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AC&C Dogs, LLC v. New Jersey Department of Labor
Citations: 332 N.J. Super. 330; 753 A.2d 737; 2000 N.J. Super. LEXIS 267
Court: New Jersey Superior Court Appellate Division; July 5, 2000; New Jersey; State Appellate Court
The court, led by WEFING, J.A.D., reversed the Commissioner of Labor's decision that found AC&C Dogs, LLC and AC&C Dogs, Inc. liable for certain unemployment taxes, focusing on the issue of tax payment responsibility rather than the amount owed. The Department of Labor's evidence, presented through auditor Richard Simmons, was limited and included significant hearsay that the Administrative Law Judge (ALJ) excluded. AC&C, which operates in Atlantic City by renting hot dog carts to licensed vendors, provided testimony from its principal and a vendor. The City enforces strict regulations on vending, including licensing requirements for vendors, which must be honorably discharged veterans, and location restrictions for sales. There is a cap of 125 active vending licenses, yet over 400 individuals hold licenses, a discrepancy unexplained in the record. Vendors are assigned designated vending locations on a rotational basis and have flexibility in pricing and menu offerings. AC&C provides carts equipped with supplies but does not mandate vendors to source their food from them, allowing vendors to choose their suppliers and offerings. Other businesses also supply hot dog carts, giving vendors multiple options for cart rental. Vendors operating hot dog carts supplied by AC&C are not identified to consumers as affiliated with AC&C and do not receive any competitive advantage from using AC&C's carts. AC&C lacks control over the vendors' business operations or locations, which are regulated by the City. Many vendors work part-time due to other commitments or personal choices. An Administrative Law Judge (ALJ), supported by the Commissioner of Labor, determined that AC&C must make unemployment tax payments for the vendors, having not demonstrated exemption under the 'ABC' test from N.J.S.A. 43:21-19(i)(6). This statute defines employment unless it is shown that (A) the individual is free from control, (B) services are outside the usual business course, or (C) the individual is engaged in an independent trade. The ALJ found AC&C met condition (A) but failed to satisfy (B) and (C). However, the reviewing body deemed the ALJ's analysis flawed, arguing that the statute's language implies responsibility is based on remuneration flowing from employer to employee, which is not the case here. AC&C does not sell hot dogs directly to the public and is prohibited from vending according to Atlantic City Code. The revenue generated comes from vendors' direct sales to consumers, with AC&C receiving a rental or combined rental and supply charge. Consequently, the reviewing body concluded that vendors do not provide services to AC&C for remuneration, absolving AC&C of unemployment tax obligations. The decision was reversed, and the Department of Labor issued separate assessments against AC&C Dogs, LLC and AC&C Dogs, Inc., which were consolidated at the hearing, suggesting AC&C Dogs, LLC is a successor to AC&C Dogs, Inc.