GEORGE D‘ANNUNZIO, D.C., PLAINTIFF-RESPONDENT, AND GEORGE D‘ANNUNZIO, D.C., PROFESSIONAL ASSOCIATION, PLAINTIFF, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, ART RYAN, CHIEF EXECUTIVE OFFICER OF PRUDENTIAL, ROGER DEJARON, CHIEF OPERATIONS OFFICER OF PRUDENTIAL, FRANKLIN BAGGETT, VICE PRESIDENT OF PRUDENTIAL PIP CLAIMS, TONY LOCASTRO, DIRECTOR OF PIP FOR PRUDENTIAL, LINDA FRAISTAT, NEW JERSEY PIP UNIT, UNIT MANAGER FOR PRUDENTIAL, FRANK HRUSKA, PIP OPERATIONS MANAGER FOR PRUDENTIAL AND KATHY SAVVAS, CLAIMS SUPERVISOR FOR PRUDENTIAL, DEFENDANTS-APPELLANTS, AND TOM MOONEY, PRESIDENT OF FIRST MANAGED CARE OPTIONS, FIRST MANAGED CARE OPTIONS, JOHN DOES 1-100 (SAID NAMES BEING FICTITIOUS), JANE DOES 1-100 (SAID NAMES BEING FICTITIOUS) AND ABC CORPORATIONS 1-100 (SAID NAMES BEING FICTITIOUS), DEFENDANTS.
Supreme Court of New Jersey
Argued January 4, 2007-Decided July 25, 2007.
927 A.2d 113
And the Committee having recommended to the Court that respondent be censured for his violations of the Canons and the Rule,
And the Court having duly considered the record,
And respondent, by his counsel, having waived his right to a hearing before the Court,
And good cause appearing;
IT IS ORDERED that the Court hereby adopts the unanimous findings and recommendations contained in the presentment of the Advisory Committee on Judicial Conduct and censures ROBERTO A. RIVERA-SOTO for his violations of Canons 1, 2A, and 2B of the Code of Judicial Conduct and
Chief Justice RABNER and Justices LONG, LaVECCHIA, ALBIN, and HOENS join in the Court‘s Order.
Justice WALLACE did not participate.
William O. Crutchlow, argued the cause for respondent (Eichen Levinson & Crutchlow, attorneys).
Keith J. Miller, submitted a brief on behalf of amicus curiae Employers Association of New Jersey (Robinson & Livelli, attоrneys; Mr. Miller and John J. Sarno, on the brief).
Christopher P. Lenzo, submitted a brief on behalf of amicus curiae National Employment Lawyers Association/New Jersey (Green, Savits & Lenzo, attorneys).
Justice LaVECCHIA delivered the opinion of the Court.
New Jersey‘s Conscientious Employee Protection Act (CEPA),
The appeal comes to us on a summary judgment record that focused solely on the “independent contractor” versus “employee” issue. Because the defendants claimed an entitlement to judgment based on that record, we view the facts in the light most favorable to the party opposing that motion and, therefore, accord to plaintiff all favorable inferences that support his claim to CEPA‘s protection. See
In February 2000, defendant Prudential Property and Casualty Insurance Company (Prudential) hired plaintiff George D‘Annunzio as a chiropractic medical director in its Personal Injury Protection (PIP) Department. Prudential‘s PIP Department reviews and pre-approves treatment plans submitted by the doctors who treat Prudential‘s insureds and other covered claimants injured in automobile accidents. It is the responsibility of the medical directors and nurse case managers to determine whether the proposed treatments are medically necessary, consistent with the PIP refоrms authorized by the Automobile Insurance Cost Reduction Act (AICRA),
Prudential sent D‘Annunzio a one-year “Medical Director Consultant Agreement” that was described as “standard” for the position. For tax purposes, D‘Annunzio executed the agreement in the name of his professional association (George D‘Annunzio D.C.P.A.) rather than as a licensed individual, although the parties apparently agree that only a licensed individual could perform the tasks for which D‘Annunzio was retained. Pursuant to the agreement, D‘Annunzio was paid $125 per hour for twenty hours of work per week. D‘Annunzio agreed to perform his services at a designated Prudential PIP claims office, Monday through Friday, from 8:00 a.m. until noon.
In respect of the relationship between the parties, the agreement stated that
[t]he relationship between Prudential and the Medical Director is that of independent contractor. The Medical Director will maintain his own private practice and provide Medical Director services on a part time basis.... None of the provisions of this agreement are intended to create or be construed as creating any agency, partnership, joint venture or employer-employee relationship.
As an independent contractor, [t]he Medical Director will have the sole responsibility for the payment of аll self employment and applicable federal state and local taxes.
Both parties had the right to terminate the relationship without cause on sixty-days notice. Prudential also had the option of terminating the agreement immediately if D‘Annunzio committed a material breach.
According to D‘Annunzio, when he signed the agreement he expected to be permitted to perform his review function in an
As it turned out, D‘Annunzio‘s tenure with Prudential was short-lived. During the summer of 2000 he informed supervisors of his objection to insurance violations that he perceived were being perpetrated by Prudential and its employees. D‘Annunzio allegedly expressed concern about Prudential‘s failure to pay MRI bills, its hiring of non-medical vendors to perform independent medical evaluations, and the improper use of nurse case managers in the approval of medical care. In August and early September,
D‘Annunzio4 filed this action against Prudential, its parent company, as well as several officers and employees of Prudential. He alleged that he was fired because he had complained about Prudential‘s “lack of regulatory and contractual compliance” and that therefore his termination was in violation of CEPA. In addition, D‘Annunzio asserted common law claims for breach of contract and wrongful discharge.5
Limited discovery was conducted, focusing on whether D‘Annunzio qualified as an “employee” for CEPA purposеs. On the parties’ cross-motions for summary judgment, the trial court held in favor of the Prudential defendants. Applying the “Pukowsky test,” the court concluded that D‘Annunzio was an independent contractor not entitled to advance a claim under CEPA. D‘Annunzio‘s other claims were dismissed also.
D‘Annunzio appealed and the Appellate Division reversed. D‘Annunzio v. Prudential Ins. Co. of Am., 383 N.J.Super. 270, 276, 891 A.2d 673 (App.Div.2006). Also using the Pukowsky test as the paradigm for its analysis, the panel held that whether a professional person is an “employee” under CEPA‘s definition
We granted Prudential‘s petition for certification, 186 N.J. 608, 897 A.2d 1062 (2006), and now affirm the panel‘s judgment.
II.
New Jersey‘s “conscientious employee” protection policy has as its genеsis the decision of this Court in Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72, 417 A.2d 505 (1980), where we held that an at-will employee, wrongfully discharged in violation of “a clear mandate of public policy,” has a common law cause of action against an employer. Following Pierce, the Legislature enacted CEPA, codified at
Our goal in the interpretation of a statute is always to determine the Legislature‘s intent. Wollen v. Borough of Fort Lee, 27 N.J. 408, 418, 142 A.2d 881 (1958). To decipher that intent, we look first to the plain language of the statute, Lane v. Holderman, 23 N.J. 304, 313, 129 A.2d 8 (1957), and we ascribe to the statutory language its ordinary meaning, DiProspero v. Penn,
CEPA prohibits an employer from taking adverse employment action against any “employee” who exposes an employer‘s criminal, fraudulent, or corrupt activities.
CEPA defines an “employee” as
any individual who performs services for and under the control and direction of an employer for wages or other remuneration.
[
Our courts have long recognized that, in certain settings, exclusive reliance on a traditional right-to-control test to identify who is an “employee” does not necessarily result in the identification of all those workers that social legislation seeks to reach. As was aptly described by former Judge Conford in a dissent that later was relied on by this Court,
while some measure of control is essential to a finding of an employer-employee relationship, there are various situations in which the control test does not emerge as the dispositive factor. For example, where it is not in the nature of the work fоr the manner of its performance to be within the hiring party‘s direct control, the factor of control can obviously not be the critical one in the resolution of the case, but takes its place as only one of the various potential indicia of the relationship which must be balanced and weighed in determining what, under the totality of the circumstances, the character of that relationship really is. Thus, the requirement of control is sufficiently met where its extent is commensurate with that degree of supervision which is necessary and appropriate, considering the type of work to be
done and the capabilities of the particular person doing it. Patently, where the type of work requires little supervision over details for its proper prosecution and the person performing it is so experienced that instructions concerning such details would be superfluous, a degree of supervision no greater than that which is held to be normally consistent with an independent contractor status might be equally consistent with an employment relationship. In such a situation the factor of control becomes inconclusive, and reorientation toward a correct legal conclusion must be sought by resort to more realistically significant criteria.
[Marcus v. E. Agric. Ass‘n, Inc., 58 N.J.Super. 584, 597, 157 A.2d 3 (App.Div.1959) (Conford, J., dissenting) (internal citations omitted), rev‘g on dissent, 32 N.J. 460, 161 A.2d 247 (1960).]
Taken out of context, labels can be illusory as opposed to illuminating.7 When CEPA or other social legislation must be applied in the setting of a professional person or an individual otherwise providing specialized services allegedly as an independent contractor, we must look beyond the label attached to the relationship. The considerations that must come into play are three: (1) employer control; (2) the worker‘s economic dependence on the work relationship; and (3) the degree to which there has been a functional integratiоn of the employer‘s business with that of the person doing the work at issue. See Lowe v. Zarghami, 158 N.J. 606, 615-18, 731 A.2d 14 (1999). The test for determining those aspects of a non-traditional work relationship was set out in Pukowsky and we have already indicated our acceptance of that test as appropriate for CEPA purposes. In Feldman, supra, in which our dissenting colleague joined, we referenced Pukowsky as the standard for determining the inde-
In Pukowsky, the Appellate Division identified twelve factors to be considered when determining whether a plaintiff qualifies as an employee for purposes of the New Jersey Law Against Discrimination (LAD):
(1) the employer‘s right to control the means and manner of the worker‘s performance; (2) the kind of occupation-supervised or unsupervised; (3) skill; (4) who furnishes the equipment and workplace; (5) the length of time in which the individual has worked; (6) the method of payment; (7) the manner of termination of the work relationship; (8) whether there is annual leave; (9) whether the work is an integral part of the business of the “emplоyer;” (10) whether the worker accrues retirement benefits; (11) whether the “employer” pays social security taxes; and (12) the intention of the parties.
[312 N.J.Super. at 182-83 (quoting Franz v. Raymond Eisenhardt & Sons, Inc., 732 F.Supp. 521, 528 (D.N.J.1990)).]
The Pukowsky test is a hybrid that reflects the common law right-to-control test, see Restatement (Second) of Agency § 220 (1957) (setting forth control test for assessing whether master-servant relationship is established under common law agency principles creating liability obligations), and an economic realities test, Pukowsky, supra, 312 N.J.Super. at 182-83. The Pukowsky test focuses heavily on work-relationship features that relate to the employer‘s right to control the non-traditional employee, and allows for recognition that the requisite “control” over a professional or skilled person claiming protection under social legislation may be different from the control that is exerted over a traditional employee. An employer cannot be expected to exert control over the provision of specialized services that are beyond the employer‘s ability. Yet, the work may be an essential aspect of the employer‘s regular business.
Therefore, the test further allows for examination of the extent to which there has been a functional integration of the employer‘s business with that of the person doing the work. Several questions elicit the type of facts that would demonstrate a functional integration: Has the worker become one of the “cogs” in the employer‘s enterprise? Is the work continuous and directly re-
Finally, the test includes consideration of the worker‘s economic dependence on the employer‘s work, but does not insist on the same financial indicia one might expect to be present in the case of a traditional employee, such as the payment of wages, income tax deductions, or provision of benefits and leave time. Workers who perform their duties independently may nevertheless require CEPA‘s protection against retaliatory action when they speak against or refuse to participate in illegal or otherwise wrongful actions by their employer. Such individuals should benefit from CEPA‘s remedies. Moreover, CEPA‘s deterrent function would be undermined if such individuals were declared ineligible for its protection. The public at large benefits from a less restricted approach to who may sue under CEPA as an employee of a business enterprise. It is unlikely tо us that the Legislature meant to sanction a restricted approach to CEPA‘s reach.
III.
A reasonable application of CEPA‘s definition of “employee” should include adjustment for the modern reality of a business world in which professionals and other workers perform regular or recurrent tasks that further the business interests of the employer‘s enterprise, notwithstanding that they may receive remuneration through contracts instead of through the provision of wages and benefits. Therefore, in order that CEPA‘s scope fulfill its remedial promise, the test for an “employee” under CEPA‘s coverage must adjust to the specialized and non-traditional worker who is nonetheless integral to the business interests of
In this matter, the trial court and Appellate Division resorted to the Pukowsky criteria when addressing D‘Annunzio‘s status under CEPA with differing outcomes. D‘Annunzio, supra, 383 N.J.Super. at 294-97. The Appellate Division concluded that the trial court erred when it granted summary judgment to defendants because the court did not properly weigh the factors in the light of a professional services work relationship. The panel emphasized the importance of “the employer‘s ‘control and direction’ of the worker‘s performance of services for the employer....” Id. at 277, 283 (highlighting Pukowsky factors one, two, four, and seven). Accordingly, it focused on factors that examine the nature of the employer‘s right to control the work of a licensed professional, such as D‘Annunzio-not the right to control the outcome, but rather to manage how that work is performed for the purposes оf the employer‘s business operations. Id. at 283. The panel also attributed less weight than did the trial court to those factors that would produce evidence of traditional employee status, when applicable, such as payment of wages and benefits. Ibid.
We agree with the emphasis in the Appellate Division‘s analysis and add that the Pukowsky test also appropriately examines the relationship to determine whether the professional‘s services have been incorporated into the work of the business (factor nine), and looks at the impact of that work relationship on the professional‘s ability to offer his or her services to the public (the overall economic realities of the relationship beyond method of payment and provision, or not, of benefits and leave). As to the former, one
Moreover, D‘Annunzio presented evidence that, although designated an independent contractor in his agreement with Prudential (a matter that we view as informative but not dispositive because the designation was stated by the parties to be for a purpose unrelated to CEPA‘s interests), his day-to-day activities were controlled in minute detail. The step-by-step instructions provided to him set fоrth every single particular as to how to review a claim, including direction on how much information to provide in his written reviews. Although that is not to say that a professional cannot be told to be succinct without converting him to the status of an employee under CEPA, D‘Annunzio certainly can argue that he was essentially under the control of Prudential and that he was a veritable “cog” in the PIP Department‘s operations.
D‘Annunzio‘s time spent at Prudential‘s operations was continuous, week to week, and daily, for a substantial period of time during business hours. That Prudential exacted a not-inconsequential amount of time from him, on its premises, caused D‘Annunzio to be away from attending to his private practice. The impact on D‘Annunzio cannot be said to be minor. Moreover, his duties included numerous administrative tasks, all to be performed in accordance with protocols devised by Prudential to meet their business plan for the review and approval of PIP treatment plans. In fact, all of the detailed requirements expected of D‘Annunzio were in furtherance of Prudential‘s operation.
IV.
The judgment of the Appellate Division is affirmed as modified and the matter is remanded to the trial court.
Justice RIVERA-SOTO, dissenting.
The Conscientious Employee Protection Act (CEPA),
In Section 2(b) of CEPA,
I.
As a matter of statutory interpretation, there is no need to engage in the Pukowsky2 analysis embraced by the majority. The requirement that a CEPA claimant be a defined “employee“-as opposed to an “independent contractor“-was imposed by the Legislature, not by judicial fiat. In that context, our role is limited:
The “paramount [judicial] goal when interpreting a statute” is to determine and fulfill the legislative intent. DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005). To achieve that goal, we first look to the statutory language, State v. Pena, 178 N.J. 297, 307, 839 A.2d 870 (2004), and interpret the language in accordance with its plain meaning if it is “‘clear and unambiguous on its face and admits of only one interpretation.‘” State v. Thomas, 166 N.J. 560, 567, 767 A.2d 459 (2001)
(quoting State v. Butler, 89 N.J. 220, 226, 445 A.2d 399 (1982)). If the statute‘s language “is susceptible to different interpretations, the court considers extrinsic factors, such as the statute‘s purpose, legislative history, and statutory context to ascertain the legislature‘s intent.” Aponte-Correa v. Allstate Ins. Co., 162 N.J. 318, 323, 744 A.2d 175 (2000) (quoting Twp. of Pennsauken v. Schad, 160 N.J. 156, 170, 733 A.2d 1159 (1999)); see also DiProspero, supra, 183 N.J. at 492-93, 874 A.2d 1039; State v. Pena, supra, 178 N.J. at 307-08, 839 A.2d 870.
[Thomsen v. Mercer-Charles, 187 N.J. 197, 206, 901 A.2d 303 (2006).]
We have summarized our task thusly: “When interpreting a statute or regulation, we endeavor to give meaning to all words and to avoid an interpretation that reduces specific language to mere surplusage.” DKM Residential Props. Corp. v. Twp. of Montgomery, 182 N.J. 296, 307, 865 A.2d 649 (2005) (citing Franklin Tower One v. N.M., 157 N.J. 602, 613, 725 A.2d 1104 (1999); Norman J. Singer, 2A Sutherland Statutory Construction § 46:06, at 190-92 (6th ed. 2000)). See also Twp. of Holmdel v. N.J. Highway Auth., 190 N.J. 74, 107-08, 918 A.2d 603 (2007) (Rivera-Soto, J., dissenting) (“When interpreting a statute, our overriding goal must be to determine the Legislature‘s intent. We have explained that ordinarily, the language of the statute is the surest indicator of the Legislature‘s intent. When, as here, the language is plain and clearly reveals the meaning of the statute, the court‘s sole function is to enforce the statute in accordance with those terms. We also consider the overall legislative scheme, because our task is to harmonize the individual sections and read the statute in the way thаt is most consistent with the overall legislative intent.” (citations, internal quotation marks, and editing marks omitted)).
An application of that canon of construction leads inexorably to the conclusion that the Legislature is no stranger to the differences between an employee and an independent contractor; it has repeatedly made a distinction between the two. Thus, in those instances when the Legislature has seen fit to do so, it has made the terms “employee” and “independent contractor” synonymous. See, e.g.,
Indeed, a recent legislative enactment underscores the Legislature‘s recognition of the differences between employees and independent contractors and the steps the Legislature undertakes when it wishes to equate them. In the Construction Industry Indepеndent Contractor Act, L. 2007, c. 114, § 4 (eff. July 13, 2007), the Legislature provided that “services performed in the making of improvements to real property by an individual for remuneration paid by an employer [as statutorily defined] shall be deemed to be employment unless and until it is shown” what an independent contractor status-as defined in the statute-exists. Illustrative of the importance the Legislature ascribes to the distinction between employees and independent contractors, that Act also provides for civil and criminal penalties if an employer misclassifies construction workers as independent contractors. Id. at §§ 5-7. Thus, the proposition that the Legislature is fully cognizant of how to-and entirely able to-treat “employees” and “independent contractors” as fungible terms admits of no serious dispute.
Also, when it has deemed it appropriate, the Legislature has specifically defined the term “independent contractor” without regard to any concept of employment. See
In other instances and in a wide variety of contexts, the Legislature has used the term “independent contractor” without any particular definition, further acknowledging both its meaning separate and apart from, and its differences with, the term “employee.” See, e.g.,
The brute force of those disparate statutory provisions is clear: the Legislature can and repeatedly does set forth when it wishes its reach to cover independent contractors and when it does not.
In that context, CEPA is illustrative of how the Legislature acts when it does not wish to equate “independent contractors” with “employees.” When the Legislature has chosen to eliminate any distinctions between “employees” and “independent contractors” it has displayed no reticence or difficulty in doing so. Yet, it cannot be disputed that CEPA protects employees and only employees. Against that backdrop, any extension of CEPA‘s reach is an unwarranted intrusion into the Legislature‘s realm.
In the end, the majority‘s interpretation of CEPA‘s definition of an “employee” stretches that definition to an unrecognizable-and ultimately meaningless-shape. Thus, as a matter of statutory construction, CEPA should be interpreted in a manner true to its legislative origins: as the Conscientious Employee Protection Act. Any further expansion of its reach properly belongs to the Legislature.
II.
Even if one accepts the majority‘s interpretation of CEPA‘s reach,3 D‘Annunzio is emblematic of how the majority‘s construct
The relationship between Prudential and [D‘Annunzio] is that of independent contractor. The Medical Director will maintain his own private practice and provide Medical Director services on a part time basis. Prudential makes no representations as to the volume of referrals and [D‘Annunzio] acknowledges [that] this agreement is not exclusive. None of the provisions of this agreement are intended to create or be construed as creating any agency, partnership, joint venture or employer-employee relationship.
As an independent contractor, [D‘Annunzio] will have the sole responsibility for the payment of all self employment and applicable federal[,] state and local taxes. [Emphasis supplied.]
Despite that clear language, D‘Annunzio now claims that, because he was provided stationery on which to write, because he was told the format in which reports were to be prеpared, and because he was asked to do what he contracted in writing to do-that Prudential would provide him “adequate working space and necessary resources” and that he would “maintain office hours at the Prudential PIP claims office[,] Monmouth Executive Center, 3 Paragon Way Bldg. 3[,] Freehold, NJ 07728 from 8 am until 12 pm (Monday through Friday)“-and even though his contract with Prudential required that he maintain a separate, viable private practice, somehow Prudential exercised sufficient “control and direction” over him to invoke CEPA‘s protections. That claim is legal gibberish.
The contract between D‘Annunzio and Prudential could not have been clearer. D‘Annunzio contracted to perform professional services on a part-time basis for Prudential. For his own econom-
CEPA represents all of the salutary goals and aspirations the majority eloquently describes. It is, as the majority notes, “remedial social legislation designed to promote two complimentary public purposes: to protect and [thereby] encourage employees to report illegal or unethical workplace activities[,] and to discourage public and private sector employers from engaging in such conduct.” Ante, at 119, 927 A.2d at 118 (citations and internal quоtation marks omitted). However, when we pervert its intendment solely to extend its reach to one who proudly wears the mantle of an independent contractor when it is convenient to him-only to shed it for the greener pastures of a hoped-for litigation recovery-we devalue CEPA‘s worth and cheapen its meaning. Prudential negotiated its contract with D‘Annunzio in good faith, and Prudential abided by all of the contract‘s terms, including its termination on notice provisions. In those circumstances, D‘Annunzio should be required to abide by the terms of the contract-the basis of the bargain-he knowingly, intelligently, and intentionally negotiated, not rewarded with a breath of renewed life to this rightly defunct claim.
III.
For the foregoing reasons, I would reverse the judgment of the Appellate Division and reinstate the judgment of the trial court
For Affirmance as Modified/Remandment-Chief Justice ZAZZALI, and Justices LONG, LaVECCHIA, ALBIN and WALLACE-5.
For reversal-Justice RIVERA-SOTO-1.