In a significant victory for our client, the Superior Court of New Jersey denied Zimmer Biomet Holdings, Inc.’s motion for summary judgment in a serious injury case arising from a crash involving one of Zimmer’s sales representatives. Zimmer tried to get out of the case by arguing that the representative was not its employee, but rather a 1099 independent contractor. The court rejected Zimmer’s attempt to end the case before trial, holding that the nature of the relationship between Zimmer and its representative must be decided by a jury.
The case arises from a September 14, 2023 motor vehicle collision at the intersection of Route 23 South and Paradise Road in West Milford, New Jersey. Zimmer’s representative had left a doctor’s office visit when he ran a red light and struck our client’s vehicle, causing devastating injuries. Zimmer moved for summary judgment, arguing that it could not be held responsible because the representative had signed an Independent Sales Representative Agreement stating that he was an independent contractor, not an employee.
The court properly recognized that the label in a contract is not the end of the analysis. A company cannot avoid responsibility simply by inserting the words “independent contractor” into an agreement. The real question is how the relationship functioned in the real world. Did Zimmer control the work? Did Zimmer define the territory? Did Zimmer decide what products could be sold? Did Zimmer enforce policies and procedures? Did the representative operate a truly independent business, or was he part of Zimmer’s sales operation in every practical sense?
The court relied on substantial evidence from which a jury could conclude that Zimmer exercised meaningful control over the representative. The representative had previously been a Zimmer employee before being converted to 1099 status and his duties did not meaningfully change after that conversion. Namely, he continued to sell Zimmer products, remained subject to Zimmer’s rules and policies, worked within a Zimmer-defined territory, and was assigned to Zimmer’s “Team West Jersey.” Zimmer also controlled the product lines he could sell and maintained the power to discipline or terminate the relationship. Moreover, Zimmer constructed the team on which the representative worked, controlled the geographic area in which he sold, limited the products he could sell, required compliance with Zimmer policies, and could end the relationship on short notice. In other words, the paper label did not erase the practical reality of the relationship.
That is why this ruling is important beyond this single case. Across New Jersey and across the country, companies are increasingly shifting workers into 1099 status. The financial incentive is obvious. By classifying workers as independent contractors, companies may attempt to avoid payroll taxes, unemployment contributions, workers’ compensation obligations, overtime rules, paid leave, employee benefits, and other costs associated with having an actual workforce. But those savings often come at someone else’s expense: the worker, the taxpayer, law-abiding businesses, and members of the public injured by people performing company work.
This case illustrates the danger of allowing form to defeat substance. If a company can control the work, control the territory, control the products, control the policies, benefit from the sales, and then disclaim responsibility because a contract says “1099,” then corporate accountability becomes optional. The court’s ruling prevents that kind of end-run around responsibility. It allows a jury to examine the actual facts and decide whether the representative was independent in name only.
New Jersey’s recent action on worker classification reinforces the importance of this issue. On May 5, 2026, the New Jersey Department of Labor and Workforce Development announced that it had adopted new regulations clarifying the statutory ABC test for determining whether a worker is an employee or an independent contractor. The Department explained that the new rules are intended to provide clear standards, protect legitimate independent contractors, create a level playing field for businesses, and offer transparent enforcement guidance.
Under the ABC test, the burden is on the putative employer to prove all three prongs. First, the worker must be free from control or direction over the performance of services, both under the contract and in fact. Second, the work must be outside the usual course of the company’s business, or performed outside all of the company’s places of business. Third, the worker must be customarily engaged in an independently established trade, occupation, profession, or business.
That framework is critical because it focuses on reality, not labels. A true independent contractor usually operates an independent business, serves multiple clients, controls how the work is performed, bears entrepreneurial risk, and is not simply folded into the company’s regular operations. By contrast, when a company dictates the worker’s territory, limits what the worker can sell, requires compliance with company rules, controls the customer relationships, and uses the worker as part of its ordinary business, the “independent contractor” label deserves close scrutiny.
The Department of Labor’s 2026 announcement also emphasized that the new regulations synthesize decades of New Jersey case law, including the New Jersey Supreme Court’s decisions in East Bay Drywall and Carpet Remnant Warehouse. The Department stated that the goal is not to eliminate legitimate independent contracting, but to protect workers’ rights and prevent businesses that misclassify workers from gaining an unfair competitive advantage over companies that follow the law.
That same policy concern is at the heart of this case. Zimmer’s position would have allowed a large corporation to benefit from a sales representative who operated within its system, while avoiding accountability by pointing to a 1099 agreement. The court declined to allow that shortcut. Instead, it held that the jury should hear the evidence and decide what the relationship really was. For injured people, workers, and responsible businesses, this decision matters and recognizes that the truth of a working relationship is found in the facts, not in the fine print.
