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Mercury Staffing, Inc. v. Newark Extended Care Facility

October 12, 2007

MERCURY STAFFING, INC., PLAINTIFF-RESPONDENT,
v.
NEWARK EXTENDED CARE FACILITY, INC., DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L-6921-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 17, 2007

Before Judges Weissbard and S.L. Reisner.

Defendant Newark Extended Care Facility, Inc., appeals from a trial court judgment dated June 19, 2006, awarding plaintiff Mercury Staffing, Inc. $94,662.50 based on plaintiff's breach of contract claim. We affirm.

I.

These are the most pertinent facts. Mercury Staffing, Inc. (Mercury) is a nursing staffing agency that provides nurses, on a temporary basis, to nursing homes and other health care facilities. Mercury recruits nurses and enters into agreements with them to either act as Mercury's employees or as independent contractors. However, regardless of Mercury's contractual relationship with the nurses, Mercury enters into separate contracts with its clients to send nurses to work at the clients' facilities. On March 13, 2002, Mercury entered into a contract (staffing contract) to provide nurses to defendant Newark Extended Care Facility, Inc. (NECF). At some point, NECF hired eight nurses whom Mercury had sent to NECF as temporary staff and refused Mercury's demand for a commission under the staffing contract. This lawsuit followed.

Certain terms of the contract and the parties' performance under the contract were at issue in the trial. Based on the following contract language, Mercury contended that NECF had agreed not to "poach" or hire away as NECF employees the nurses Mercury sent to work there:

The client engages the company on a non-exclusive basis to provide the services of Registered Nurses (RN), Licensed Practical Nurses (LPN), and Nurses Aides for temporary services. All such staff are and shall remain independent contractors or employees of the company, and shall not be employed by the client.

Mercury also contended, based on paragraph seven of the contract, that if NECF hired any Mercury nurses, NECF would pay Mercury a commission consisting of twenty-five percent of the nurses' annualized compensation:

Employees will not be hired directly by the client before completion of one year of employment by the company at the client.

Fees for employees recruited by the client after one year will be as follows: Nurse: 25% of annual salary.

According to Mercury's president, Sandik Patel, this commission provision was standard in the industry. Patel testified that the agreement was drafted with his input and that the term "employee" meant "everybody who works for Mercury," regardless of whether Mercury paid the nurse as an independent contractor or as an employee. He also testified that "recruited" meant "adding to their staff. Anybody who worked for Mercury . . . at the client location, if they're hired directly and add[ed] to their staff, that's what recruiting means." He also testified that "employee" meant any "nurse that we placed at Newark."

NECF's administrator, Samuel Paneth, called as Mercury's witness, testified on direct examination, that he did not negotiate the contract. He clarified that he did not "negotiate the details, but before I sign . . . I, of course, look it over." On cross-examination, he contended that before he signed the contract, he spoke to Rajah Byas, the Mercury employee who signed the contract, and was told that the contract would not preclude NECF from hiring Mercury nurses as long as "they come by themselves on their own" ...


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