Docket No.: ESX-L-001847-26

Plaintiff's Brief in Support of
Motion for Partial Summary Judgment on Prong B

Preliminary Statement

Plaintiff Jamal T. Washington moves for partial summary judgment on a single, discrete legal question: whether NovaStream Logistics, LLC can satisfy Prong B of New Jersey's ABC Test as a matter of law.

Prong B requires that the worker's services be performed "either outside the usual course of the business for which such service is performed, or... outside of all the places of business of the enterprise." N.J.S.A. 43:21-19(i)(6)(B). See ABC Test Reference.

NovaStream is a delivery company. Its sole business is providing delivery services to retailers. Mr. Washington performed delivery services. There is no genuine dispute about these facts. Under any reasonable interpretation of "usual course of business," delivery is the usual course of a delivery company's business.

This motion does not ask the Court to resolve the entire classification question. Prongs A and C involve factual disputes that may require trial. But Prong B is pure legal analysis applied to undisputed facts. Because NovaStream cannot satisfy all three prongs, and because Prong B is independently dispositive, the Court should grant partial summary judgment establishing that NovaStream's drivers are employees as a matter of law.

Statement of Undisputed Material Facts

The following facts are established by the record and are not genuinely disputed:

1. NovaStream Logistics, LLC describes itself as "a logistics company that provides 'last-mile' delivery services to e-commerce retailers throughout northern New Jersey." (Complaint ¶ 7; Answer ¶ 7.)
2. NovaStream's CEO, Priya Sharma, testified that "essentially all" of NovaStream's revenue comes from delivery services. (Sharma Dep. at 54:3-8.)
3. Ms. Sharma further testified that "without drivers performing deliveries, NovaStream would have no revenue." (Sharma Dep. at 54:15-18.)
4. Mr. Washington performed delivery services for NovaStream from March 2025 through September 2025. (Undisputed.)
5. Mr. Washington completed approximately 2,843 deliveries for NovaStream. (Payroll Records, Ex. A.)
6. NovaStream does not manufacture products, operate retail stores, or provide any service other than logistics and delivery. (Sharma Dep. at 8:12-20.)
7. NovaStream's website describes the company as "Delivering the future, one package at a time" and advertises "last-mile delivery solutions" to retailers. (Ex. B, website printout.)
8. NovaStream's investor pitch deck describes the company's "core value proposition" as "AI-optimized last-mile delivery." (Ex. C, pitch deck at 3.)

Legal Standard

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c).

In reviewing a summary judgment motion, the court must view the evidence in the light most favorable to the non-moving party. Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995). However, when the moving party demonstrates the absence of a genuine dispute, the non-moving party must "come forward with evidence that creates a genuine issue of material fact." Id. at 529.

Legal conclusions applied to undisputed facts are appropriate for summary judgment. See Globe Motor Co. v. Igdalev, 225 N.J. 469, 479 (2016) ("where there is no factual dispute, the legal consequence that flows from established facts raises a question of law").

Argument

I. The ABC Test Requires Satisfaction of All Three Prongs

New Jersey applies the ABC Test to determine worker classification for purposes of unemployment compensation, the Wage Payment Law, and the Wage and Hour Law. Hargrove v. Sleepy's, LLC, 220 N.J. 289, 316 (2015).

Under the ABC Test, a worker is presumed to be an employee unless the putative employer proves all three of the following:

(A) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and

(B) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

(C) Such individual is customarily engaged in an independently established trade, occupation, profession or business.

N.J.S.A. 43:21-19(i)(6).

The burden rests with the putative employer to satisfy each prong. Hargrove, 220 N.J. at 304. Failure on any single prong results in employee classification. Id. at 305.

II. NovaStream Cannot Satisfy Prong B as a Matter of Law

A. The Plain Language of Prong B Compels This Result

Prong B requires that the worker's services be performed "either outside the usual course of the business... or... outside of all the places of business of the enterprise."

The analysis is straightforward. NovaStream's business is delivery. Mr. Washington performed deliveries. Delivery is not "outside the usual course" of a delivery company's business - it IS the usual course of business.

The New Jersey Supreme Court addressed analogous facts in Carpet Remnant Warehouse, Inc. v. Department of Labor, 125 N.J. 567 (1991). There, the Court held that carpet installers could not satisfy Prong B when working for a company in the business of selling and installing carpet. The installers performed the company's core function. Id. at 590.

Similarly, in Hargrove, the Court examined mattress delivery drivers who worked for a mattress retailer that advertised delivery services. The Court noted that delivery was "integral to Sleepy's business model" and that customers expected delivery as part of their purchase. 220 N.J. at 310. The Court did not separately analyze Prong B because the case was certified on other grounds, but its description of the work relationship demonstrates how the analysis applies.

Most recently, in East Bay Drywall, LLC v. Department of Labor, 251 N.J. 477 (2022), the Court addressed drywall installers working for a drywall company. While the Court ultimately found that some workers satisfied all three prongs based on their particular circumstances (they operated genuine independent businesses serving multiple clients), the Court confirmed that workers performing the putative employer's core business function face the steepest burden on Prong B. Id. at 498.

B. NovaStream Cannot Escape by Calling Itself a "Technology Company"

NovaStream may argue that it is a "technology company" or "platform" rather than a delivery company, and that therefore delivery services are "outside" its usual course of business.

This argument fails for three reasons.

First, NovaStream's own CEO admitted under oath that "essentially all" of the company's revenue comes from delivery services and that "without drivers performing deliveries, NovaStream would have no revenue." (Sharma Dep. at 54:3-8, 54:15-18.) A company whose entire revenue derives from delivery services is a delivery company, regardless of what label it applies to itself.

Second, the relevant inquiry under Prong B is economic reality, not corporate self-description. See Hargrove, 220 N.J. at 306 ("courts must look beyond the words of a contract or label to determine the true nature of the relationship"). NovaStream contracts with retailers to deliver packages. It charges retailers for delivery. Its customers - both retailers and end consumers - understand NovaStream as a delivery service. The fact that NovaStream uses an algorithm to optimize routes does not transform it into a technology company any more than a taxi company using a dispatch radio becomes a telecommunications company.

Third, allowing companies to evade Prong B by characterizing themselves as "platforms" or "technology providers" would swallow the rule. Every modern business uses technology. If the mere presence of an app or algorithm placed a company outside the "delivery business," then Uber would not be a transportation company, DoorDash would not be a delivery company, and Amazon would not be a retailer. Such characterizations defy common sense and economic reality.

C. The Alternative "Outside All Places of Business" Prong Does Not Save NovaStream

Prong B provides an alternative: the worker's services must be performed "outside of all the places of business of the enterprise."

NovaStream cannot satisfy this alternative either. Mr. Washington picked up packages at NovaStream's designated facilities and delivered them to NovaStream's customers. He used NovaStream's app throughout the delivery process. He was tracked by NovaStream's GPS system. His work was integrated into NovaStream's operations at every stage.

Courts have consistently held that remote or mobile work does not automatically satisfy the "places of business" prong. See Carpet Remnant Warehouse, 125 N.J. at 590 (installers working at customer homes still performed work within the enterprise's "places of business" because the locations were where the company's business was conducted).

The relevant question is whether the worker performed services at locations where the putative employer's business was conducted. NovaStream's business was conducted wherever its packages were picked up and delivered. Mr. Washington worked at those locations.

III. Partial Summary Judgment Is Appropriate

Because NovaStream cannot satisfy Prong B as a matter of law, and because all three prongs must be satisfied for independent contractor status, Mr. Washington is an employee of NovaStream as a matter of law.

Plaintiff acknowledges that Prongs A (control) and C (independently established business) present factual disputes that may require trial. However, those disputes are immaterial if Prong B is dispositive.

Partial summary judgment on Prong B would streamline the remaining proceedings. Rather than devoting trial time to disputed questions of control and business independence, the parties could focus on damages.

Conclusion

For the foregoing reasons, Plaintiff respectfully requests that the Court grant partial summary judgment establishing that NovaStream cannot satisfy Prong B of the ABC Test as a matter of law, and therefore that Jamal T. Washington was an employee of NovaStream Logistics, LLC during his tenure with the company.

Dated: April 15, 2026