KMC Partner Michael L. Collins and Counsel Krishna Jhaveri successfully defended Sussex County with the Appellate Division recently issuing an opinion upholding the dismissal of a former County Counsel’s CEPA claims.
After Plaintiff was not appointed to a second statutory three-year term as County Counsel, Plaintiff sued alleging adverse employment actions and retaliation in violation of Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19-1 et seq.
In a victory for KMC, the Appellate Division affirmed the dismissal of the lawsuit, crediting the County’s argument that the former County Counsel could not establish an employee-employer relationship as required to assert a CEPA claim.
To make this argument at the trial court and then in the Appellate Division, KMC worked with the County to provide the Court with public records that established the facts surrounding the former County Counsel’s employment, including that he was hired pursuant to an RFP that sought a part-time county counsel that would not be an employee, and that the former County Counsel was compensated by payments to his law firm and not wages.
To evaluate whether an individual is an employee for CEPA purposes, the New Jersey courts apply the Pukowsky test containing the following factors:
(1) the employer’s right to control the means and manner of the worker’s performance; (2) the kind of occupation—supervised or unsupervised; (3) skill; (4) who furnishes the equipment and workplace; (5) the length of time in which the individual has worked; (6) the method of payment; (7) the manner of termination of the work relationship; (8) whether there is annual leave; (9) whether the work is an integral part of the business of the “employer;” (10) whether the worker accrues retirement benefits; (11) whether the “employer” pays social security taxes; and (12) the intention of the parties.
Both the trial court and the Appellate Division evaluated these factors against the terms of Plaintiff’s employment as the Sussex County Counsel.
For the First, Second, and Third Factors, the Appellate Court agreed with the County that Plaintiff had performed “unsupervised” work “that required the use of his independent professional judgment, skill, and compliance with relevant professional standards for attorneys” and “[d]efendants did not have the right to control the means and manner of [his] performance.” The Appellate Court noted that despite Plaintiff’s argument that he was required to work “established office hours” in the County’s administrative building, Plaintiff also certified that he typically spent his mornings at his private law office, spends afternoons at the County office, and returns to his private law office in the evening. For Factor Three, Plaintiff’s skill and experience as an attorney were undisputed as well as Plaintiff’s obligation to exercise independent judgment as an attorney in accordance with the Rules of Professional Conduct.
As for who furnished Plaintiff’s workspace under the Fourth Factor, the fact the County provided Plaintiff “with office space and equipment to be used in his capacity as County Counsel titled this factor in favor of finding an employer-employee relationship.” Under Factor Five and Factor Seven—addressing employment length and the manner of his termination—the Appellate Court stated that Plaintiff’s term as County counsel was statutorily limited to three years determined Plaintiff’s term expired; he was not “fired” early. Under Factor Six, regarding method of payment, because the County made checks out to Plaintiff’s law firm and because Plaintiff directly deposited those checks into his firm’s operating account, the Appellate Court agreed that this weighed in favor of finding against an employer-employee relationship. Id. Factors Eight, Ten, and Eleven—which deal with employer benefits and payment of social security taxes—were not viewed in Plaintiff’s favor because he was not afforded annual leave by the County, did not accrue retirement benefits, and the County did not pay his social security taxes as employers typically do.
The Appellate Court disagreed with the trial court on Factor nine. It reasoned that while it was not Plaintiff’s role as counsel to “govern” it was “fair to conclude he played an important and possibly integral role in enabling those who governed to govern.”
Finally, for Factor Twelve that looks to determine the parties’ intentions, the Appellate Court considered the County’s job description for the counsel position which “made clear” the County was hiring on a “part-time” basis and that a counsel would “not be hired as an employee or receive a salary or benefits.” Id. The Appellate Court noted that how the position is described in a Request for Proposal, which would be read by all those applying for the position, “can provide critical insight into the parties’ intentions” and did so here. Id. Weighing the twelve Pukowsky Factors qualitatively rather than quantitatively the Appellate Court agreed with KMC that no employee-employer relationship existed for the purposes of CEPA and, thus, Plaintiff could not maintain claims under CEPA.
The panel also analyzed whether Plaintiff had suffered an adverse employment action through the non-renewal of his statutory term as County Counsel. The plaintiff argued that failure to renew a contract is in and of itself a CEPA retaliatory action. “The problem” with Plaintiff’s argument, the Appellate Court pointed out, was “that this case does not involve the renewal of a contract; it involves the expiration of a term of office set by the Legislature.” The Appellate Court thus found that Plaintiff, “who was subject to a statutory term of office, failed to allege an adverse employment action under CEPA.” Therefore, even if Plaintiff had established the employer-employee relationship, he still could not sustain his CEPA claim because the expiration of his statutory term of office does not constitute an adverse employment action.
KMC provides representation to public and private sector employers as well as individual employees in labor matters arising under the Conscientious Employee Protection Act and various other labor laws. If you require representation in a labor matter, please contact Partner Michael L. Collins, Esq. at (732) 546-3670 or mcollins@kingmoench.com or Counsel Krishna R. Jhaveri, Esq. at (732) 546-3670 or kjhaveri@kingmoench.com.
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