Skip to main content



Leoson Group, Inc. v. Board of Review

A-4060-03T3 (N.J. Super. App. Div. 2005) (Unpublished)

UNEMPLOYMENT—For unemployment benefit purposes, someone is presumed to be an employee unless the employer can successfully establish that the person has been and will continue to be free from control or direction over the performance of his or her services; the services performed were outside the usual course of business for which such service is usually performed; and the person is customarily engaged in an independently established trade, occupation, profession or business.

A woman worked as a food server for several catering companies. She obtained work through an employment brokerage employment broker that placed food servers temporarily with its clients, most of whom were catering companies. The woman would regularly call the employment broker to inquire about work. The employment broker would then inform the woman of employment opportunities, which the woman had the option to accept. The employment broker usually paid the woman directly for her services, and was later reimbursed by its clients. After working with the employment broker for several years, the woman applied for unemployment benefits based on her employment with the employment broker. The examiner found that she was eligible for benefits. The employment broker appealed to the appeal tribunal. At a hearing, the employment broker’s president and accountant testified regarding the nature of the woman’s employment. The woman failed to appear at the hearing. The appeals examiner denied the woman’s benefits application on the basis that she was an independent contractor, and not an employee of the employment broker. On appeal, the board of review conducted several hearings on the application at which the woman did not appear. The board heard testimony solely from the employment broker’s representatives and concluded that the woman was entitled to unemployment benefits. It found that the employment broker failed to meet its burden under N.J.S.A. 43:21-19(i)(6) by establishing that the woman was engaged in an independently established trade, occupation or profession. The employment broker appealed the board’s determination.

The Appellate Division affirmed the board of review’s decision. It also found that the employment broker failed to meet its burden under N.J.S.A. 43:21-19(i)(6). This statute requires an employer contesting unemployment benefits to establish that the person requesting the benefits is not an employee. A person is presumed an employee unless the employer can successfully establish the following factors of the “ABC test” as set forth in N.J.S.A. 43:21-19(i)(6): A) the person has been and will continue to be free from control or direction over the performance of his or her services; B) the service performed by the person is outside the usual course of business for which such service is usually performed; and C) the person is customarily engaged in an independently established trade, occupation, profession or business. The Court found that the employment broker failed to establish factor “C” of the test. In order to meet this factor, a employment broker must show that the person requesting benefits is providing services that are independent of the employer and upon termination of employment, the person will not be unemployed. The person will not be deemed an employee if he or she has a business, trade or occupation that will continue despite the termination of the employment relationship. The Court held that the employment broker failed to meet its burden by establishing that the woman maintained an independent business holding herself out as a server for hire. As a result, it upheld the board of review’s award of employment benefits.


MEISLIK & MEISLIK
66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 • info@meislik.com