For remandment -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. Opposed -- None. The opinion of the court was delivered by Hall, J.
This declaratory judgment action seeks to strike down an occupational licensing statute, The Electrical Contractors Licensing Act of 1962 (N.J.S.A. 45:5A-1 et seq.; L. 1962, c. 162, as amended by L. 1962, c. 185), as unconstitutional on substantive due process and equal protection grounds under both the federal and state constitutions. The trial judge held the act to be valid, finding, with some misgivings, that shortcomings in the statute did not attain constitutional dimensions. The plaintiffs' appeal was certified on our own motion before argument in the Appellate Division. R.R. 1:10-1(a).
Plaintiffs are a trade association and two individuals, representing small electrical contracting businesses and those engaged in the field on a part-time basis. The individuals also sue as taxpayers. They claim to be adversely affected economically by the legislation and further broadly challenge it from the public interest standpoint. The essence of the due process attack is that, conceding the right of the state under the police power to license and assure the competency of electricians
because of danger to life and property from faulty electrical work, this statutory scheme is not designed for that purpose and bears no sufficient rational relation to the meeting of that evil. Conversely, they urge that the legislation is really intended only for the protection of the private interests of other segments of the electrical contracting industry, particularly to bring about a virtual monopoly in favor of those who were full-time electrical contractors at the time of the passage of the act. Their equal protection contentions also derive from the latter position as well as from features of the licensing scheme claimed to discriminate unlawfully in favor of contracting enterprises employing many electricians and against small businesses in which all electrical work is done by the owner or owners.
The defendant Board, which is the licensing and administrative agency created by the statute, supports the legislation on a claim of its "clear and obvious purpose * * * that electrical contractors shall be competent and qualified to perform and supervise the various phases of electrical contracting work," presumably from the public safety viewpoint, and that it provides a sufficiently direct and reasonable means to that end. It also suggested a further basis of validity at oral argument, although the point is not discussed in the briefs and was not urged below, in the fact that the statute substitutes a state-wide license for the burden of local ordinances of the same general type which previously existed in a number of municipalities requiring a separate examination and license, with substantial fees, before an electrical contractor could do any business in that municipality.
Plaintiffs' challenge is grounded essentially on the face of the act, and the defense similarly oriented, with heavy reliance on the presumption of validity. Practically no meaningful evidence was introduced on the vital questions involved.
The scheme of the act, as the statutory title indicates, is clearly to regulate the business of electrical contracting for hire and not to qualify and license the individual master or journeyman electricians who actually supervise or do electrical
work. Also, there is no requirement for governmental inspection of electrical work. "Electrical contractor" is defined as "* * * a person [which term includes individual, firm, corporation or other legal entity, N.J.S.A. 45:5A-2(e)] who engages in the business of contracting to install, erect, repair or alter electrical equipment for the generation, transmission or utilization of electrical energy * * *" N.J.S.A. 45:5A-2(d).
Licensure has a double aspect, spelled out in N.J.S.A. 45:5A-9(a). First, before the contracting business may be engaged in for hire, a "business permit" must be obtained by the owning entity -- whether that entity be an individual proprietor, a partnership or a corporation. This permit is issued by the Board for a two-year period. In addition, under N.J.S.A. 45:5A-19 the entity must post a $1,000 surety bond in favor of the State every two years, "conditioned on the faithful performance of the provisions of this act." The second aspect, and the prerequisite to the issuance of the business permit, is the securing of a "license" from the Board by some individual -- proprietor, partner, corporate officer or any employee of the owning entity -- "* * * who is or will be actively engaged in the business for which a business permit is sought * * *." The statute contains no definition of "actively engaged" and no requirement on its face that the licensed individual perform, supervise or inspect the electrical work done by the business. One license is sufficient to qualify the entity to receive a business permit and engage in business, no matter how many electrical workmen it may employ to do its work or what the degree of their competence may be. On the other hand, the owner of a small business who performs all or substantially all of the work himself must not only be licensed, but also must obtain a business permit before he may pursue his enterprise. This situation forms the principal basis of plaintiffs' claim of unlawful discrimination. As they point out, similar patterns have been held to violate equal protection in some cases. See, e.g., State ex rel. Winkler v. Benzenberg, 101 Wis. 172, 76 N.W. 345 (Sup. Ct. 1898).
In view of our present disposition of the case, however, we need not consider the contention at this time.
The passing of an examination is required to obtain a license, unless the applicant came within the provisions of the "grandfather clause." The statute directs that the examination "shall be so designed as to establish the competence and qualification of the applicant to perform and supervise the various phases of electrical contracting work," N.J.S.A. 45:5A-9(b), and its "scope * * * shall cover such matters as the provisions of nationally recognized electrical installation ...