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August 6, 2015


Argued April 22, 2015 Decided

Before Judges Fuentes, Ashrafi and O'Connor.

On appeal from New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation, Docket No. 2012-5012.

Jeffrey Olshansky argued the cause for appellant (David Tykulsker & Associates, attorneys; Mr. Olshansky and David Tykulsker, on the brief).

David Lustbader argued the cause for respondent (Philip M. Lustbader & David Lustbader, P.A., attorneys; John L. Riordan, Jr., on the brief).


In this workers' compensation action, petitioner Faris Babekr appeals the February 4, 2014 order finding he was not an employee of respondent XYZ Two Way Radio (XYZ) but an independent contractor at the time he was injured in a car accident on October 21, 2011. After reviewing the record and the applicable legal principles, we affirm.


The pertinent facts are as follows. Petitioner is a limousine driver. Since 1988, he has provided chauffeuring services to XYZ, a car limousine service. At the time of the accident, XYZ had approximately 430 drivers and fifty employees working in its office providing administrative services. XYZ is made up of individual drivers, including petitioner, who own shares in XYZ. The drivers elect the "board members," who make the key decisions concerning the company's operations.

Typically petitioner worked as a driver ten to twelve hours per day, six days a week. He chose the specific days and hours he wanted to work in a given week, but generally worked from early evening to approximately 6:00 a.m. He had the option to not work at all. He used his own car to chauffer passengers and paid for the automobile insurance covering the car. There was no evidence that he was reimbursed for gasoline or other expenses incurred to transport passengers.

XYZ gave each driver a computer to install in his car, on which a driver logged on when ready to work. Generally, communications between XYZ and a driver were made through the computer. A driver had to be within the tri-state area, the extent of XYZ's service area, to receive a communication from XYZ through the computer, including offers to transport a passenger.

The service area was divided into various geographical zones. When a driver was in a particular zone, he could alert XYZ to let it know he was available to pick up a passenger in that or a nearby zone. However, when a driver first logged on, he had to get in line behind other drivers, who were also waiting for passengers to become available within his or a nearby zone. After getting and taking a passenger to his destination, a driver had to get in line again and wait for a new passenger. A driver was free to reject any offer to transport a passenger during his shift but, if he did, he was placed "off air" and could not receive any communications from XYZ for thirty minutes. But a driver could terminate his availability to receive an assignment at any time by logging off of the computer.

Passengers had accounts with XYZ and paid their fares directly to it; XYZ forwarded to its drivers a percentage of the fares paid by each passenger a driver had transported. No deductions for taxes were removed from the check; every year, a driver got a 1099 form to submit to the taxing authorities. Petitioner testified the drivers were required to dress a certain way and to have a certain type of car in which to transport XYZ's passengers, but he did not testify to any other restrictions.

Petitioner claims that, on October 21, 2011, he was injured in a car accident while working. On May 10, 2013, petitioner filed a claim for medical benefits in the Division of Workers' Compensation. Following a hearing, the Workers' Compensation judge determined that petitioner was not an employee of XYZ at the time of the accident and thus had not suffered a compensable injury under the Workers' Compensation Act, N.J.S.A. 34:15-1 to -142 (Act).


"Appellate review of workers' compensation cases is 'limited to whether the findings made could have been reached on sufficient credible evidence present in the record . . . with due regard also to the agency's expertise[.]'" Hersh v. County of Morris, 217 N.J. 236, 242 (2014) (alteration in original) (quoting Sager v. O.A. Peterson Constr., Co., 182 N.J. 156, 164 (2004)). However, a judge of compensation's "interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995); see also Auletta v. Bergen Ctr. for Child Dev., 338 N.J. Super. 464, 470 (App. Div.), certif. denied, 169 N.J. 611 (2001).

Employees are defined by N.J.S.A. 34:15-36, as "all natural persons, including officers of corporations, who perform service for an employer for financial consideration . . . ." Independent contractors are not included in this definition and are not entitled to benefits under the Act. Auletta, supra, 338 N.J. Super. at 471.

In our Supreme Court's recent decision in Estate of Kotsovska v. Liebman, ___ N.J. ___,___ (2015) (slip op.), the Court endorsed the use of the following factors when endeavoring to determine whether a person is an employee or independent contractor under the Act

(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 "employer"; (10) whether the worker accrues retirement benefits; (11) whether the "employer" pays social security taxes; and (12) the intention of the parties.

[Id. at 40-41.]

In addition, the Court also approved consideration of "the worker's economic dependence on the work relationship," a factor it had endorsed in D'Annunzio v. Prudential Insurance Co. of America, 192 N.J. 110, 122 (2007), when determining a person's employment status. Kotsovska, supra, slip. op. at 40.

Applying the above factors to the case under review, we conclude that the record supports the judge of compensation's conclusions that petitioner was not an employee of XYZ at the time of the accident and, thus, the injuries he sustained are not compensable.

Turning to the first factor, XYZ exercised very little control over the means and manner of petitioner's performance. While petitioner had to dress in a certain way and drive a particular kind of car, these were hardly exacting, controlling measures and he was otherwise left on his own and was largely unaccountable to XYZ. XYZ located passengers for him when he chose to log onto the computer and, in return, he transported the passengers for a percentage of the fare.

Petitioner was able to work when he pleased. He could work for as long as eighteen hours per shift or not at all. But the potential for work was always available by merely logging onto the computer and waiting in line behind the other drivers for a passenger to become available. He did not risk losing the right to log on if he limited his hours or did not work at all. Stated differently, he could not be terminated from his "job."

It has been recognized that this factor carries less weight when the job in question does not require direction or supervision from the hiring or retaining party. See D'Annunzio supra, 192 N.J. at 123. Given the nature of the work petitioner performed driving passengers to their destinations XYZ did not need to give petitioner any direction or exert any control over how he drove passengers to their destinations. For the same reasons, factors two and three also have minimal significance.

As for factor four, petitioner supplied his own equipment, but for the computer XYZ provided to each driver to facilitate communications between it and the drivers. Otherwise, petitioner used his own car to transport passengers; there was no evidence XYZ reimbursed him for any expenses he incurred to carry out his tasks. Further, there is no workplace in the traditional sense. Petitioner used his car to perform his job.

Turning to factor five, by the time of the accident, petitioner had worked for XYZ for twenty-three years. As for the method of payment (factor six), petitioner did not receive a salary or wage. He was paid a percentage of the fare for each passenger he transported. With respect to the "manner of termination of the work relationship" (factor seven), as previously noted, petitioner was free to use or not use XYZ as a source to locate passengers.

There was no annual leave (factor eight); he did not accrue any retirement benefits (factor ten); XYZ did not deduct any taxes from petitioner's share of the fares (factor eleven). As for the intention of the parties (factor twelve), given their arrangement, it is fair to surmise the parties did not intend petitioner to be an employee.

Whether the work was an integral part of the business of the alleged employer (factor nine) is to be considered with the factor that requires consideration of the worker's economic dependence on the work relationship. Kotsovska, supra, slip op. at 46. In Kotsovska the Court observed

A worker's economic dependence upon an employer is a factor to be considered when a worker performs a function that constitutes a part of the employer's business. . . . This consideration looks to whether the "decedent's labor was a cog in the wheel of [the employer's] operation as a subcontractor of [the employer] in as realistic a sense as the [work] being done by [the employer's] regular employees." Further, "[t]he independence of [the worker] is not to be determined by looking at the [worker] or job alone, but by judging how independent, separate and public his [or her] business service is in relation to a particular employer."

[Id. at 47 (alteration in original) (internal citations omitted).]

Here, to be sure, transporting passengers was an integral part of XYZ's business. But those who transported the passengers were not employees but co-owners of XYZ. The understanding between XYZ and the drivers was that, in exchange for producing passengers for the drivers, the drivers would transport the passengers and take a percentage of the fare.

Moreover, the evidence indicated that XYZ was never dependent upon any one particular driver to carry out the job of transporting passengers. If one driver were not available to pick up and transport a passenger, another was waiting in line ready to do so. No one driver was ever so essential to the effective functioning of the business to became a cog in its wheel.

We do not second-guess a judge of compensation when sufficient credible evidence in the record supports his or her findings. The record supports the judge of compensation's conclusion that petitioner was not an employee of XYZ and, thus, the injuries he sustained in the accident are not compensable under the Act.



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