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Trauma Nurses Inc. v. Board of Review

Decided: April 20, 1990.


On appeal from New Jersey Department of Labor.

Baime and Keefe. Baime, J.A.D.


This is an appeal from the final determination of the Board of Review, reversing the decision of the Appeal Tribunal and holding that claimant Carolyn Douglas was an employee of appellant Trauma Nurses, Inc. (TNI) and was thus statutorily eligible for State Plan Disability benefits. Appellant claims that Douglas was an independent contractor and that the Board's decision to the contrary is wholly unsupported by the undisputed evidence present in the record. We agree and reverse.

The salient facts are not in dispute. TNI is in the business of supplying hospitals with nurses on a temporary basis. In essence, TNI acts as an employment broker, matching nursing professionals with hospitals and other health care institutions seeking to supplement their staffs on a temporary, short-term basis. Due to the ongoing acute shortage of nurses in New Jersey, many hospitals utilize registries and broker services to supplement permanently employed personnel. At present, approximately 180 nurses are under contract with TNI. TNI

primarily brokers the services of registered nurses, although it occasionally acts for licensed practical nurses such as Douglas.

The record reflects that TNI recruits its nurses through advertisements in professional journals and newspapers. Prior to entering contracts with TNI, nurses are screened to insure that they are appropriately qualified. Each nurse must provide TNI with a resume, clinical references, proof of malpractice insurance, health and disability insurance coverage, a valid CPR certification and a nursing license. All requisite insurance policies must be obtained and paid for by the nurses. In addition, the applicant must complete both a skills checklist, as required by the Joint Commission for Accreditation of Hospitals, and a physical assessment test, demonstrating the nurse's qualifications to meet hospital staffing requirements. The skills checklist is later used by TNI to match the nurse's qualifications with the personnel needs of particular hospitals.

At the completion of the application process, each nurse enters into a written agreement with TNI. Under the terms of the agreement, the nurse is engaged as an "independent professional" and TNI is given no right "to exercise any control or direction" over his or her activities. The contract states that the nurse is subject to whatever policies and practices are mandated by the hospital or institution in which he or she is placed and TNI retains no right to dictate the manner in which he or she conducts his or her activities, subject to professional standards which are to be maintained by continuing education throughout the term of the agreement. TNI provides a liaison to the hospital, but it has no supervisory responsibility over the nurse. Instead, it assists the hospital in setting staffing levels, obtains additional nursing support to meet emergent needs and mediates disputes where the hospital cannot resolve the problem directly with the nurse.

The contract is for a period of one year, with optional yearly renewals. It may be terminated, however, if for some reason, the nurse fails to maintain appropriate insurance and professional

certification and licenses. The record discloses that TNI has rarely terminated a contract, although nurses often elect to stop utilizing its services.

Each nurse negotiates with TNI to set an individual hourly rate, which varies depending upon his or her experience and qualifications. Nurses notify TNI on a weekly basis of the number of shifts completed. Each is paid according to the rates set forth in his or her contract, within 14 days of submission of this information. This procedure is designed to eliminate extra bookkeeping for hospitals, because they send one check to TNI representing compensation for all nurses who worked during a given time period. After subtracting its administrative and placement charges from the lump sum paid by the hospitals, TNI acts as a conduit to forward monies owed to the nurses by the hospitals. Although the Attorney General claims that TNI retains 40 to 50% of the amounts received, the record does not support this contention, which is apparently based on different yearly rates and payments and is thus not accurate.

Perhaps the most telling point in light of the issues raised relates to TNI's scheduling procedures. We stress that under the agreement the nurse alone decides whether to work, when to work, what shifts he or she wishes to work and his or her working hours. TNI retains no right to decide whether a nurse will work at all and, if he or she does, when, what shifts and what working hours. Nurses inform TNI of the hospitals and shifts that they are willing to work. TNI does not set a minimum or maximum number of shifts to be worked in a given period. That is left to the sole discretion of the nurses. TNI merely mails blank scheduling forms to the nurses each month to be completed for the following month and returned. After matching the nurses' proposed schedules with the personnel needs of the hospitals, TNI mails out a copy of the month's final schedule for each nurse and confirms each shift on the calendar. Once the schedule is confirmed, nurses are required to work each scheduled shift or to make arrangements on their

own with other qualified nurse contractors for coverage of any shifts that they are unable to work, subject to TNI's approval. Should a nurse fail to complete a shift or obtain a ...

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