On appeal from a Final Decision of the New Jersey Department of Labor and Workforce Development, Board of Review, Docket No. 79,637.
The opinion of the court was delivered by: Gilroy, J. A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Weissbard, Gilroy and Baxter.
Appellant, Philadelphia Newspapers, Inc. (PNI), appeals from the May 31, 2006, Final Decision of the Board of Review (Board) that confirmed the October 24, 2005, decision of the Appeal Tribunal, determining claimant Jerry Brooks eligible for unemployment benefits from May 29, 2005 to July 23, 2005. The issue presented on appeal is whether claimant was an independent contractor or an employee of PNI when claimant's contract as a home delivery newspaper person was terminated by PNI. Because we determine that PNI failed to prove that claimant was an independent contractor, as that exemption to employment is determined under the three prong standard of N.J.S.A. 43:21-19(i)(6)(A)(B)(C) (the ABC Test), we affirm.
PNI is the publisher of the Philadelphia Daily News and The Philadelphia Inquirer. In July 2003, PNI engaged claimant's services to deliver the two newspapers to PNI's home delivery customers along a designated delivery route in southern New Jersey. When initially engaged by PNI, and for each year thereafter, claimant was required to execute an "Independent Home Delivery Service Contractor Agreement" (Agreement), an eighteen-paragraph document prepared by PNI. The Agreement designated claimant as an "Independent Service Contractor" responsible for delivering various publications of PNI, including The Philadelphia Inquirer and the Philadelphia Daily News "in good condition and on a timely basis to certain of its own delivery subscribers . . . [and] to collect amounts owed to PNI by its subscribers and, on behalf of PNI, to solicit new subscriptions to The Inquirer and Daily News . . . ."
Paragraph 1A of the Agreement designated claimant as "a self-employed independent contractor and not an employee of PNI," who "was free to engage in any other business activities [claimant] desires (including services for other publications) so long as they do not interfere with the timely delivery of The Inquirer and the [p]eriodicals and [claimant's] performance of the terms of this Agreement . . . ." Pursuant to that same paragraph, claimant had "the right to operate [his] business as [he] chooses and shall engage [his] own sub-contractors or employees as [he] considers necessary or desirable . . . and [he] shall exercise the sole and exclusive management and or supervision of all such persons or entities."
Under Paragraph 1C, "[claimant] agrees to maintain at [his] own expense, levels of automobile and general liability insurance, as required by applicable laws, covering all vehicles used in the operation of [his] business and all of [his] operations and premises."
As to the deliveries, Paragraph 3 of the Agreement provided that "[claimant] will be responsible for employing and/or contracting with sufficient personnel and providing the equipment necessary to accomplish the delivery services required hereunder." Although the Agreement provided that claimant was to "use [his] best efforts to deliver a dry and undamaged newspaper in a location convenient to the reasonable expectations of the subscriber" no later than 6:00 A.M. on weekdays; 7:00 A.M. on Sundays; and 8:00 A.M. on Saturdays for the "Sunday Advanced Package," nothing prohibited claimant from delivering the newspapers earlier than the aforesaid times, except for the "Sunday Advanced Package," which was not to be delivered earlier than 12:01 A.M. Saturday. Claimant was free to engage other individuals to assist in the delivery of the newspapers and use any method of transportation that he desired. The only supplies, other than the newspapers, provided by PNI were plastic bags to protect the newspapers from rain.
As to payment for services rendered, Paragraph 7 of the Agreement provided that claimant would not receive a salary, but rather a fixed fee for each newspaper or periodical delivered. In accordance with the Agreement, designating claimant as an independent contractor, Paragraph 1G provided in relevant part:
[Claimant] agrees that [he] shall be solely responsible for the payment of any federal, state, social security, or local income and self[-]employment taxes including, but not limited to, unemployment insurance taxes and workers' compensation contributions, with respect to the services provided under this Agreement. PNI will not treat [claimant] as an employee for any purpose, including federal tax purposes. PNI will not withhold any taxes or prepare W-2 Forms for [claimant] but will provide [claimant] with a Form 1099, if required by law. [Claimant] agrees that [he] will not receive, or be eligible for, any employee benefits of any type as a result of performing services under this Agreement. By [claimant's] signature below, [he] waives all rights, if any, to such benefits. The fees payable to [claimant] under this Agreement have been established on the basis that [he] is an independent contractor and is responsible for the payment of all taxes, payments or contributions described above, and as otherwise pertains to the conduct of [his] business.
Paragraph 3E of the Agreement provided that claimant's fulfillment of his contractual obligations would be determined by the number of complaints received in relation to the number of publications delivered. More than two complaints per thousand for Sunday newspapers delivered, and one complaint per thousand for daily newspapers delivered constituted a material breach of the Agreement by claimant. Lastly, Paragraphs 12, 13, and 14 of the Agreement prohibited either party from terminating the Agreement without providing thirty days' written notice to the other party, except in cases of a material breach of the Agreement as defined therein.
On April 24, 2005, PNI, through its District Sales and Circulation Manager Ron Clemson, Jr., notified claimant that he was in a material breach of the Agreement for failure to ensure on-time delivery. The notice placed claimant on a thirty-day probationary period to improve his delivery performance. At the end of that period, Clemson would "thoroughly examine [his] progress, or decline, and reach a determination in regards to [his] future with The Philadelphia Inquirer." Because Clemson determined ...