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Appellate Division Reverses Board’s Denial of Unemployment Benefits

March 19, 2018

Robert B. Spawn reports on a recent unpublished decision from the Superior Court of New Jersey, Appellate Division.

A recent New Jersey case involved a former employee of a newspaper appealing Respondent-Board’s final agency decision denying her claim for unemployment benefits. Appellant had worked as a sales representative for the newspaper for over thirty years, and, in August 2015, the newspaper announced by email that it was offering an early retirement program to encourage departures as a cost-cutting measure. Although the email stated that the retirement program was voluntary, it contained the following warning: “If we don’t achieve our goals, we will need to re-evaluate where we stand and we can’t rule out implementing other actions in the future.” The email also stated that the deadline for responding was October 12, 2015.


Appellant then asked her manager if she would be fired if she did not accept the retirement package. Unfortunately for Appellant, her manager was unable to assure her that her employment would continue past October 12. Soon after this meeting, Appellant’s entire sales territory and all of her sales accounts were transferred to a new hire. Appellant also knew that the newspaper had recently fired ten other salespersons, and had transferred their accounts to another location rather than reassigning the accounts to remaining sales personnel in her office. Reports of downsizing were even publicized in another newspaper, who reported that Appellant’s newspaper would likely lay off about 400 employees.


Fearing imminent discharge, Appellant accepted the retirement package and subsequently filed a claim for unemployment benefits, which was administratively denied. After several intra-agency appeals, Respondent-Board upheld the finding that Appellant had “left work voluntarily without good cause attributable to the work.” Appellant then took the matter to the Superior Court.


While the Court realized that it owed considerable deference to the Board in administering the state’s unemployment laws, it nonetheless held that the agency had acted arbitrarily in rejecting Appellant’s claim. In its analysis, the Court first explained that an employee’s acceptance of a retirement package often qualifies as voluntary conduct that disqualifies the employee from receiving unemployment benefits. However, the Court then stated that where an employee’s fear of layoff is based on definitive, objective facts, she may still be eligible for unemployment benefits despite having accepted a retirement package. Here, Appellant’s entire sales territory was reassigned to a new employee, she received no encouragement or assurance from her supervisor, and there were reports of her employer’s imminent downsizing in the press. The Court reasoned that these definitive, objective facts satisfied Appellant’s burden of proof and reversed the Board’s denial of her claim.


Please contact Robert B. Spawn if you have any questions or need assistance in connection with this subject.