The 2014-15 Supreme Court term brought major decisions on diverse employment law issues—employer liability for sexual harassment, how to determine whether a worker is an “employee” for purposes of wage and hour laws, the extent of protection afforded watchdog employees under the Conscientious Employee Protection Act, and the negotiability of furlough decisions by municipal employers.

Who Is an Employee?

In Hargrove v. Sleepy's, 220 N.J. 289 (2015), the court addressed a certified question from the United States Court of Appeals for the Third Circuit touching on one of the hottest issues in current employment law—when is a worker who has been designated an “independent contractor” really an “employee”? Specifically, the federal appellate court asked the state Supreme Court to decide: “Under New Jersey law, which test should a court apply to determine a plaintiff's employment status for purposes of the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.1, et seq., and the New Jersey Wage and Hour Law, N.J.S.A. 34:11-56a, et. seq.?” The court concluded that the “ABC” test derived under the New Jersey Unemployment Compensation Act—providing the broadest definition of employee—should apply under the Wage Payment Law and the Wage and Hour Law as well.

The plaintiffs in Hargrove delivered mattresses for Sleepy's. Although they had signed Independent Driver Agreements with Sleepy's, they contended that in fact they were employees and that the mischaracterization of them as independent contractors was merely a ruse to avoid paying them employee benefits such as health insurance, deferred compensation, and medical and family leave. They filed suit in the United States District Court for the District of New Jersey, which granted summary judgment in favor of Sleepy's. Utilizing the test for employee status under the Federal Employee Retirement Income Security Act, the district court found that the plaintiffs were independent contractors. The plaintiffs appealed, and after hearing oral argument, the Third Circuit submitted a petition to the N.J. Supreme Court asking it to decide the question of law presented, and the petition was granted.