Foley & Lardner LLP successfully represented Weichert Realtors in a significant ruling by the New Jersey Supreme Court. The court unanimously held that the contract between a real estate agent and their broker, designating the agent as an independent contractor, prevails over other tests in resolving claims of improper wage deductions.
Prior court rulings had applied the ABC test to such determinations. As a result of regulatory requirements designed to protect the consumer, it would have been challenging to satisfy the ABC test and maintain their traditional independent contractor relationship. The ruling instead clarifies the authority of written agreements between brokers and salespersons under the Brokers Act, stating that such agreements take precedence over other laws or regulations. The decision also provides clarity for the real estate industry, protecting the autonomy of brokers and salespeople in defining their professional relationships. It is likely to have an application outside of the wage payment context, including in defining the relationship for overtime and employment claims.
John Birmingham, Foley partner and lead attorney for Weichert, commented that the company is pleased with the New Jersey Supreme Court’s conclusion and that the ruling “recognizes and effectuates the Legislature’s intent that real estate brokers and salespeople can decide the nature of their relationship.”
“Weichert is also grateful that after five years of litigation, the real estate industry now has clarity on this important issue,” Birmingham added.
The Foley team representing Weichert was led by partner John Birmingham and included partner Jennifer Keas and senior counsel Katelynn Williams, with support from partner Jay Varon and associate McKenzie Ahmet.
