State News : New Jersey

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New Jersey



Under the New Jersey Workers’ Compensation Act, the independent contractor defense is seldom successful, but one area where the defense is still viable is in the horse racing industry as seen in the recent decision of Perry v. Robert Horowitz Stable, A-3845-12T2 (App. Div. December 9, 2014). 


Randolph Perry was a licensed horse owner and trainer and agreed to train horses for Robert Horowitz Stable (hereinafter “Horowitz”) at the Meadowlands Race Track.  In January 2004, he slipped on a patch of ice and was seriously injured.  He filed  a workers’ compensation claim against Horowitz.  He also recovered a substantial third party suit against the Meadowlands Race Track.  In the workers’ compensation trial, Perry argued that under both the control test and the relative nature of the work test, the court must find employment. 


Perry argued that Horowitz controlled his duties sufficient to render him an employee.  He said that Horowitz would specify how many miles the horses would run, how to care for the horses’ feet, and how much the horses were to be fed.  In response, Horowitz argued that the stable did not have an ongoing training relationship with Perry.  While Horowitz did provide instructions related to the amount of miles to jog the horses and how to care for their feet, Horowitz countered that Perry had discretion to control other aspects of training.


Horowitz further contended that it did not furnish any equipment or stalls, nor provide Perry with food to feed the horses.  Horowitz said that the stable did not specify the type of food needed.  Rather, Perry would buy the food himself.  Horowitz further argued that Perry disregarded his instructions on how much food to provide and in fact provided less food because of Perry’s view that horses should not eat as much food as Horowitz required.  


Perry maintained that he was substantially dependent on Horowitz under the relative nature of the work test.  However, it was noted in the record that Perry worked with many different owners for income over his 40-year career


The Judge of Compensation found for Perry on employment, but the Appellate Division reversed.  The court noted that Perry did not receive a W-2 or 1099 from any of the owners for whom he trained horses.  He was not paid a specific wage, and there were no deductions or withholdings from Perry’s pay.  It said,  “This is indicative of an independent contractor.”  The court also relied on the fact that Perry rented stalls directly from the Meadowlands Racetrack where he performed his work.  It said this too was consistent with being an independent contractor because it shows Perry carried on his own business.  The court felt that Perry used his own methods to run his business. 


There was one specific item of testimony that the court focused on in its opinion in favor of independent contractor status.  At trial Perry testified, “If I needed the money, I would [train the horses] for less.  If I didn’t need it, I would charge more.”  The court suggested that this was proof of an independent business, not employee status.  For much the same reasons, the court also found that Perry was not an employee of the New Jersey Horse Racing Injury Compensation Board. 


This decision could clearly have gone either way.  The Appellate Division focused on the facts that tended to show Perry was running his own business together with the absence of a W-2 or 1099, but there were clearly some elements of control that favored Perry’s argument on employment.  The Appellate Division decision does not disclose how much money Perry earned from Horowitz as opposed to other trainers, nor how many days he trained horses for Horowitz.   What is more clear is that a jockey would have a much stronger argument for employment than a horse trainer would because of the predominance in New Jersey of the relative nature of the work test.