Unemployment Appeals

New Jersey Court Finds the Board of Review Again Misapplies Severe Misconduct Standard

August 1, 2015 | Smith Eibeler LLC

For the second time this year, the New Jersey Appellate Court has reverse and remanded a Board of Review decision disqualifying a claimant from receiving New Jersey unemployment benefits on the basis of severe misconduct. This is yet another reminder how necessary it is for the New Jersey legislature to enact a clear definition of what constitutes severe misconduct under New Jersey unemployment law.

In 2010, the New Jersey legislature created a new classification of misconduct called severe misconduct. Prior to 2010, there were only two types of misconduct, which were gross misconduct and misconduct (which was changed to simple misconduct with the enactment of severe misconduct). Gross misconduct occurs when an individual is terminated because they committed a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice. Simple misconduct occurs when an individual is terminated because he or she committed an act that is “improper, intentional, connected with one’s work, malicious, and within the individual’s control, and is either a deliberate violation of the employer’s rules or a disregard of standards of behavior which the employer has the right to expect of an employee.”

In creating the new classification, the legislature did not define “severe misconduct.” Instead, the 2010 amendment sets forth a list of examples of what constitutes severe misconduct, which includes the catch-all example, “where the behavior is malicious and deliberate but is not considered gross misconduct.” This “malicious and deliberate” catch-all example is, in fact, a lesser standard than the definition of simple misconduct, which has been the cause of the Department of Labor’s confusion and as to how to apply the law for over the last three years.

Proposed Bill Limits New Jersey Employers’ Ability to Restrain Ex-Employees Based on Unemployment Benefits Eligibility

March 16, 2014 | Smith Eibeler LLC

A new bill has been introduced to the New Jersey legislature that would invalidate any contract not to compete, not to disclose and/or not to solicit between employers and former employees if it is determined that the employee is eligible for unemployment benefits. The bill [A-3970] if passed, would not apply to any contract not to compete, not to disclose and/or not to solicit, that was in effect prior to when the bill is enacted.

The current law in New Jersey allows employers to enforce an agreement not to compete, not to disclose and/or not to solicit if the agreement protects a legitimate interest of the employer. Courts have held that, in certain circumstances, employers have a legitimate interest in protecting things such as trade secrets, confidential business information and customer relationships. In order to enforce a restrictive covenant, the terms of the not to compete, not to disclose and/or not to solicit clause must be reasonable, not impose an undue hardship on the employee and not be injurious to the public. Courts will not enforce agreements not to compete, not to disclose and/or not to solicit if the restriction is unreasonable. New Jersey courts have repeatedly held that employers do not have a legitimate interest in restricting competition. This is because New Jersey has a strong public policy affording individuals the right to pursue one’s profession and livelihood. When determining whether a restrictive covenant is enforceable, New Jersey courts will analyze the specific facts and circumstances of the employee’s former employment and new employment, along with the specific terms of the restrictive covenant.

If A-3970 becomes law, an employee would be relieved from any contractual obligation not to compete, not to disclose and/or not to solicit if they are found to be eligible for unemployment benefits. An employee is eligible for unemployment benefits if they become unemployed due to not fault of their own. Most disqualifications for unemployment benefits are because the employee either left work voluntarily without good cause attributable to the work or was involuntarily terminated for committing an act of misconduct. The three types of misconduct are gross misconduct, simple misconduct and severe misconduct. Gross misconduct is when an employee is terminated because they committed a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice. Simple misconduct occurs when an employee is terminated because of improper, intentional, connected with one’s work, malicious and within the applicant’s control and is either a deliberate violation of his or her employer’s rules or a disregard to standards of behavior that the employer has the right to expect of the applicant. There currently is no statutory definition for severe misconduct, but there is a bill pending to correct this oversight by the legislature. The Appellate Division has interpreted severe misconduct to be a gap-filler between simple misconduct and gross misconduct.

What constitutes “Severe Misconduct” under New Jersey Unemployment Law?

July 31, 2013 | Smith Eibeler LLC

In 2010, the New Jersey legislature amended New Jersey Unemployment Benefits law to include a new basis for disqualification of benefits called “severe misconduct”. Prior to the change in law, a claimant could be denied from receiving unemployment benefits if he or she was terminated for “misconduct” or “gross misconduct.” Misconduct is defined by the regulations as an act that is “improper, intentional, connected with one’s work, malicious, and within the individual’s control, and is either a deliberate violation of the employer’s rules or a disregard of standards of behavior which the employer has the right to expect of an employee. Gross misconduct is defined by law as a termination caused by the claimant as a committing a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice.

While adding “severe misconduct” as a new basis for unemployment benefits disqualification, the Legislature did not define what “severe misconduct” means, and instead set forth a non-exclusive list of examples of what could be severe misconduct. These examples include “repeated violations of an employer’s rule or policy; repeated lateness or absences after the applicant receives a written warning from their employer; falsification of records; physical assault or threats that do not constitute gross misconduct; misuse of benefits or sick time; abuse of leave; theft of company property; excessive use of drugs/alcohol on the job; theft of time; or where the behavior is malicious and deliberate but is not considered gross misconduct.

Since the amendment to the unemployment law, our New Jersey unemployment lawyers have seen far too many cases in which the lack of a clear definition of severe misconduct has resulted in an unjust and unfair result for our clients. A lot of confusion for Appeal Tribunal examiners stems from the fact that last statutory example of severe misconduct (where the behavior is malicious and deliberate but is not considered gross misconduct) is in fact a lesser standard than the regulations definition of misconduct.

NEW JERSEY BILL LOOKS TO FINALLY DEFINE THE DIFFERENCE BETWEEN “SIMPLE MISCONDUCT” AND “SEVERE MISCONDUCT” IN NEW JERSEY UNEMPLOYMENT COMPENSATION LAW

November 30, 2012 | Smith Eibeler LLC

In 2010, Governor Christie and the New Jersey state legislature revised New Jersey Unemployment Compensation Law to include a new “severe misconduct” standard to disqualify certain employees from receiving unemployment benefits. Because of the ambiguity of the statutory revisions to the revised law, New Jersey unemployment lawyers, claims examiners, employers and employees have been left without clear guidance as the difference between being terminated for “severe misconduct” versus the “simple misconduct.”

The revised New Jersey Unemployment Compensation Law did not change the definition of simple misconduct. Simple misconduct is defined as actions that are improper, intentional, connected with one’s work, malicious and within the applicant’s control and is either a deliberate violation of his or her employer’s rules or a disregard to standards of behavior that the employer has the right to expect of the applicant. A simple misconduct disqualification will prevent an applicant from receiving unemployment benefits for the week of the termination and the subsequent seven weeks.

The major change contained in the revised legislation was to include a new “severe misconduct” category for disqualification of unemployment benefits. Under the revised law, being terminated for “severe misconduct” will disqualify a claimant from receiving unemployment benefits indefinitely or until he or she becomes re-employed, works for four weeks, earns at least six times their weekly benefit amount and is terminated from that employment due to no fault of their own. The problem with the enactment of the new “severe misconduct” standard is that it is completely void of a definition of what constitutes “severe misconduct.” Instead, the revised statute only sets forth “examples” of “severe misconduct” that include the following: repeated violations of an employer’s rule or policy, repeated lateness or absences after the applicant receives a written warning from their employer, falsification of records, physical assault or threats that do not constitute gross misconduct, misuse of benefits or sick time, abuse of leave, theft of company property, excessive use of drugs/alcohol on the job, theft of time, or where the behavior is malicious and deliberate but is not considered gross misconduct.

Being Told of Likely Termination Is Not Considered Good Cause to Quit and Receive New Jersey Unemployment Benefits

November 15, 2012 | Smith Eibeler LLC

The New Jersey Appellate Division recently affirmed the Board of Review’s decision denying claimant, Ms. Nzinga Jackson, New Jersey unemployment benefits, finding she left work voluntarily without good cause attributable to the work. In Ms. Jackson’s initial hearing, the Deputy Director found that Ms. Jackson’s resignation from her position because her union representative told her she would be laid off from work did not constitute voluntarily leaving for good cause attributable to the work. Ms. Jackson appealed the Deputy’s determination. The Appeal Tribunal and subsequently the Board of Review affirmed the Deputy’s decision.

In the case, Jackson v. Board of Review, Ms. Jackson worked for Verizon New Jersey, Inc. (“Verizon”) from February 25, 2008 through September 4, 2010 as a customer service representative. Ms. Jackson accepted a voluntary severance package when her union representative informed her that she would most likely be laid off in the future because of her lack of seniority. Based on that information, Ms. Jackson accepted the severance package and resigned. Ms. Jackson did not confirm that she was going to be laid off with Human Resources or any other Verizon representative. In fact, Verizon did not lay off any employees because an “overwhelming” number of employees voluntary accepted the separation package.

Affirming the Deputy’s initial determination denying Ms. Jackson’s benefits, the Appeal Tribunal rejected Ms. Jackson’s argument that she did not leave work voluntarily without good cause attributable to the work. The Appeal Tribunal stated that acceptance of a voluntary severance package is a valid reason for leaving the job, however it is a personal reason and is not connected to the work itself. During the appeal hearing, the customer service manager testified that Ms. Jackson was not under any direct threat of being laid off if she did not accept the package and continuing work was still available at the time she resigned. Ms. Jackson alleged that she would have been laid off in May 2011, approximately nine (9) months after her voluntary resignation.

Employee Required to Repay New Jersey Emergency Unemployment Compensation Benefits

October 15, 2012 | Smith Eibeler LLC

The New Jersey Appellate Division recently affirmed the Board of Review’s decision requiring claimant, Anthony M. Cibik, to refund extended Emergency Unemployment Compensation (EUC) received, totaling $14,600.

In the case, Cibik v. Board of Review, Mr. Cibik worked for a company that was acquired by HDR, Inc. (HDR). Mr. Cibik worked for HDR for about one and a half years until his position was terminated in August 2009. Initially, Mr. Cibik worked in HDR’s New Jersey location. Around June or July 2008, Mr. Cibik relocated and was transferred to an HDR location in Oregon. He worked at the Oregon location from that time up until his termination.

Upon his termination, Mr. Cibik applied for unemployment benefits in New Jersey. He was found eligible for unemployment benefits in New Jersey because most of his wages during his employment with HDR were from working at the New Jersey location. Mr. Cibik received a total of twenty six (26) weeks of unemployment benefits. Mr. Cibik then received New Jersey EUC benefits from February 20, 2010 to August 7, 2010 totaling $14,600. However, Mr. Cibik was entitled to receive unemployment compensation benefits from Oregon starting on February 10, 2010. Mr. Cibik was unaware of his eligibility to receive such unemployment benefits in Oregon at the time he filed for New Jersey EUC benefits. On August 18, 2010, Mr. Cibik received a letter from the Director of the New Jersey Division of Unemployment Compensation requesting refund of all monies received through New Jersey EUC.

Employee Disqualified from Receiving Unemployment Benefits for Failing to Adhere to Employer’s Call Out Procedure

September 15, 2012 | Smith Eibeler LLC

The New Jersey Appellate Division recently affirmed a Board of Review’s decision denying claimant, Mr. John M. Custin, from receiving unemployment benefits, finding that he engaged in misconduct connected with the work. Mr. Custin was found eligible for unemployment benefits in the initial hearing however, his employer appealed. The Appeal Tribunal reversed the initial determination finding Mr. Custin eligible for benefits and found that Mr. Custin was disqualified. The Board of Review affirmed that decision.

In the case, Custin v. Board of Review, Mr. Custin worked for Walmart Stores Inc. (“Walmart”) from April 11, 2008 through April 26, 2010 as a sales associate. Mr. Custin did not report to work on April 17, 19, 21, 22, and 23 because of pain in his legs that rendered him unable to get out of bed. Walmart’s policy required employees to call an employee hotline and get a verification number as proof that the employee followed the correct procedure to call out of work. Mr. Custin asserted that he did call the hotline but was unable to get a verification number because the hotline was not working properly.

Mr. Custin was first found eligible for unemployment benefits on May 13, 2010, however, Walmart appealed that determination. During the appeal hearing, Ms. Beverley Shuck, Mr. Custin’s former manager, testified that Mr. Custin was terminated because he was a “no call, no show,” on April 17, 19, 21, 22, and 23. Ms. Shuck testified that employees were fully aware of the call out procedure. Ms. Shuck also testified that Mr. Custin had called out in the past, using the correct procedure however, when she asked him why he did not call out in this instance, he stated “that his legs hurt and he figured if he couldn’t walk he couldn’t work.” Ms. Shuck further testified that employees who were absent more than three days were required to provide a doctor’s note pursuant to Walmart’s leave of absence policy. Mr. Custin denied being aware of such policy.

QUITING WORK DUE TO DISSATISFACTION WITH COMPENSATION DISQUALIFIES CLAIMANT FROM RECEIVING NEW JERSEY UNEMPLOYMENT BENEFITS

July 30, 2012 | Smith Eibeler LLC

The New Jersey Appellate Division recently affirmed the Board of Review’s decision denying claimant, Ms. Samantha Monday, from receiving unemployment benefits because she left her employment voluntarily without good cause attributable to the work. Ms. Monday was denied unemployment benefits in the initial hearing. However, on appeal, the Deputy determined that being paid less than the national average rate of pay for similar work constituted cause attributable to the work and awarded unemployment benefits. The employer appealed the Deputy’s award of benefits and the Appeal Tribunal concluded that the employer’s failure to give Ms. Monday a raise immediately upon her request, absent a contractual obligation, did not support a claim for unemployment benefits for voluntarily leaving employment with good cause attributable to the work. The Board of Review and the Appellate Division subsequently affirmed that determination.

In the case, Monday v. Board of Review, Ms. Monday began her employment with Mohn’s Florist as a floral designer from May 2004 through May 2009. Ms. Monday also became the shop’s retail manager during the course of her employment. Ms. Monday claimed that she left her job because she needed to make at least $22 per hour and spoke with the owners at least five times regarding her dissatisfaction with her rate of pay. Ms. Monday demanded a raise from Ms. Cochrane, co-owner of Mohn’s Florist on the day she left her employment. Ms. Cochrane informed Ms. Monday she would have to consult with her husband (the other owner of Mohn’s Florist) over the weekend. When Ms. Monday did not receive an immediate response, she cleared her belongings and left.

In support of her claim that she was entitled to unemployment benefits, Ms. Monday asserted that she was assured she would receive an increase in pay and knew that she was underpaid because of “some averages” she found online and knowledge of the wages of other floral designers she knew personally. Mohn’s Florist disputed Ms. Monday’s allegations claiming Ms. Monday would have received the average pay for the Edison, NJ area, which at the time was $15.35 per hour. Additionally, Mohn’s Florist stated that Ms. Monday was given raises and bonuses in May of each year, and occasionally, also in December, dependent upon business performance. The Appellate Division found that because Mohn’s Florist only asked for the weekend before responding to Ms. Monday’s request for a raise, Ms. Monday in fact left her employment without good cause attributable to the work and was not entitled to unemployment benefits.

New Jersey Court Vacates and Remands Decision Disqualifying Employee From Receiving Unemployment Benefits for Failing to Provide Adequate Documentation of Familial Relationship with Deceased Grandfather

June 27, 2012 | Smith Eibeler LLC

The New Jersey Appellate Division recently vacated a decision rendered by the Board of Review disqualifying the claimant from receiving New Jersey unemployment benefits. The Appellate Division directed that further proceedings concerning the claimant’s eligibility for unemployment benefits be conducted in order to determine the relationship between the claimant and the deceased man that the claimant claimed to be his biological grandfather. In addition, the Appellate Division found it necessary to further develop facts surrounding the employer’s policy on documentation of absences.

The Board of Review had previously found the claimant disqualified for New Jersey unemployment benefits when claimant’s attendance of his grandfather’s funeral caused him to exceed employer’s attendance point program resulting in his termination. The Appellate Division found that the ambiguous nature of the evidence presented as to claimant’s familial relationship to the deceased and the employer’s policy on documentation of absences made it impossible to reach a final decision without further proceedings.

In this matter, Regis v. Board of Review, the claimant, Mr. Cleveland M. Regis, worked as a shipping clerk for five years. In November 2010, Mr. Regis requested leave to attend a funeral with his mother. Mr. Regis claimed that the decedent was his grandfather and was asked by his employer to provide the obituary upon his return. At the time his leave was approved, Mr. Regis was within the ten points permitted in his employer’s attendance point program. Upon Mr. Regis’ return to work, his employer requested additional written documentation from Mr. Regis because neither Mr. Regis nor his mother were mentioned anywhere in the obituary. Mr. Regis explained to his employer that he was left out of the obituary purposely by a disgruntled aunt, no other documentary evidence existed and that he “did not want to put his family business out there.” In lieu of the requested additional written documents that Mr. Regis claimed did not exist, Mr. Regis provided his employer with names and telephone numbers of family members who could confirm his familial relationship to the decedent. There was no evidence on the record that the employer contacted these individuals before the employer terminated Mr. Regis for exceeding the ten points allowed in the attendance point program. Mr. Regis’ only exceeded the allotted points because his employer retracted his approval of the leave requested to attend the funeral.

Claimant Not Required to Repay Unemployment Compensation Benefits Improperly Paid to Him

May 18, 2012 | Smith Eibeler LLC

The New Jersey Appellate Division recently reversed a decision of the Appeal Tribunal and Board of Review finding the claimant was not liable to refund improperly paid unemployment benefits in the amount $24,676. The Appeal Tribunal and Board of Review previously found that the claimant’s receipt of unemployment benefits were invalid because New Jersey unemployment benefits law prohibits the claimant from included his elected position in the base period to determine his eligibility for benefits. The Court disagreed that based upon non-fraudulent nature of the overpayment of the unemployment benefits, the claimant should not be required to repay the unemployment benefits he collected in the amount of $24,676.

In Eckensberger v. Board of Review, the claimant Mr. Dale Eckensberger, Sr. worked as an elected paid fire commissioner in the Township of Woodbridge (Woodbridge) from March 2005 through March 2008. Mr. Eckensberger simultaneously worked as a janitor at Iseling Chemical Hook & Ladder Co. until February 2008. On May 11, 2008, Mr. Eckensberger filed for unemployment compensation benefits, was found eligible for benefits without disqualification and received such benefits from May 17, 2008 to March 20, 2010. Mr. Eckensberger established a regular base year for his benefits from January 1, 2007 through December 31, 2007, taking into account both his work as a Woodbridge fire commissioner and as a janitor for Iseling Chemical Hook & Ladder Co. However, during that one-year period, he only worked for Iseling eight weeks and earned a total of $3374. On September 22, 2009, Mr. Eckensberger filed for Social Security disability benefits and was deemed disabled on August 1, 2009, eligible to receive disability benefits starting January 2010.

Woodbridge appealed the Board’s decision as to Mr. Eckensberger’s unemployment benefits on November 21, 2009. The Appeal Tribunal found that under New Jersey’s Unemployment Compensation Law (N.J.S.A. 43: 21-1 to 24.30), a claimant’s employment as an elected official could not be considered in a determination for unemployment benefits. On October 27, 2010, Mr. Eckensberger’s unemployment claim was deemed invalid because his position as an elected Woodbridge fire commissioner had been considered in the determination. The Director of the Division of Unemployment Compensation issued a request for refund in the amount of $24,676.