ANTHONY O. PATANELLA v. BOARD OF REVIEW DEPARTMENT OF LABOR

Annotate this Case

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0




ANTHONY O. PATANELLA,


Appellant,


v.


BOARD OF REVIEW, DEPARTMENT OF

LABOR and STERLING SECURITIES, LLC,


Respondents.

_____________________________________

June 23, 2014

 

Submitted May 21, 2014 Decided

 

Before Judges Grall, Waugh and Accurso.

 

On appeal from the Board of Review,

Department of Labor, Docket No. 388,079.

 

Anthony O. Patanella, appellant pro se.

 

John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Kelly Lichtenstein, Deputy Attorney General, on the brief).


PER CURIAM


Anthony O. Patanella appeals a final decision of the Board of Review. The Board affirmed the Appeal Tribunal's decision disqualifying Patanella for benefits because of his "severe misconduct connected with the work." N.J.S.A. 43:21-5(b). For the reasons that follow, we reverse and remand.

Sterling Securities LLC (Sterling) hired Patanella as a security guard on November 12, 2011 and terminated his employment on April 4, 2012. Patanella filed for unemployment compensation on April 15, and on May 11, the Director of the Division of Unemployment Insurance gave Patanella and Sterling written notice of Patanella's eligibility for benefits. Sterling filed a letter protesting that determination on May 17, and the Division treated that letter as an appeal by Sterling. Consequently, an appeals examiner conducted a hearing on November 21, 2012. Although Sterling's owner, Vincent Ucci, appeared and testified, Patanella did not appear. By Ucci's account, Patanella was not in uniform on his last day of work, April 4, because he was wearing sneakers that were black, red and white. Ucci had warned Patanella several times that he would be terminated if he wore the sneakers. Ucci said, "I told him several days before, which I have the write-ups, I told him three or four times not to wear them again or he'd be terminated. He didn't take it serious[ly], and he was terminated." Ucci did not testify that he had given Patanella written notices, but he did testify that Sterling had a written policy addressing uniforms. He did not produce that policy.

Months before the hearing, in May 2012, Ucci faxed documents to the agency memorializing problems with Patanella's performance. There was a memo Ucci wrote on March 14 to Sterling's operations manager. In that memo, Ucci advised that he had done a site inspection and seen Patanella out of uniform "wearing black, red and white sneakers" despite being "warned several times prior to this." Although Ucci wrote, "This shall be his first written warning for uniform appearance," the memo did not indicate that Ucci gave or intended to give Patanella a copy of that memo.

Two days later, Ucci saw Patanella in the same sneakers and wrote another memo to the operations manager. He also described that memo as a "second warning in writing." Like the first memo, however, the second gives no indication that Ucci gave Patanella a copy or intended him to receive a copy.

In the March 16 memo, Ucci indicated that he would have a supervisor, James George, "follow up with" Patanella and "write any pertinent reports that will reflect any infractions." George promptly complied. On the same day, George prepared a memo to Ucci, explaining that he had, in the past, spoken to Patanella about his work ethic, pre- and post-shift mileage readings on his assigned patrol car and Patanella's failure to dress in uniform. In George's view, the low mileage indicated Patanella's failure to patrol during his shift as directed.

Ucci's March 16 memo included information pertinent to the question whether Patanella's wearing sneakers amounted to misconduct disqualifying him from benefits. In that memo, he noted that Patanella gave him an excuse for wearing sneakers "he had a sore foot."

Ucci sent the Division the documents discussed above and twelve vehicle inspection reports stating the mileage Patanella put on the car during those shifts.

The law governing the disqualification from unemployment compensation benefits for misconduct connected with the work, N.J.S.A. 43:21-5(b), was amended by the Legislature effective July 1, 2010. L. 210, c. 37, 2, 6. This court addressed the significance of those amendments in Silver v. Bd. of Review, 430 N.J. Super. 44 (App. Div. 2013). We agree with the decision and rely upon the panel's interpretation, which we summarize here.

Prior to July 2010, the law provided disqualifications based on "misconduct" and "gross misconduct," the latter carrying more serious consequences. Id. at 48 (interpreting N.J.S.A. 43:21-5(b) as adopted in L. 1936, c. 270, 5). In 2010, the Legislature added an intermediate level of misconduct "severe misconduct" with sanctions more serious than those for "misconduct" and less serious than those for "gross misconduct." N.J.S.A. 43:21-5(b) (as amended by L. 2010, c. 37, 2); see Silver, supra, 430 N.J. Super. at 49 n.4 (comparing the sanctions).

While the Legislature has defined "gross misconduct" to include only misconduct amounting to a crime of the first through fourth degrees, see N.J.S.A. 2C:1-4a, it has not defined "misconduct." Accordingly, over the years courts have given content to the term, and, in 2003, the Department of Labor promulgated a rule largely reflecting the judicial interpretations, N.J.A.C. 12:17-10.2(a), which is now the controlling authority. Silver, supra, 430 N.J. Super. at 50-53. N.J.A.C. 12:17-10.2(a) provides:

(a) For an act to constitute misconduct, it must be 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.

 

(b) . . . . [The omitted subsection addresses "gross misconduct," which is not at issue here.]

 

(c) . . . . [The omitted subsection addresses the requirement that the misconduct be "connected with the work," which is not a fact at issue in this case.]

 

[(Emphasis added).]

 

In Silver, we explained that the rule provides a two-part standard for misconduct. "First, the conduct must be improper, intentional, connected with the work, malicious, and within the employee's control. Second, the conduct must also be either a deliberate violation of the employer's rules or a disregard of the standards of behavior which the employer has the right to expect." 430 N.J. Super. at 53.

As with "misconduct," in adding "severe misconduct" to the statute in 2010, the Legislature did not define that phrase. But in the case of "severe misconduct," the Legislature provided some illustrative, but non-exhaustive, examples:

repeated violations of an employer's rule or policy, repeated lateness or absences after a written warning by an employer, falsification of records, physical assault or threats that do not constitute gross misconduct as defined in this section, misuse of benefits, misuse of sick time, abuse of leave, theft of company property, excessive use of intoxicants or drugs on work premises, theft of time, or where the behavior is malicious and deliberate but is not considered gross misconduct as defined in this section.

 

[N.J.S.A. 43:21-5(b).]

As explained in Silver, the addition of this intermediate level of misconduct was suggested by the Governor in a conditional veto of a bill that included other reforms of the unemployment compensations laws to make the penalties for misconduct match the level of misconduct. 430 N.J. Super. at 53-54. The Department has not adopted a rule governing "severe misconduct," and until such time as it does, "N.J.A.C. 12:17-10.2(a) controls, except to the extent it is superseded by the 2010 amendment." Silver, supra, 430 N.J. Super. at 55.

Thus, in Silver we concluded that the term "misconduct" has the meaning assigned in N.J.A.C. 12:17-10.2(a), even when modified by "severe" or "gross." Id. at 55-56. The panel recognized that two of the examples of "severe misconduct" listed in the statute, read literally, could apply to conduct that need not always "be deliberate, intentional, or malicious" repeated violations of an employer's rule or policy and repeated instances of lateness or absence. Id. at 55. Reasoning that it would be absurd to conclude that the Legislature intended to impose more stringent punishment for "severe misconduct" without regard to culpability required for "misconduct," the court concluded that the examples of "severe misconduct" apply only if the employee acted with the culpability required to establish "misconduct." Id. at 55-56. In short, the panel interpreted the statute to limit "severe misconduct" to the examples listed in N.J.S.A. 43:21-5(b) only if the "acts [are] done intentionally, deliberately, and with malice." Id. at 55.

With that background, we turn to consider the decision of the Appeal Tribunal and the Board's decision affirming the Appeal Tribunal's decision as modified. Although Silver was decided after the Appeal Tribunal and the Board issued their decisions in this case, Silver was interpreting the 2010 amendment to N.J.S.A. 43:21-5(b) and the agency's 2003 rule, N.J.A.C. 12:17-10.2(a). Because it is apparent that neither the Appeal Tribunal nor the Board properly applied the "severe misconduct" amendment as interpreted in Silver, we remand for reconsideration, without foreclosing the Board from exercising its discretion to remand to the Appeal Tribunal for additional fact-finding.

The Appeal Tribunal's decision rests solely upon Sterling's allegation that Patanella "reported to work out of uniform" in "violation of company policy," despite having received verbal and written warnings. The Appeal Tribunal did not consider the fact that neither Ucci's testimony nor the documentary evidence he submitted demonstrated that Patanella was given the written warnings. The Appeal Tribunal also overlooked the fact that the March 16 memo mentioned that Patanella had given Ucci an explanation for wearing sneakers that his foot was sore. Without considering that evidence, the Appeal Tribunal concluded:

In this case, the claimant was discharged from the employment for repeatedly violating the employer's uniform policy. The claimant was repeatedly warned both verbally and in writing with respect to the policy in question. The claimant's repeated violations demonstrated a disregard for the employer that rose to the level of severe misconduct connected to the work. As such, the claimant is indefinitely disqualified for benefits under N.J.S.A. 43:21-5(b) from 04/08/12, as the discharge was for severe misconduct connected to the work.

 

Without discussing the evidence, the Board agreed with the Appeal Tribunal's decision and adopted it with the exception of the date of the disqualification. The Board concluded that Patanella was disqualified "as of April 1, 2012, the week in which the claimant was discharged for severe misconduct."

This court must "defer to and not reverse an agency decision unless it is arbitrary, capricious or unreasonable, or it is not supported by substantial credible evidence in the record as a whole." Bailey v. Bd. of Review, 339 N.J. Super. 29, 33 (App. Div. 2001). But we cannot afford that deference where it is not at all clear that the agency considered the facts in light of the legal issues and explained its reasons for the determination. Ibid. As Silver explains, where non-compliance with a rule is "the result of excusable circumstances" as opposed to "intentional acts of insubordination" the "standard of deliberate or intentional violations" is not met. 430 N.J. Super. at 51-52 (discussing Parks v. Bd. of Review, 405 N.J. Super. 252 (App. Div. 2009)).

Because the agency's decision rests in part on findings not supported by the record and does not address evidence tending to undermine a finding of deliberate, intentional or malicious "misconduct," we reverse and remand for reconsideration. Within ninety days of the date of the decision, the Board shall complete the matter on remand and file its decision with the Clerk of the Appellate Division. Upon receipt of the Board's decision, the clerk will issue an expedited briefing schedule. Our decision should not be understood to preclude the Board from exercising its discretion to reopen the record.

Remanded for further reconsideration in conformity with this opinion; jurisdiction is retained.

 

 

 

 
 

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