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CARNEY v. DEXTER SHOE CO.

December 13, 1988

GEORGE J. CARNEY, Plaintiff
v.
DEXTER SHOE COMPANY, Defendant



The opinion of the court was delivered by: LECHNER

 In this action, plaintiff George J. Carney ("Carney") alleges that the defendant Dexter Shoe Company ("Dexter") is liable for violating the following in connection with his termination on November 13, 1985: the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. ยง 621 et seq., (First Count of Plaintiff's Complaint); the New Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. 10:5-12(a), (Second Count); the clear mandate of the public policy of the State of New Jersey (Third Count); an implied promise of job security, good faith and fair dealing (Fourth Count); and an express and implied contract of employment (Fifth Count). Carney also alleges that Dexter intentionally inflicted emotional distress upon him (Sixth Count). Carney seeks compensatory and punitive damages.

 Now before the court is Dexter's motion for summary judgment. It is Dexter's position that Carney was an independent sales representative, not a Dexter employee, and thus his relationship with Dexter is not governed by ADEA or NJLAD and further that the relationship was for an indefinite duration and thus terminable at will by either party.

 Facts

 Carney is currently sixty years old and has been a resident of New Jersey since 1975. Prior to the termination of the working relationship, Carney had worked for Dexter in various capacities for a period of nineteen and one-half years. In his most recent position, Carney has described himself as a "self-employed rep[resentative]" of Dexter (T:21-19). *fn1"

 Dexter is a corporation chartered in the State of Maine *fn2" and, according to plaintiff's Complaint, is a corporation with its principal place of business in the state of Massachusetts. Dexter is engaged in the manufacture and sale of shoes.

 Carney joined Dexter in 1966, at age thirty-eight, as an in-stock shoe salesman. His territory included New Jersey and Southern Connecticut. As a shoe salesman at this time, Carney's compensation was based strictly on commission as a percentage of sales; no salary or bonus was paid. Within a few months, Carney was given a new position with Dexter in Boston where, as an executive salesman, he sold to approximately forty national accounts, including Sears Roebuck and other large department stores. In this position, which Carney held for nine and one-half years until 1975 (when Dexter eliminated the division), he was paid a yearly salary and usually received a bonus. In 1975, Carney reassumed his duties as a Dexter salesman responsible for the Northern New Jersey and Long Island territory. Once again, Carney was on a commission only based income.

 While Dexter claims Carney was barely getting by in his various positions, Carney claims he was so successful that he took a territory yielding a commission income to his predecessor of $ 33,000 in 1975 and increased the business to the point where he was earning $ 100,000 as early as 1980. Carney also alleges that, in addition to his work as a salesman, he made other contributions as well, most notably in the research and design area. Over ten years ago, Carney alleges he helped develop the "Suburban," a particularly well-selling shoe line for Dexter. It is not clear whether Carney received any compensation for such work over and above the extent to which he was paid commissions as a salesman.

 As an in-stock salesman, Carney was free to terminate his employment with Dexter at any time although he stated he would have to give up certain earned commissions (T2:28-10 to 28-14). Carney was free to establish his own work agenda and to visit accounts as he saw fit; Dexter did not require Carney to work any specific hours during the day or to make any minimum number of customer calls per day (T2:7-21). Carney was not provided with an office nor was he reimbursed for the costs incurred in furnishing or staffing one (T2:12-22 to 13-33). Carney received no schooling, training or formal direction from Dexter on how to sell their products (T:19-25 to 20-11).

 Carney was not provided with a company car, nor was he reimbursed for travel or other related expenses; he fully funded all of his expenses (T:39-23 to 40-4; T2:5-15); Carney received no reimbursement for attending annual sales meetings (T2:5-15). Carney paid all of the travel and entertainment expenses which he incurred doing Dexter related business (T:40-6).

 Dexter did not provide Carney with any financial benefits such as a pension, insurance or profit sharing (T2:5-7 to 5-18); Carney did not receive sick pay or paid vacations (T2:8-7); Carney was responsible for paying his own social security and income tax; Dexter did not automatically compute and withhold any amount for any purpose (T2:6-2 to 7-2).

 Carney states, however, that Dexter exercised significant control over his activities. For example, Dexter precluded Carney from selling products other than those manufactured by Dexter. (Carney Affidavit at para. 4; T2:13-25). During his years doing in-stock sales work, Carney reported to Dexter headquarters almost daily by phone (although he set his own daily agenda) and was required to submit in writing weekly reports on forms provided by Dexter. (Carney Affidavit at para. 5; T2:22-4 to 24-20). In addition, Carney was subject to various other guidelines (most of which were procedural) set forth in the Dexter Sales Manual. (Carney Affidavit at para. 5).

 Dexter exercised control over the types of shoes which Carney could sell, the delivery dates for shipping supplies to customers and the timing of when Carney could open new accounts. (Carney Affidavit at para. 6; T2:18-10 to 21-24; T2:103-1 to 106-3). As evidence of the extent to which he was dependent upon Dexter for income, Carney claims he was restricted from engaging in other enterprises and was precluded (under the terms of Dexter's Sales Manual) from selling Dexter shoes other than to customers who met certain Dexter criteria, such as minimum purchase amounts of fifty pairs of shoes. Carney does not claim there was an unreasonably limited number of potential customers to whom he could make sales calls.

 As a Dexter salesman, Carney claims he was prevented from taking vacations except during short periods of time when the selling season was over, (Carney Affidavit para. 6; T2:8-9), however, it was not necessary that Carney receive prior approval from Dexter prior to taking a vacation. (T2:8-17 to 9-23). Carney was also required to contribute monthly expenses of between $ 100 to $ 250 for use of a showroom which he had little opportunity to use. Twice a year Dexter would provide Carney with a performance analysis, which he would discuss with one or two Dexter sales managers. (Carney Affidavit para. 7; T:77-80).

 Despite what he regards as the exercise of such control over his sales activities, or perhaps because of it, Carney felt a personal attachment to Dexter and thought Dexter felt similarly. At one point, Carney claims he passed up an opportunity to become a partial owner in an import firm, having been led to believe by Dexter that his future was secure there. (T:56-19 to 69-8; T2:25-23 to 31-3). Carney claims that he was led to believe throughout the course of his "employment" that, so long as he continued to use his best efforts as a salesman, he would have a job for life at Dexter. (Carney Affidavit para. 8).

 Since Carney was terminated, he claims he has been unable to enjoy a normal night's sleep. He developed persistent stys in both eyes which he associates with the termination. He also suffers from embarrassment, social difficulties and emotional outbursts related to his firing. Finally, his marital relations have suffered to the extent that his wife would like to see him seek professional help. (Carney Affidavit para. 11; T3:28-8 to 38-2).

 After conducting discovery, Dexter moves for summary judgment on all federal and state law claims. Dexter argues it is entitled to summary judgment because, as set forth above, (1) Carney was an independent sales representative and not an employee of Dexter's and thus his relationship with Dexter is not governed by ADEA or NJLAD and (2) the relationship was for an indefinite duration and thus terminable at will by either party.

 Discussion

 A. Summary Judgment Standard

 To prevail on a motion for summary judgment, the moving party must establish "there is no genuine issue as to any material fact and that [it] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The district court's task in deciding the motion is not to "determine the truth of the matter but to determine whether there is a genuine [factual] issue" which can only be properly resolved by a trier of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). All evidence submitted must be viewed in a light most favorable to the party opposing the motion. See Matsushita Elec. Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).

 Although the summary judgment hurdle is a difficult one to overcome, it is by no means insurmountable. As the Supreme Court has stated, once the party seeking summary judgment has pointed out to the court the absence of a fact issue,

 
its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. . . . In the language of the Rule, the, non-moving party must come forward with 'specific facts showing that there is a genuine issue for trial.' . . . Where the record taken as a whole could not lead a rational ...

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