The Lame Duck session also ended without legislation targeting independent contractors arriving on the governor’s desk.  It was a great victory for all our allies in the Coalition – especially the freelancers themselves – who called and emailed and even drove to Trenton to testify against legislation that would interfere with their very livelihood.

However, the legislation has been reintroduced in the same form as it was when released from its second Senate Labor Committee meeting, now as S863.  An assembly companion has not been pre-filed for reintroduction.

NJCJI continues to work with an impressive group of organizations and freelance workers who want to preserve the flexibility and opportunity for innovation and entrepreneurship that contract work provides.

NJCJI will be hosting a meeting on January 30^th at 12pm to discuss strategy for the coming legislative session.  Please contact Tara McCreedy if you would like to attend.  Please email Alida if you would like to discuss this issue further.

Despite last-minute changes in the Assembly Financial Institutions Committee to narrow the legislation, A4293 was pulled from the board list on the last day of Lame Duck. 

It was an impressive victory for our friends at ICNJ and the rest of our allies who spent much of this past legislative session, consistently making the case that the expansion of bad faith remedies would serve primarily to facilitate insurance fraud and impose higher premiums on consumers.

Although the senate version moved quickly and was voted out of that chamber in June of 2018, the legislation lingered in the Assembly without even a committee hearing until Lame Duck.  And when the legislation was finally released from AFI, it was limited to first party uninsured or underinsured auto policy claims.

Of course, even in that limited context the penalties would be tremendously disruptive to the insurance market, especially given the unlimited damages of the full jury verdict regardless of policy limit, plus attorney fees.  And it seemed that members were ultimately persuaded that such an extreme remedy would be a disservice to relatively low-income consumers seeking the most affordable insurance options available.

Also of note: there were suggestions during the debate over Bad Faith that the minimum policy limits required by law might be too low.  Although Senator Scutari has not pre-filed his Bad Faith legislation for reintroduction, he has reintroduced legislation that would significantly increase the minimum limits. 

Please email Alida if you would like to discuss this issue further.

The Senate President and sponsor of S4204, Senator Sweeney acknowledged obvious on Thursday, confirming that his independent contractor legislation would not be voted on in the final days of the Lame Duck session.

This legislation was introduced on the first day of Lame Duck and was widely expected to have made it to the governor’s desk.  Instead, an impressive coalition of independent contract workers, including freelance journalists, online tutors, stay-at-home moms with online graphic design businesses among others, came together to express their opposition to the legislation throughout the Lame Duck session.  The group did a phenomenal job of living to fight another day, and we look forward to continuing the collaboration. 

We anticipate that discussion on the issue will resume early in the next legislative session.  NJCJI will continue to lead coalition as we work towards a compromise that protects freedom of workers to choose to work independently.

Please email Alida if you would like to join this working group.

A4293, legislation that would expand bad faith insurance remedies was released from AFI on Thursday, with significant amendments.  The companion bill was voted out of the Senate in June of 2018, by a one vote margin.  As the Lame Duck session comes to a close Monday January 13, 2020, the amended version would now need a floor vote in the Assembly and concurring floor vote in the Senate.

The changes made to the bill as released by AFI are significant.  While the senate version would have applied to all first-party and third-party claims, the assembly version is limited to personal injury claims under uninsured or underinsured auto coverage.  The penalties for “unreasonable” settlement practices have also been modified.  Instead of treble damages, the assembly version actually provides for unlimited damages – significantly increasing the risk of going to trial with a potential bad faith claim.

The senate sponsor, Senator Scutari, testified in support of his legislation, claiming that first party claimants currently have no recourse against carriers who delay payment or offer unreasonably low settlements.  The Assembly Minority Leader, Assemblyman Bramnick, co-prime sponsor on the legislation, agreed, claiming especially in the UM/UIM context, claimants have no remedy because bad faith claims are seldom successful.

NJCJI was among those testifying against the legislation.  We pointed out that a bad faith claim is not the only remedy available for a policy holder who believes their claim is being handled unfairly.  In fact, the Offer of Judgment Rule exists for precisely this reason.  And in fact, the New Jersey Court’s Civil Practice Committee considered precisely the problem the sponsors raised, regarding settlement incentives for UM/UIM claims, and concluded a modest tweak to the Rule struck the appropriate balance.  The Committee never considered anything as drastic as the remedies provided in A4293, but rejected even the more modest proposal of automatic fee shifting, for fear that it would distort incentives and result in higher insurance premiums.

Prospects for a floor vote in Assembly and Senate remain uncertain.  Please email Alida if you would like to discuss this legislation further.

Read NJCJI full written testimony here.  Listen to testimony delivered in Committee here. (Alida Kass testimony begins at 1:13:00)

Read NJCJI written testimony on A4293 here:

California’s AB5 legislation took effect January 1, and the predictable fallout has begun.

Thousands of jobs have already been lost, as operations begin the process of moving work out of the state.  Vox alone had to get rid of 200 writers in California.  And as CNN reported, many small town papers with a limited number of writers face huge challenges and aren’t sure they can even survive without a steady number of freelance writers.

Workers are fighting back, with a number of challenges already filed, seeking injunctions against enforcement of AB5.

The California Trucking Association came first, filing in Southern District of California.  Judge Roger Benitez in San Diego issued a temporary injunction this week, as applied to truck drivers, finding a likelihood that the statute is preempted as it affects interstate trucking under the Federal Aviation Authorization Act of 1994.

Uber and Postmates have also filed an objection in U.S. District Court, Central District of California, arguing that the statute is irrational and unconstitutional as applied to workers and companies in the on-demand economy.

This complaint argues that the targeting of app-based workers and platforms, treating them disparately from traditional workers, violates the Equal Protection Clauses of the United States and California Constitutions.  The complaint argues that the law is “unconstitutional even under the most minimal ‘rational basis’ standard of judicial review.”

Finally, the Pacific Legal Foundation, has also filed on behalf of the American Society of Journalists and Authors and the National Press Photographers Association, objecting to the scope of the law, causing reduced work or outright firing of thousands of independent contractors across California.  This complaint argues that the statute violations the First and Fourteenth Amendments to the United States Constitution.  The statute singles out ASJA’s and NPPA’s members who are writers, editors, still photographers, and visual journalists by drawing unconstitutional content-based distinctions about who can freelance—limiting certain speakers to 35 submissions per client, per year, and precluding some freelancers from making video recordings.

Again, the New Jersey legislation S4204 would codify the NJ Department of Labor’s interpretation of the ABC test which is even more extreme than that adopted in California.  We continue to believe it would be advisable to permit these processes to play out before codifying new job-killing restrictions on voluntary working arrangements. 

Please contact Alida Kass if you would like to discuss this issue further.

On December 5^th, the Senate Environment Committee considered legislation that would up-end public nuisance law in the state of New Jersey.  Sponsored by Senator Ruiz, S3974 would eliminate all core public nuisance doctrinal limitations as applied to claims against manufacturers of lead paint.  But the doctrinal ramifications would have the potential to extend well beyond.  Companion legislation has been introduced in the Assembly, sponsored by Assemblyman Verrelli.

The legislation has now been released from Senate Environment and is on second reading in the Senate.  The assembly version has been referred to Assembly environment.

NJCJI testified against the legislation.  Read NJCJI written testimony here, and please reach out to Alida to discuss further.

The board list for December 16^th was released this Wednesday, and at least as of now, S4204 is not on it.  It also was not on yesterday’s Assembly Appropriations committee agenda. 

And while linked pieces of legislation, there are still several substantive differences between S4204 as released from Senate Labor on December 5^th, and the A5936 as released from Assembly Labor November 18^th.

Although advocates continue to argue that the legislation would merely codify “existing law,” it would be more accurate to say the legislation would codify the Department of Labor’s interpretation of existing law. 

However, there are substantive changes to the so-called “ABC” test that depart from the interpretation that the NJ courts have applied to the law. 

The proposed legislation eliminates language that recognizes contract work of those engaged in a “trade, occupation, [or] profession” is deleted – contract status is instead limited to an established “business or enterprise.”  While the DOL has been reversed by the courts on this point, the legislation would codify the DOL interpretation.  Such a change would affect the working arrangements of the freelance journalists, graphic design artists, speech therapists, and the host of other freelance professionals who showed up to testify against this legislation last week. 

The legislation also adds the additional restriction that the “business or enterprise” must be “of the same nature as that involved in the work performed.”  This change would affect the availability of “side gig” contract work – another point on which the Department of Labor has brought a more restrictive interpretation than the courts.  In Garden State Fireworks, for example, DOL insisted that such an arrangement “does not equate to an independently established enterprise or business.” 

Again, the appellate division rejected that interpretation as an unreasonable, arbitrary and capricious reading of the law.  The court emphasized that an individual otherwise fully employed could lose side contract work without any risk of their becoming unemployed, that it was independently established and therefore consistent with established law.  Teachers, police officers, retirees, and stay at home moms, among others rely on such side work to make extra money or just maintain contacts within their chosen profession.  S4204 would codify the rejected DOL interpretation and eliminate this flexibility.

The Department of Labor has also brought an unreasonably narrow interpretation to the requirement that work be performed “outside all the places of business” of the business – arguing that the “place of business” is essentially anywhere the worker goes to perform work.  The Court has emphatically rejected this DOL approach, pointing out that such a circular analysis would be a test no one could pass. 

But because the proposed legislation requires that the satisfaction of the “ABC” test meet with “the satisfaction of the Commissioner of Labor” – it functions essentially as a new grant of rulemaking authority, creating a fresh statutory basis to implement its preferred interpretation.  The DOL interpretation on “place of business” would affect a wide array of contract work, from the live band that plays at The Stone Pony to the wedding photographer whose work inescapably must be done at the wedding in question. 

In short, the proposed legislation does far more than simply codify existing law.  But we welcome the opportunity to work on language that would actually accomplish the stated objectives, preferably in the next legislative session. 

S4204, legislation which would amend the ABC test for misclassification in the Unemployment Insurance and Temporary Disability Law, and expand it into NJ Wage and Hour laws was heard for the second time in the Senate Labor Committee yesterday. The Misclassification bill was first heard in November at start of the Lame Duck session, at that point, modeled on the controversial California AB5 legislation.

Phone calls and emails to legislators’ offices have been pouring in ever since. And in response to the massive, widespread opposition, the legislation was amended in the Assembly Labor Committee, though the amendments accomplish the same objectives, by other means.

So in an unusual procedural move, S4204 was then recommitted to Senate Labor for a re-hearing, and to adopt the Assembly changes. And this time, the workers themselves showed up to oppose the legislation, with several signing up to testify. The committee room was filled with an array of freelance journalists, graphic design artists with home-based businesses, teachers who do online tutoring in off-hours, and other workers in the gig economy.

Labor Committee Chairman Sen. Fred Madden heard from everyone who had signed up to testify, and the hearing lasted for four hours.

The Senate President opened the discussion, testifying to defend his bill against the onslaught of opposition, arguing that it simply “codified existing regulations.” NJCJI President Alida Kass was called up next, on a panel with three freelance journalists. Alida explained that the proposed legislation actually made substantive changes to existing law, that it codified the DOL’s controversial interpretation of existing law, which has thus far been losing in Appellate Division challenges, and that enacting a new statute would grant DOL new rulemaking authority to implement its interpretation which has been used to crush entrepreneurs and the innovation economy.  Click here for a copy of NJCJI’s proposed amendments.

The legislation was released on a party-line vote, though even Democratic senators expressed concern and reservations about the proposal.

NJCJI continues to lead a coalition of trade associations, businesses, and freelance independent contract workers in opposition to the legislation.

A room has been reserved for a Press Conference on December 12^th. Please reach out to Alida if you would like to join the coalition or to discuss further.

S1766, which would expand causes of action in wrongful death cases to include mental anguish and emotional pain and suffering, did not receive a Senate Budget and Appropriations committee vote yesterday.  After a two hour delay, NJCJI was told just prior to the committee starting that the bill would not be discussed and would not be released from committee.

The legislation was last heard in the Senate Judiciary Committee in April 2018, with Committee Chair and bill sponsor Sen. Nick Scutari not permitting any testimony. The bill was second-referenced to the Budget and Appropriations Committee for further discussion.

The discussions over the Wrongful Death bill were also taking place against the backdrop of a four-hour committee hearing on the Senate President’s Worker Misclassification bill (S4204).  (More on this in the second newsletter story).  NJCJI has also been working closely with ICNJ and other members to oppose an effort to move legislation to expand Bad Faith remedies in Lame Duck.