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Van Sickle v. Board of Review

372 N.J. Super. 460, 859 A.2d 716 (App. Div. 2004)

UNEMPLOYMENT COMPENSATION; INDEPENDENT CONTRACTORS; MOTOR VEHICLE AGENTS—A private motor vehicle agent is an independent contractor and not an employee of the Motor Vehicles Commission; therefore, such an agent is not entitled to unemployment compensation benefits.

In 1995, following a nine-year period when twenty-five agencies were being operated directly by the Motor Vehicles Commission (MVC), certain state-operated motor vehicle agencies were privatized by an executive order. An agent, pursuant to a contract with the MVC, operated one of the privatized motor vehicle agencies until his authority to act as an agent was revoked. As an agent, his responsibilities included registering motor vehicles, licensing drivers, processing registration certificates, collecting fees and taxes, and issuing plates. Under the agreement, the agent received a substantial annual payment to cover all allowable MVC expenses, including compensation for his employees and himself. The contract made him an independent contractor, and not an employee of the MVC. As such, he was entitled to none of the rights accorded to employment status. Consistent with his independent contractor status, the agent obtained a federal tax number and received a self-employment tax form 1099.

When the agent’s agency authority was revoked, he filed a claim for unemployment benefits. The Board of Review held that the agent’s relationship with the MVC did not fall within the statutory definition of “employment.”

The Appellate Division affirmed the Board’s decision. The 1995 reprivatization did not alter the essential features of the motor vehicle agency arrangement or the status of motor vehicle agents as independent contractors. To the contrary, the agency’s positions were abolished by reason of a change in policy. Significantly, the reorganization plan still allowed for the MVC director to continue appointing private motor vehicle agents. Furthermore, the agency contracts released any claim by an agent to the rights, benefits, and privileges accruing to state employees, and expressly established the agent’s status as an independent contractor. Therefore, the Court affirmed the Board’s decision and held that the agent was not entitled to unemployment compensation benefits.

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