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Appellate Division Finds That Horse Trainer Was An Independent Contractor, Not Employee Of The Horse Owner

By on December 18, 2014 in Key Defenses with 0 Comments

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.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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