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ROBERT T. WINZINGER, INC. v. MANAGEMENT RECRUITERS

August 17, 1987

Robert T. Winzinger, Inc., a New Jersey Corporation, Plaintiff,
v.
Management Recruiters Of Bucks County, Inc., a Pennsylvania Corporation, and Theodore M. Mashack, individually and trading as Management Recruiters of Bucks County, Defendants



The opinion of the court was delivered by: BROWN

 This declaratory judgment action was brought originally in state court and removed on the basis of diversity of citizenship. Plaintiff is a construction company located in Burlington County, New Jersey. Defendants are an employment agency and its president, and are located in Newtown, Pennsylvania.

 Defendant agency solicited plaintiff's business, advertising its services and specific persons for hire. A series of conversations then took place between the parties. Plaintiff denies that defendants ever mentioned that they charged a fee for their services. Subsequently, on June 2, 1986, defendants sent one William Forbes to plaintiff to interview for the position of estimator. He was eventually hired; defendants then requested payment of $ 11,000 for their services and threatened to sue. Instead, plaintiff filed this action, and received temporary restraints, pending a show cause hearing, enjoining defendants from enforcing the alleged contract in any judicial proceeding. The action was removed, the show cause hearing never took place, and the restraints have been dissolved.

 Plaintiff now moves for summary judgment, claiming that the alleged contract is void and unenforceable because defendants are not licensed as an employment agency in New Jersey.

 § 34:8-26 states in pertinent part:

 
No person shall either directly or indirectly open conduct or maintain an employment agency or perform any of the functions of an employment agency without first obtaining such license or licenses as is or are required by the provisions of this act.

 The provision further provides for civil penalties to be levied by the Attorney General against unlicensed agencies. § 34:8-26.1 gives the Attorney General power to conduct an investigation.

 Defendants argue that the statute applies only to employment agencies conducting business in New Jersey. They state that they do not have any employees, agents, representatives, officers, property, telephone listing, or advertising in New Jersey, but admit that they actively solicited plaintiff's business by phone and mail on numerous occasions.

 Defendants urge that the statute must be read in its entirety and point to other licensing provisions which refer to "the county" or "the municipality" where the agency is or will be located. They argue that the state's enforcement machinery would be overtaxed if the Attorney General had to conduct the various licensing procedures. There is no New Jersey case law construing the applicability of the statute to out-of-state agencies.

 Alternatively, defendants argue that if the statute does apply to foreign employment agencies, it is unconstitutional under the Commerce Clause of the United States Constitution.

 The State of New Jersey has intervened in defense of the constitutionality of the statute and its applicability to defendants, and in support of plaintiff's summary judgment motion. Our analysis is as follows: first, does the Employment Agency Act apply to foreign agencies like defendant; second, does the statute violate the Commerce Clause; and third, if the statute is constitutional does defendant's failure to adhere to it render the contract unenforceable?

 I. There is nothing in the language of the statute which precludes its application to out-of-state agencies. The definition in § 34:8-24 applies to the defendant agency, given the evidence which we have:

 
"Employment agency" means and includes the business of procuring or offering to procure help or employment, or the giving of information as to where help or employment may be procured, whether the business is conducted in a building or on the street or elsewhere; or the business of keeping an employment bureau, nurses' registry, or booking agency for procuring engagements for performing artists, or other agency or office for procuring work or employment for persons, where a fee or privilege is exacted, charged or received directly or indirectly for procuring or assisting or promising to procure employment, work, engagement or a situation of any kind, or for procuring or providing help or promising to provide help for any person, whether such fee is collected from the applicant for employment or the applicant for help, or whether the application for help or employment is made directly or indirectly by either the prospective employer or the prospective employee or by any person acting to secure either help or employment for the prospective employer or the prospective employee. "Employment agency" shall not include any temporary help service firm.

 The licensing requirement of § 34:8-26 is not ambiguous. The statute's emphasis is on the activity, not the location of the agency. In addition, out-of-state employment agencies form no part of the list of entities excluded from the statute in § 34:8-25. Moreover, even if it could be said that the act is ambiguous, any such ambiguity would have to be interpreted to accomplish the legislative purpose. Eagle Truck Transport, Inc. v. Board of Review, 29 N.J. 280, 289-290, 148 A.2d 822 (1959). Clearly the statute is a consumer protection statute. It would be incongruous for the Legislature to have desired the ...


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