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New Jersey Department of Labor v. Vanko Painting/Coating, Inc.

A-1415-06T2 (N.J. Super. App. Div. 2007) (Unpublished)

CONTRACTORS — For the purpose of determining what constitutes a “financial interest” in a business entity subject to registration under the Public Works Contractors Registration Act, even an officership in the company, without an ownership interest, qualifies.

The New Jersey Department of Labor (DOL) suspended a man’s “license to perform public contracting work” in New Jersey. The reason presented was that he failed “to disclose his interest in the company apparently owned by his former spouse.” That company was on the DOL’s revoked list at the time. On appeal, he argued that he did not have “notice of what constitute[d] a financial interest warranting disclosure.”

The Court looked at the close relationship between the Prevailing Wage Act and the Public Works Contractors Registration Act. The Prevailing Wage Act established a “registration system for contractors and subcontractors engaged in public works projects.” The Contractor Registration Act “requires that registrants provide the name of each person with a ‘financial interest’ in the business entity subject to registration.” Even though the Registration Act does not define “financial interest,” it does require each registrant to disclose the percentage of his or her interest and, “if the firm is publically traded, the contractor must also disclose the names of the officers of the registrant.” The debarred individual argued that a fair reading of this subsection of the Registration Act “suggest[ed] that [he was] required to disclose an interest in the sole proprietorship, only if he had an ownership in the firm.” In this case, he did not. The Court disagreed because in reading the Registration Act and the Prevailing Wage Act in pari materia, the court saw that the Commissioner of the Department of Labor had the right to promulgate regulations and, in doing so, defined the term “interest” to include an officer of a contractor or subcontractor. In this case, when the individual’s spouse’s” company paid a fine to the DOL, he, himself, in a letter to the State Division of Taxation, listed himself as the vice president of his wife’s company. Consequently, by virtue of the regulations promulgated by the DOL, he was held an “interest” in his wife’s company because he was an officer.

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