Court Opinion

ID: 3209672
Source: CourtListenerOpinion
Date Created: 2016-06-06 14:05:35.527879+00
Date Added: 2024-06-11T14:03:36.133531
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                  APPROVAL OF THE APPELLATE DIVISION

                                     SUPERIOR COURT OF NEW JERSEY
                                     APPELLATE DIVISION
                                     DOCKET NO. A-2847-14T4

AIT GLOBAL INC.,
                                        APPROVED FOR PUBLICATION
     Plaintiff-Appellant,
                                              June 6, 2016
v.
                                          APPELLATE DIVISION
PANKAJ YADAV,

     Defendant-Respondent.
_______________________________

         Argued April 19, 2016 – Decided June 6, 2016

         Before Judges Reisner, Hoffman and Whipple.

         On appeal from Superior Court of New Jersey,
         Law Division, Middlesex County, Docket No.
         L-4211-14.

         Michael J. Lauricella argued the cause for
         appellant   (Archer   &    Greiner,   P.C.,
         attorneys; Patrick Papalia, of counsel and
         on the briefs; Mr. Lauricella, on the
         briefs).

         Jeremy   Esakoff   argued   the   cause for
         respondent (Esakoff, Jaggi & Patel, L.L.C.,
         attorneys; Mr. Esakoff, on the brief).

     The opinion of the court was delivered by

WHIPPLE, J.A.D.

     Plaintiff appeals two January 9, 2015 orders and a judgment

dated February 6, 2015.     The sole question on appeal is whether
plaintiff, a temporary help service firm (THSF), is required to

be licensed as an employment agency pursuant to the Private

Employment Agency Act (the Act), N.J.S.A. 34:8-43 to -66, in

order   to    enforce    an   employment     agreement    with    defendant.

Because we conclude that registration, rather than licensing, is

required for a THSF to enforce an employment agreement pursuant

to the Act, we reverse and remand.

                                        I.

      Plaintiff is a New Jersey corporation registered with the

New Jersey Division of Consumer Affairs as a THSF, providing

short-term information technology (IT) consultants.              On November

4,   2013,   plaintiff   hired   defendant     as   an   IT   consultant    to

perform software consulting services for plaintiff's customers.

The parties entered into an employment agreement.             The agreement

contained a term provision, an early termination provision, and

a restrictive covenant.       The term provision states that:

             The initial term of this Agreement shall be
             for twelve (12) working months commencing on
             the date the Employee arrives at the Company
             and begins working on a Company assignment
             or project (the "Commencement Date"), and
             expiring one (1) year after the Commencement
             Date (the "Termination Date") . . . .

The early termination provision states:

             The Employee agrees that if the Employee
             terminates this Agreement prior to the
             Commencement Date [or] Termination Date
             . . . the Employee will pay the Company a

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                sum of Three Thousand Dollars ($3,000.00)
                for every month remaining on the [initial
                term] as a liquidated damages sum for the
                breach of this provision only which is in
                addition to any other damages the Company
                may seek for a breach of any other provision
                in this Agreement . . . .

Finally, the restrictive covenant provides:

                Employee agrees that during the term of this
                agreement and a period of one (1) year
                following the termination of the Employee's
                employment or one (1) year following the
                Termination   Date    of   this   Agreement,
                whichever is later, the Employee shall not
                directly or indirectly, on behalf of any
                individual or entity, be employed by any
                Company client, vendor, broker, end-client,
                end-user or any entity introduced to the
                Employee by the Company or any entity that
                Employee provided services for or through
                pursuant to Employee's obligations under
                this Agreement.

      On    May    12,   2014,      approximately    five       months   before    the

conclusion of defendant's initial twelve-month term, defendant

sent an email to plaintiff, indicating he was resigning and

giving two weeks' notice.                  Plaintiff filed suit, seeking to

recover    liquidated         damages   pursuant    to    the   early    termination

provision of the employment agreement.                    Plaintiff's complaint

asserted claims of breach of contract, tortious interference,

breach     of    the   duty    of   good    faith   and   fair    dealing,      unjust

enrichment, and breach of the duty of loyalty.

      Defendant filed an answer and counterclaim, asserting that

the   employment       agreement     was    unenforceable       and   seeking    legal

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fees   and    costs    associated         with    defending       against    plaintiff's

lawsuit,     based     on    the    premise       that       plaintiff     violated    the

Consumer Fraud Act               by including "improper and/or fraudulent"

provisions in the employment agreement.                         On October 24, 2014,

defendant     moved     for      summary     judgment,          seeking    dismissal    of

plaintiff's claim and judgment on his counterclaim.                            Plaintiff

subsequently        filed    cross-motions         in    support     of     amending   its

complaint and in support of summary judgment.

       On    January        9,    2015,     the        motion    judge      entered    two

dispositive     orders.            The    first    order        dismissed    plaintiff's

complaint with prejudice and entered judgment for defendant on

his counterclaim.            Citing N.J.S.A. 34:8-45 and 34:8-46(h), the

motion      judge     concluded      that        the    employment        agreement    was

unenforceable         because       plaintiff          was    not   licensed      as    an

employment agency at the time the cause of action arose.                               The

motion judge's second order denied plaintiff's cross-motions for

substantially the same reason.1              This appeal followed.

                                            II.

       Because this issue comes to us following the adjudication

of motions for summary judgment, we "employ the same standard

[of review] that governs the trial court."                          Henry v. Dep't of

1
  In connection with the counterclaim, the motion judge awarded
defendant $5,875 in legal fees and $230 in costs.

                                             4                                   A-2847-14T4
Human Servs., 204 N.J. 320, 330 (2010) (alteration in original)

(quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App.

Div. 2004)).       Summary judgment should be granted only if the

record   demonstrates    there   is   "no     genuine     issue     as   to    any

material fact challenged and that the moving party is entitled

to a judgment or order as a matter of law."                      R. 4:46-2(c);

Henry, supra, 204 N.J. at 330; Brill v. Guardian Life Ins. Co.

of Am., 142 N.J. 520, 529 (1995).           "An issue of fact is genuine

only if, considering the burden of persuasion at trial, the

evidence submitted by the parties on the motion, together with

all   legitimate    inferences   therefrom         favoring   the    non-moving

party, would require submission of the issue to the trier of

fact."   R.    4:46-2(c);   Henry,        supra,    204   N.J.      at   329-30.

Moreover, where, as here, there is no genuine dispute of fact

the trial court's ruling on the legal question is "not entitled

to any special deference."       Manalapan Realty L.P. v. Manalapan

Twp., 140 N.J. 366, 378 (1995); see also Henry, supra, 204 N.J.

at 330; Perrelli v. Pastorelle, 206 N.J. 193, 199 (2011).

      Plaintiff asserts the motion judge erred in dismissing its

complaint and granting defendant's motion because: the licensure

requirements for employment agencies do not apply to THSFs, and

it did not violate the Act.      We agree.

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       Plaintiff's appeal hinges on our interpretation of N.J.S.A.

34:8-43 to -66.         When interpreting a statute, we must give the

relevant statutory language its ordinary meaning and construe it

"in a common-sense manner."           State ex rel. K.O., 217 N.J. 83, 91

(2014)   (citations       omitted);      see   also      N.J.S.A.     1:1-1   (stating

that the words of a statute are customarily construed according

to their generally accepted meaning).                    We do not add terms which

may have been intentionally omitted by the Legislature; nor do

we    speculate    or   otherwise     engage        in   an   interpretation      which

would contravene the statute's plain meaning.                          DiProspero v.

Penn, 183 N.J. 477, 492-93 (2005).                  Where plain language "leads

to a clear and unambiguous result, then the interpretive process

should end, without resort to extrinsic sources."                             State v.

D.A., 191 N.J. 158, 164 (2007).

       The Act's primary purpose is to "alleviate abuses in the

employment-agency industry," Accountemps Div. of Robert Half,

Inc. v. Birch Tree Grp., Ltd., 115 N.J. 614, 623 (1989).                             The

Act    prohibits    "deceptive      or    otherwise        unfair     practices    when

dealing with both job seekers and employers."                       Data Informatics

v. Amerisource Partners, 338 N.J. Super. 61, 71 (App. Div. 2001)

(quoting    A.    3018,   203rd   Leg.,        2d    Sess.    (N.J.    1989)).       The

remedial purpose of the Act is served by requiring licensure or

registration of entities whose activities are regulated by the

                                          6                                    A-2847-14T4
Act.      Id. at 71-72; Accountemps, supra, 115 N.J. at 623.                                 An

entity subject to the Act's provisions cannot maintain a lawsuit

to collect a fee from a job seeker or an employee unless the

entity can prove that it met the Act's licensure/registration

requirement.             N.J.S.A. 34:8-45 ("A person shall not bring or

maintain an action in any court of this State for the collection

of   a    fee       .   .   .    without      alleging      and    proving     licensure    or

registration, as appropriate, at the time the alleged cause of

action arose.").                With regard to this requirement, the Act makes

a distinction between two types of entities: employment agencies

and THSFs.

         The Act defines an "[e]mployment agency" as "any person

who, for a fee, charge or commission: . . . (2) [s]upplies job

seekers        to       employers    seeking         employees       on    a   part-time     or

temporary assignment basis who has not filed notification with

the Attorney General pursuant to the provisions of [N.J.S.A.

56:8-1.1]."              N.J.S.A.    34:8-43.          In   turn,     N.J.S.A.     56:8-1.1,

which is part of the Consumer Fraud Act, imposes notification,

registration fee, and bonding requirements on THSFs.

         The    Act      defines     a   THSF    as    "any       person   who   operates     a

business        which       consists     of    employing      individuals        directly   or

indirectly for the purpose of assigning the employed individuals

to assist the firm's customers in the handling of the customers'

                                                 7                                   A-2847-14T4
temporary, excess or special workloads . . . ."               N.J.S.A. 34:8-

43.    In contrast to an employment agency, "[a THSF] is required

to comply with [N.J.S.A. 56:8-1.1]."          N.J.S.A. 34:8-43.

       Employment agencies must obtain a license, which requires

them   to   demonstrate    compliance    with    extensive    statutory     and

regulatory    criteria.     See   N.J.S.A.      34:8-48;   N.J.A.C.   13:45B-

2.1(a).     By contrast, THSFs only need to obtain registration,

which is a significantly less-stringent process than obtaining

licensure.      See   N.J.S.A.    56:8-1.1.       Defendant    asserts    that

plaintiff needed to be licensed as an employment agency — as

opposed to merely registered as a THSF — in order to bring suit

to enforce the employment contract in this case.              In support of

that argument, defendant cites to the following section of the

Act, which states in relevant part:

            The provisions of this act shall not apply to:

                 . . . .

            h. Any [THSF] which does not:

            (1) Charge a fee or liquidated charge to
            any individual employed by the firm or in
            connection with employment by the firm;

            (2) Prevent or inhibit, by contract, any of
            the individuals it employs from becoming
            employed by another person . . . .

            [N.J.S.A. 34:8-46(h).]

                                     8                                A-2847-14T4
       Defendant argues this provision means that THSFs that are

not licensed as employment agencies "are proscribed . . . from

imposing restrictive covenants on their workers and from seeking

liquidated      damages,"         and      that       contracts             between        merely

registered,     but      non-licensed,       THSFs         and       their    employees         are

unenforceable       if     they    contain        a        restrictive          covenant         or

liquidated damages provision.

       We   disagree.       We    note     that    this         is     an    issue    of    first

impression     in   this    court,       although      the       issue       was     previously

addressed by Judge Douglas Wolfson, in his well-reasoned opinion

in Logic Planet, Inc. v. Uppala, 442 N.J. Super. 488 (Law Div.

2015).       Like   the    court     in    Logic       Planet,          we    conclude          that

defendant's interpretation is contrary to the plain language of

the statute.        Nowhere in the Act does the Legislature suggest

that   registered        THSFs    cannot    include          enforceable           restrictive

covenants     and     liquidated         damages       provisions             in     employment

contracts.      Rather,      N.J.S.A.       34:8-46(h)           merely       exempts       THSFs

from   the    Act's      purview    if     they       do    not        impose      restrictive

covenants and liquidated damages provisions on their employees.

The only conclusion that can be drawn from a plain reading of

N.J.S.A.     34:8-46(h)      is    that,        because          plaintiff         included        a

restrictive    covenant      and    liquidated         damages          provision          in   the

employment     agreement     with       defendant,         it     is    subject       to    those

                                            9                                          A-2847-14T4
provisions    of   the   Act    that   apply   to    THSFs,   including      the

registration requirement.

     Plaintiff did not violate that requirement.                  Contrary to

defendant's implicit argument, the Act does not require every

entity subject to the Act to be licensed as an employment agency

in order to bring suit; rather, it requires every entity subject

to   the     Act   to    "prov[e]      licensure     or    registration,      as

appropriate, at the time the alleged cause of action arose."

N.J.S.A. 34:8-45(b) (emphasis added).              In other words, the Act

requires employment agencies to be licensed, and THSFs to be

registered, in order to bring actions to enforce contracts made

with their employees.        Had the Legislature intended to impose a

licensing requirement upon THSFs that included non-compete and

liquidated damages clauses in their contracts, it would not have

differentiated     between     those   entities     for   which   it   mandated

licensing and those for which it only mandated registration.2

     Indeed, this is precisely what has been done in the context

of other entities regulated by the Act.               See N.J.A.C. 13:45B-

13.6a (requiring licensure as a pre-requisite to health care

service    firms   charging     fees    or   liquidated     damages    in    its

2
  The pertinent regulations, adopted by the agency charged with
enforcing the Act, provide no mechanism allowing THSFs to obtain
licensure; THSFs are only provided with a means to register.
N.J.A.C. 13B:45B-12.2. By contrast, the regulations require
employment agencies to obtain a license.  N.J.A.C. 13:45B-2.1.

                                       10                              A-2847-14T4
employment   contracts).         As    the   parties   do    not   dispute      that

plaintiff    was   a    properly-registered      THSF,      the    Act   does   not

preclude plaintiff’s suit to enforce the employment agreement it

entered into with defendant.

    Therefore,         we   reverse    the   orders    granting      defendant's

motion for summary judgment and fees and denying plaintiff's

cross-motion for leave to file an amended complaint.                     We remand

for further proceedings consistent with this opinion.

    Reversed and remanded.            We do not retain jurisdiction.

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