TRENTON, N.J. (Legal Newsline) - The New Jersey Supreme Court has ruled against a real estate salesperson who entered into an agreement as an independent contractor but then sued under the theory he was an employee of the company.
Justice Anne Patterson's May 13 majority opinion overturned a trial court ruling finding James Kennedy II could sue under the Wage Payment Law, which governs compensation for employees but not contractors.
He worked six years for Weichert Co. and alleged it unlawfully deducted fees and expenses from his commissions. A 2022 amendment to the Brokers Act clarified that 2018 laws allowing brokers and salespersons to enter contractor agreements applied retroactively to claims like Kennedy's.
A test imposed by a previous case - the ABC test - addressed a standard for employment misclassification disputes under the WPL. The Real Estate Commission then adopted regulations to clarify real estate brokers and salespersons can enter contractor agreements, and the Legislature followed.
"Here, the real estate broker and the real estate salesperson agreed in writing to affiliate in an independent contractor relationship, thus complying with (state law)," Patterson wrote.
"Kennedy, who agreed in writing to affiliate with Weichert as an independent contractor, must accordingly be treated as an independent contractor 'notwithstanding... any other law, rule, or regulation to the contrary,' including the WPL.
"For the period during which he worked as a Weichert real estate salesperson, Kennedy was not subject to the ABC test that governs employee classification disputes under the WPL... or to any other classification standard set forth in statutes, regulations, or case law."
The decision grants Weichert's motion to dismiss.