Before Judges Stern, Kleiner and Kimmelman.
The opinion of the court was delivered by: Kimmelman, J.A.D.
 Submitted - May 19, 1998
On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.
In this sexual harassment action brought under the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, we focus on two issues: (1) whether plaintiff Joanne Pukowsky was an employee or an independent contractor in her relationship with defendant Joseph Caruso while working as a skating coach and teacher at his roller skating rink, defendant Parkway Skating Center (Parkway); and (2) whether an independent contractor, assuming that was the legal status of plaintiff, is protected by the LAD.
On defendants' motion pursuant to R. 4:37-2(b), the trial court entered a directed verdict against plaintiff at the close of her case on the ground that, accepting as true all evidence favoring her position, no reasonable jury could find that she was anything other than an independent contractor, to whom the protections of the LAD do not apply. Defendant Caruso's counterclaim, alleging slander and defamation of character, was voluntarily withdrawn without prejudice, pending the outcome of this appeal.
Plaintiff, who was an accomplished amateur roller skater, met Caruso in 1992. At the time, he was planning to open Parkway, and as his plans progressed, he approached plaintiff about managing the rink. She expressed interest, but in the meantime took a job as a part-time office manager at another business, occasionally meeting Caruso at his home to discuss the interior layout and color scheme of the proposed rink. Caruso eventually called plaintiff and told her that he had been in contact with his insurance carrier, which had informed him that it would not provide coverage for Parkway if plaintiff was named as manager, because she had no experience managing roller rinks. Instead, Caruso asked her to consider teaching skating classes at the rink. She was interested, but hesitated to commit to the idea.
However, after she was approached by eight people who were interested in taking lessons from her, plaintiff arranged to hold classes at Parkway when it opened. She decided to attempt to begin a career as a full-time skating coach. To finance this venture, she cashed in a $30,000 retirement account she had accumulated, receiving $23,000 after taxes and early withdrawal penalties. Plaintiff placed part of the money into a checking account in the name of "Free Skate Enterprises," through which she purchased the items she would need to teach skating classes, such as skating outfits, recording equipment, music tapes, and office supplies.
Parkway officially opened on March 23, 1993. Some months earlier, Caruso asked plaintiff to organize a grand opening ceremony. She agreed and arranged to have world-class skaters participate, created appropriate music tapes, and choreographed and organized a skating demonstration by Parkway Skating Club members, most of them children. The opening ceremony appears to have gone very well.
After the rink opened, plaintiff began giving private lessons to the eight students who had previously approached her, and she also joined with other instructors to teach group classes to young children. For the "tots'" classes, parents would pay club dues to Parkway, along with a fee of $1.00 per child, per lesson. The dues went to the rink, while the fees were paid to the rink manager, who would divide up the money among the instructors at the end of each class. For the private lessons, plaintiff was paid $12.00 per half hour. This fee was paid directly to plaintiff by her students, who paid an additional sum to Parkway for the use of the rink.
Over the course of several months, plaintiff's teaching efforts became increasingly successful, and her personal clientele increased from her original eight students to twenty-five students. By plaintiff's estimate, she was earning approximately $600 per week, and still had eighteen half-hour slots per week remaining open for new students. When plaintiff filed her federal income tax return on IRS Form 1040 for the 1993 calendar year, she reported her skating rink earnings on Schedule C, which clearly indicated in its caption that it pertained to "Profit or Loss From Business" for a "Sole Proprietorship." *fn1
In October 1993, skating instructors and rink employees began going out as a group for after-work drinks, and Caruso would occasionally join them. Thereafter, plaintiff developed a relationship with Caruso outside of work hours, but all we can gather from the record was that the relationship was somewhat ambivalent. Caruso was married and had a child. Plaintiff had a boyfriend. They did, however, occasionally have lunch or dinner together, and on two occasions between October 1993 and January 1994, plaintiff joined Caruso, a pilot who owned his own plane, on flights to Pennsylvania and the Chesapeake Bay area for lunch.
In late December 1993 or early January 1994, plaintiff mentioned to Caruso that he had never verbally thanked her for organizing the opening day ceremony. During the next few days, in an unrelated conversation, she also told him that no man had ever given her jewelry. Shortly thereafter, Caruso asked plaintiff to meet with him at a diner to discuss his plan to hire her to serve as rink manager on Monday nights. They met, and Caruso told plaintiff that the two full-time rink managers had threatened to resign if plaintiff was hired as a manager. After this conversation, Caruso handed plaintiff a bag containing a blue topaz/diamond bracelet and a card which read, "I never thanked you for the grand opening show and you said that no man has ever given you jewelry. You can't say either anymore."
At trial, plaintiff testified that she had not wanted the bracelet, and wore it only "out of professionalism." However, a friend of plaintiff's testified that she wore the bracelet "all the time," and was "very happy" about having received it. He said that she described Caruso as a "good friend."
A short time later, Caruso offered to give plaintiff a ring which matched the bracelet. She refused, but he told her that he did not want to leave the ring around where his wife might find it. He then left it in plaintiff's locker at the rink.
Soon after their meeting at the diner, Caruso approached plaintiff in the rink parking lot and asked her out on a date for the first time. Plaintiff refused. She had confided in a friend that Caruso was not her type. Thereafter, requests for plaintiff to join Caruso for drinks, dinner, and a trip to Las Vegas were also refused. Then, in late January or early February 1994, Caruso asked her to "see him one day a week." Plaintiff refused again, and testified that she was "insulted" by the proposition.
At about that time, plaintiff said she received a disturbing phone call from Caruso, in which he indicated that he knew she had a male visitor at her apartment. Plaintiff asked if he was following her, and Caruso said that he had been for two months. *fn2
Nevertheless, in March 1994 plaintiff accompanied Caruso to a jewelry store. There were two reasons for the trip: the first was that Caruso wished to use a charm that plaintiff wore as the model for a logo for Parkway, and the second was to have sized the ring that Caruso had given plaintiff, because she had told him that it did not fit properly. While at the jeweler's, they had the ring sized, and ...