteo was not required to
work at the office. She came in once or twice a week, but could work on the
program remotely. She indicated to the law firm that she performed services for
other entities during the time she worked there. DiMatteo advertised her
services to the public. The law firm contends that because DiMatteo was a
certified paralegal, it had to exercise some level of control as required by the
Rules of Professional Conduct and by the Supreme Court in In re Opinion No.
24, 128 N.J. 114 (1992). However, it did not determine the pathway for her to
integrate the files into the LEAP system. The law firm argues the integration of
these files into LEAP was not essential to the services that it performed as a law
firm to its clients.
Our review of an agency's decision is limited. Brady v. Bd. of Review,
152 N.J. 197, 210 (1997) (citing Pub. Serv. Elec. v. N.J. Dep't of Envtl Prot.,
101 N.J. 95, 103 (1985)). "If the Board's factual findings are supported 'by
sufficient credible evidence, courts are obliged to accept them.'" Ibid. (quoting
Self v. Bd. of Review, 91 N.J. 453, 459 (1982)). We will not intervene unless
the Board's decision is "arbitrary, capricious, or unreasonable." Ibid.
A-5441-17T2
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The ABC test, referring to the three subparagraphs of N.J.S.A. 43:21-
19(i)(6), is used to determine if a person is an independent contractor for
purposes of the Unemployment Compensation Law (UCL), N.J.S.A. 43:21-1 to
-24.30. A person is presumed to be an employee unless the employer satisfies
each part of the ABC test. Hargrove v. Sleepy's, LLC, 220 N.J. 289, 305 (2015).
The statute provides as follows:
Services performed by an individual for remuneration
shall be deemed to be employment subject to this
chapter ([N.J.S.A. 43:21-1 to -71]) 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).]
In Hargrove, the Court explained the considerations under each part of the test.
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In order to satisfy part A of the "ABC" test, the
employer must show that it neither exercised control
over the worker, nor had the ability to exercise control
in terms of the completion of the work. In 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.
Part B of the statute requires the employer to
show that the services provided were "either outside the
usual course of the business . . . or that such service is
performed outside of all the places of business of the
enterprise." While the common law recognizes part B
as a factor to consider, it is not outcome determinative
within the confines of the "right to control" test.
Part C of the statute is also derived from the
common law. This part of the test "calls for an
enterprise that exists and can continue to exist
independently of and apart from the particular service
relationship. The enterprise must be one that is stable
and lasting—one that will survive the termination of the
relationship." Therefore, part C of the "ABC" test is
satisfied when an individual has a profession that will
plainly persist despite the termination of the challenged
relationship. When the relationship ends and the
individual joins "the ranks of the unemployed," this
element of the test is not satisfied.
[Id. at 305-06 (citations omitted).]
The terms of the contract are not controlling on the issue of whether t he
person is an independent contractor. Phila. Newspapers Inc. v. Bd. of Review,
397 N.J. Super. 309, 321-22 (App. Div. 2007). This is a "fact-sensitive" analysis
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where the substance, not the form of the relationship, is reviewed. Carpet
Remnant Warehouse, Inc. v. N.J. Dep't of Labor, 125 N.J. 567, 581-82 (1991).
We are constrained to reverse the Board's decision because there was
substantial credible evidence that the law firm satisfied the ABC test. Under
part A of the ABC test, there was no evidence the law firm exercised any more
control over DiMatteo as a paralegal than required by the Rules of Professional
Conduct. RPC 5.3. Other than selecting the files to be reviewed, there was no
evidence the law firm controlled or directed how she was to perform the work.
The Court's opinion in Opinion No. 24, 128 N.J. at 127-30, contemplated that a
paralegal could be an employee or an independent contractor.1 Under either
scenario, attorneys who delegated legal tasks to paralegals had to "maintain
direct relationships with their clients, supervise the paralegal's work and remain
responsible for the work product." Id. at 127. Therefore, some direction and
control was required by the Court for the paralegal to avoid allegations of
unauthorized practice of law and for the attorney to satisfy the RPCs. Under the
Board's analysis, a paralegal could never be an independent contractor because
of the control that an attorney must have to avoid a finding of unethical conduct.
1
In Hawkins v. Harris, 141 N.J. 207, 221 (1995), the Court described Opinion
No. 24 as "reminding attorneys of their responsibility to supervise paralegals,
whether employees or independent contractors."
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The CPU contemplated there would be an independent contractor
relationship. DiMatteo was to receive a 1099 and pay her own taxes. She did
not receive any specific training from the law firm. She set the rate of her pay,
advertised her services to the public and worked with other businesses while at
the law firm. The law firm did not require her to follow a dress code or to report
to the office for specific hours. It was not disputed that "she had no specific
hours" or "times that she had to be made available, she came and went . . . as
she pleased, and the hours all fluctuated." Therefore, the evidence showed that
the law firm did not control or direct her performance or how she performed her
work.
Under part B, it was not disputed that the work could have been performed
at any location. In fact, the record substantiates that some work was performed
off-site. The invoices show she was paid between $500 and $700 per week. At
twenty dollars per hour, her weekly hours significantly exceeded the one to two
days per week that she was in the office. Moreover, the work did not involve
specific clients or tasks typically performed by a paralegal, and could be
considered outside the usual course of business for the law firm.
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Part C was not analyzed by the Board, but there was evidence that
DiMatteo was a certified paralegal who worked for other businesses, came and
went as she pleased and advertised her services as a certified paralegal.
The Board found the law office did not satisfy the ABC test but did so
without full consideration of the undisputed evidence in the record. We are
constrained to reverse the Board's decision that DiMatteo was an employee
entitled to unemployment benefits having found unrebutted evidence that the
law firm satisfied the ABC test set forth in N.J.S.A. 43:21-19(i)(6).
Reversed.
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