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Data Informatics, Inc. v. AmeriSource Partners

March 14, 2001

DATA INFORMATICS, INC., PLAINTIFF-APPELLANT,
v.
AMERISOURCE PARTNERS, AMERISOURCE CONSULTING, INC., AND RATHNA BALAWAT, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-984-99.

Before Judges Baime, Wallace, Jr., and Carchman.

The opinion of the court was delivered by: Carchman, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 22, 2001

Plaintiff Data Informatics, Inc. brought a contract and tort action against defendants, AmeriSOURCE Partners, AmeriSOURCE Consulting, Inc. (collectively, "AmeriSOURCE") and Rathna Balawat (Balawat), (collectively, "defendants"), seeking damages allegedly resulting from AmeriSOURCE's placement of its contract computer programmer, Balawat, directly with plaintiff's client, Alliance Funding Company ("Alliance"), in contravention of the parties' agreements. AmeriSOURCE defended asserting that plaintiff was barred from proceeding on its claims for failure to comply with the licencing requirements of the Private Employment Agency Act,*fn1 N.J.S.A. 34:8-43 to -66 (the "Act"). The motion judge granted defendants' motions for summary judgment and dismissed the complaint. Plaintiff's appeal requires us to interpret the Act to determine whether plaintiff was an employment agency subject to its licensing requirements. We conclude that plaintiff is subject to those requirements, and that its failure to comply with the Act bars it from proceeding on its cause of action. Accordingly, we affirm the dismissal of its complaint.

The underlying facts presented by the parties on the motions for summary judgment were not in significant dispute. Plaintiff, a Delaware Corporation with its principal place of business in Delaware, maintains "an office" in New Jersey. AmeriSOURCE is a "computer consulting business" licensed and registered "as an employment agen[cy] and placement [firm which] . . . also do[es] project management." Both companies "engage[] in the business of placement of contract personnel within other entities" as computer services consultants. Balawat is a computer programmer who entered into a one-year minimum employment contract with AmeriSOURCE on January 16, 1997, agreeing to work as an on-site computer software consultant for AmeriSOURCE or any of its direct or indirect clients. That contract contained comprehensive non-competition clauses which prohibited Balawat's concurrent or subsequent employment with any of AmeriSOURCE's clients for a period of one year after leaving AmeriSOURCE's employ, unless AmeriSOURCE gave explicit written permission to the contrary.

On April 18, 1997, plaintiff's predecessor in contract and AmeriSOURCE entered into an agreement and work order for "the supply of [Balawat] for programming services to [plaintiff]," commencing at the "end-client," Alliance, on April 21, 1997. That is, "[p]laintiff . . . placed [AmeriSOURCE's] employee, Balawat, at Alliance." In conjunction with the work order, plaintiff and AmeriSOURCE also entered into a "Master Service Contract" whereby AmeriSOURCE agreed to supply plaintiff with employees to meet plaintiff's requirements. We quote relevant portions of the contract:

A SCOPE

A.1 General

[Plaintiff] agrees to hire contract personnel from AmeriSOURCE as and when required by [plaintiff], and AmeriSOURCE hereby agrees to provide contract personnel to [plaintiff] as and when required by [plaintiff].

B WORK ORDER & PROJECT

As and when contract personnel are actually assigned by AmeriSOURCE to work for [plaintiff] on specific projects, a WORK ORDER (as per enclosed format Appendix-A) shall be signed by both parties for every contract person. All such Work Orders shall be considered an integral part of this Agreement. Each Work Order shall constitute a Project.

C EMPLOYMENT STATUS OF CONTRACT PERSONNEL

All contract personnel employed or contracted by AmeriSOURCE and assigned to work for [plaintiff] shall at all times during the term of this contract and for the period specified in the restrictive covenants, be employees of AmeriSOURCE . . . and not of [plaintiff].

Notwithstanding any other provision in this Agreement, should AmeriSOURCE fail to ensure prompt payment of wages and fees to contract personnel then assigned to plaintiff, the latter may at its election contract directly with the said contract personnel for the continued performance of the services then being provided.

J RESTRICTIVE COVENANT

J.1 AmeriSOURCE agrees that, during the term of this Agreement or any renewal thereof and for a period of 1 (one) calendar year after the completion of the contracted services, AmeriSOURCE will not solicit, enter into agreement with or assign contract personnel to [plaintiff's] clients with whom [AmeriSOURCE's] contract personnel have been introduced by interview or placement, unless [plaintiff] grants the proper authorization in writing to waive this provision.

J.4 [The terms of J.1] shall survive the termination of the Agreement.

M OBLIGATIONS OF CONTRACT PERSONNEL

M.1 AmeriSOURCE shall be required to make all contract personnel assigned to [plaintiff's] projects by way of this Agreement, aware of the provisions of this Agreement which affect or obligate the contract personnel.

M.2 AmeriSOURCE shall be required to obtain in writing the contract personnel's acceptance of the provisions referred to in [M.1] above. This will be obtained in the form of a ...


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