On May 13, 2024, the New Jersey Supreme Court in Kennedy, II v. Weichert Co., (A-48/49-22) (No. 087975), N.J. (slip op.) held real estate salespersons to be independent contractors under certain circumstances. Specifically, the Court explained that a written agreement between a real estate salesperson and a real estate broker which defined the salesperson as an independent contractor is controlling in determining whether the realtor is an employee or independent contractor. In doing so, the Court established that under the New Jersey Real Estate License Act (the Brokers Act), a written agreement between a real estate salesperson and broker will override any other applicable rules or regulations analyzing the nature of their relationship. Thus, the ABC test, a three-pronged analysis typically used by the New Jersey Department of Labor and Workforce Development to determine the nature of a worker’s relationship with their employer, does not apply to relationships between real estate brokers and real estate salespersons if they have a written agreement establishing the terms of employment.

Please Note: While the Kennedy Court found the written agreement to be determinative as to independent contractor status, this is typically not the case where courts are analyzing independent contractor vs employee status. Rather, in cases of this sort, courts generally find that the written agreement is not determinative but, instead, is just one of several factors to be considered.

The author thanks Summer Law Clerk, Madeline Humphrey, for her assistance with this article.