SUSAN C. HOLTZBERG v. BOARD OF REVIEW DEPARTMENT OF LABOR AND THE GABLES, INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4429-09T4

SUSAN C. HOLTZBERG,

Appellant,

v.

BOARD OF REVIEW, DEPARTMENT

OF LABOR AND THE GABLES, INC.,

Respondents.

________________________________________________________________

June 23, 2011

Submitted May 17, 2011 - Decided

Before Judges Carchman and Waugh.

On appeal from the Board of Review,

Department of Labor, Docket No. 198,019.

Ronald J. Wronko, L.L.C., attorney for appellant.

Paula T. Dow, Attorney General, attorney for respondent Board of Review (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Alan C. Stephens, Deputy Attorney General, on the brief).

Respondent The Gables, Inc., has not filed a

brief.

PER CURIAM

Appellant Susan C. Holtzberg appeals from a final decision of the Board of Review (the Board) of the Department of Labor finding that appellant was not eligible for unemployment benefits as she left work voluntarily without good cause attributable to the work. N.J.S.A. 43:21-5(a). We reverse and conclude that the Board's decision was arbitrary, capricious and unreasonable.

There were multiple factual hearing conducted in this matter. Appellant was the general manager of the Gables, a restaurant, when on July 10, 2008, she was involved in an incident involving a customer. On that evening, the menu did not allow for alterations for customer requests. Despite the fixed menu, a customer requested a fish entr e. After being requested to make the change, the chef refused and used inappropriate language. Sandra Beninati1, the owner, asked appellant if the request could be accommodated and was informed that it could not, whereupon, according to appellant, Sandra "screamed at her to leave." Appellant did so.

According to Sandra, on July 10, 2008, a staff member approached her and advised that a customer had made a special request and that appellant had denied the request. Sandra observed that the customers were good clients. She went to the kitchen and asked appellant, "Can't you get this guy a piece of fish?" Appellant then yelled in her ear, to the point of pain, that she would not. Appellant stated, "I'm so sorry, he (the chef) said no." Appellant refused the order on behalf of the chef. Sandra told appellant her job was not only to care for her staff, but to please her customers as well. Sandra left the kitchen, went to another server and obtained the order. Appellant returned from the kitchen, put the fish in Sandra's hand and told her "that cost you $36.00."

Sandra then summoned appellant outside, at which point appellant started yelling again and told Sandra "you think you can just waltz in here and get anything you want?" Appellant's voice kept getting louder, and she was very angry. When things quieted down, Sandra told appellant, "you need to go home." Appellant had yelled at Sandra on previous occasions but in private areas. Appellant was sent home on this occasion because she was yelling at Sandra in front of other staff. Appellant admitted that Sandra told her that her ears were ringing. Sandra did not tell appellant she was fired nor did she give her anything in writing terminating her services. The restaurant was busy, and Sandra stated that she would never fire someone "in the middle of the season." Appellant was not discharged but was told to go home when, according to Sandra, she had a "meltdown on a bad night."

According to appellant, the next day, the Gables changed its website to reflect that appellant was no longer the general manager, identifying Sandra as the new general manager, and the staff was informed that appellant had been fired. This was confirmed by others who called appellant to report that they had been informed of the same fact.

Despite her termination, appellant remained in contact with the Gables for several days after the incident. On July 13, 2008, appellant was sent an email from Steve. The email stated, in part:

Dearest Susan . . . . one issue that will never change, in my opinion, is that I believe that simply a lack of communication, or lack of a response of a request for a phone conversation is inexcusable, and carries many life long repercussions. All matters, require closure. In this case, I am hoping, but not insisting, that closure to the conversation last Thursday, creates a possibility for some type of understanding, and perhaps a reconciliation, if agreed to by all parties. Either way, closure creates opportunity for all. Anything is possible. The darkest part of night, is that moment before dawn. For the sake of your own sanity, a phone meeting, or a face to face meeting is in order. I will respect your opinions since they are your own, and then make my own set of decisions. One conversation is not too much to ask. I will be available anytime today except for this evening between 7: 00 PM and 11:00 PM. Call me before, or call me later anytime, 24X7 . . . . never too early and never too late, and I make it a point to answer my cell phone, or call back ASAP, as a matter of common courtesy, friend or foe, doorman or CEO, people are people, and I make it my responsibility to communicate with everyone on one level playing field. This is one of the convictions I stand for . . . I make myself available to all, and I am always willing to listen, and I guarantee you a swift reply decision. There are no right or wrong answers, except for no answer. That option is egregiously inappropriate. The choice is yours.

[(Emphasis added; alterations in original).]

Appellant denied receiving the email of July 13, 2008, but she read the email when Elaine Tollison showed it to her the following Tuesday, July 15. Appellant claimed that her laptop which the employer had given her was being repaired, and she did not have access to her emails when they were sent.

Despite appellant returning to the restaurant, she claims she was never given an opportunity to return to her job. In addition, she did not receive voice-mails or other messages from anyone at the restaurant with the exception of an email from Steve requesting return of a company computer.

Appellant's version of the events was corroborated by Elaine Tollison, an assistant manager at the Gables. She observed that other employees had been fired in the same manner. She confirmed that Steve advised the staff the next day that appellant had been fired, and his wife was the new general manager.

The Gables initially took the position that appellant was terminated on July 10, 2008, because of inappropriate or abusive language. During the first telephone hearing, Sandra, the sole owner of the Gables, testified on behalf of the Gables that appellant had screamed at her in response to a customer request for a fish entr e. She admitted to telling appellant to go home.

Sandra admitted that appellant's name was removed from the website but not until later. She admitted that she became the general manager upon appellant's departure. Sandra claimed that she had Tollison call appellant after the incident, but Tollison denied being given such instruction.

These facts were presented at the original hearing before the Appeals Tribunal. The Appeal Tribunal found that appellant had been discharged from the job "because the employer did not like the manner in which the [appellant] spoke to her. The [appellant] spoke to the employer in a tone compatible with a professional kitchen environment." The Appeal Tribunal ruled that there was no disqualification as a result of appellant being discharged for misconduct or leaving voluntarily without good cause. The Appeals Tribunal made a specific finding that "The [appellant's] testimony is more credible as she appeared to have a better recollection of what took place. The employer's contention is rejected."

Following this adverse ruling on its theory that the employee left the job for misconduct,2 the Gables appealed, and in its appeal set forth a new set of facts that were not previously presented to the Appeals Tribunal. In fact, rather than assert that appellant left the job for misconduct or voluntarily, as it did during the earlier hearing, the employer changed its theory and asserted that appellant abandoned her position. The Board remanded to permit the employer to present new evidence. No explanation was forthcoming from the employer as to why this information had not been produced at the initial hearing.

A new hearing was conducted, but because of lack of sufficient notice to appellant, she did not participate. The hearing proceeded ex parte. The employer denied that appellant's name was removed from the Gables' website on July 11, 2008, the day after she was sent home. Appellant remained on the website in several places as general manager as late as July 29, 2008. Appellant's name was not immediately removed because Sandra was hoping that appellant would return to work. The name was finally removed from the website when it became apparent weeks later that she was not going to return.

According to Steve, he telephoned appellant several times beginning July 11, 2008, and left messages on her home and cell phones. Steve fully expected her to return because, as general manager, appellant had important duties including staffing. In one phone call, Steve claimed he apologized for what had happened the previous night and urged her to return to work. Steve further claimed he left a message telling appellant that she was a trusted employee and friend, who was "part of our team," and there was no reason for her to believe that her job was in jeopardy. When she failed to appear for work or return his calls, Steve called appellant on July 12, 2008. Appellant did not respond. When asked by the Appeal Tribunal Examiner whether appellant was informed during the phone calls that her job was secure Steve responded, "absolutely," and that her "job was waiting for her."

Following the July 13 email, another email was forwarded on July 14. Appellant did not respond. Finally, Steve telephoned appellant on July 19, 2008 and spoke to her husband. According to Steve, appellant's husband advised Steve that she had received all of his calls and emails, she did not wish to speak with him, and he should not contact her again. Steve sent another email on July 26, 2008, requesting that appellant return company property. Steve claims he again offered appellant her job back, stating that he was "very willing to overlook the events of July 10," even though it appeared that she had abandoned her job.

Due to the lack of sufficient notice, the hearing was reopened and appellant again denied receiving phone calls from Sandra and Steve. Appellant also owned a cell phone but claimed it was for emergency use only and had limited minutes.

Critically important, her husband indicated that despite Steve's assertion that he left messages on appellant's home phone, appellant did not have a home answering machine. Steve asserted that appellant remained employed at the Gables as of July 26, 2008. Steve forwarded one last email to appellant on August 4, 2008, again requesting return of company property and also asking for a meeting. While reasserting that appellant had abandoned her position, Steve believed that a meeting would be beneficial. Sandra testified that continuing work was available for appellant, and appellant could have returned to the Gables "in a heartbeat."

After the subsequent appeal and remand, the Appeal Tribunal, in its decision of October 22, 2009, held appellant disqualified for benefits finding in part as follows:

Both the claimant and the employer were extremely adamant in their testimony. The claimant contended at the hearings that the employer terminated her on 07/10/08 when she told her to leave. The employer testified that she did not terminate[] the claimant but sent her home early because of the verbal confrontation. The employer further testified that it was their busy season and they expected the claimant to return to work on the following work day. They subsequently attempted to reach the claimant a number of times via telephone and email. The employer's testimony that the claimant left the job voluntarily is more credible as it is more logical. The claimant's contention is rejected as not substantiated.

The Tribunal held that appellant's failure to return to work following a confrontation with her employer did not constitute good cause for leaving work under N.J.S.A. 43:21-5(a). On April 21, 2010, the Board of Review affirmed the decision of the Appeal Tribunal. This appeal followed.

The issue on this appeal is whether appellant, who resigned over a dispute in her working conditions, has established good cause within the meaning of N.J.S.A. 43:21-5(a), thus entitling her to unemployment benefits. The burden of proof rests upon appellant to establish her right to unemployment compensation. Brady v. Board of Review, 152 N.J. 197, 218 (1997).

On appeal, appellant asserts that the Board's decision is not supported by substantial credible evidence. In addition, she claims that the employer has taken inconsistent positions, first arguing that appellant was dismissed for cause and then arguing that appellant abandoned her job.

Our standard of review of agency determinations is limited. In re Stallworth, ___ N.J. ___, ___ (2011) (slip op. at 13); In re Taylor, 158 N.J. 644, 656 (1999); Brady, supra, 152 N.J. at 210. We must give deference to such a decision, unless it is arbitrary, capricious or unsupported by substantial credible evidence in the record as a whole. Russo v. Bd. of Trustees, Police and Fire Ret. Sys., ___ N.J. ___, ___ (2011) (slip op. at 25); In re Carter, 191 N.J. 474, 482 (2007). Accordingly, we must determine whether the agency's findings could reasonably have been reached on sufficient credible evidence in the record, "considering 'the proofs as a whole,' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility." Taylor, supra, 158 N.J. at 656 (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)).

It is not our function "'to substitute [our] independent judgment for that of [an] administrative' agency," such as the Board, "'where there may exist a difference of opinion concerning the evidential persuasiveness of the relevant [proofs].'" In re Certificate of Need Granted to the Harborage, 300 N.J. Super. 363, 379 (App. Div. 1997) (quoting First Sav. & Loan Ass'n v. Howell, 87 N.J. Super. 318, 321-22 (App. Div. 1965), certif. denied, 49 N.J. 368 (1967)) (alterations in original). Further, we should not "'weigh the evidence, determine the credibility of witnesses, draw inferences and conclusions from the evidence, or resolve conflicts therein.'" Ibid. (quoting De Vitis v. N.J. Racing Comm'n, 202 N.J. Super. 484, 489-90 (App. Div.), certif. denied, 102 N.J. 337 (1985)).

Only when the agency's findings are clearly mistaken and "'so plainly unwarranted that the interests of justice demand intervention and correction'" should a reviewing court "'make its own findings and conclusions.'" Campbell v. N.J. Racing Comm'n, 169 N.J. 579, 587-88 (2001) (quoting Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 588 (1988)).

We first comment on the unusual procedure employed in this case. The hearing before the Appeals Tribunal was appropriately noticed and both parties appeared and presented their respective facts and theories. After both parties concluded and "rested" their cases, the Appeal Tribunal made a decision on the facts including a credibility determination adverse to the employer. Not until receiving an adverse determination did the employer come forward with new facts and a new theory resulting in a remand, without explanation. An appeal to the Board is on the record and proceedings before the Appeal Tribunal should not be an opportunity to "test" the validity of a particular theory and then seek relief in the event, as here, of failure. We recognize that there may be circumstances where the interests of justice require such relief; we do not perceive that to be the situation here.

In fact, the Appeals Tribunal, which first heard the matter ex parte because of lack of notice to appellant, on remand found that the employer prevailed. The Tribunal utilized the same language it had utilized when finding for appellant and now found the employer "credible."

Our review of the record leads us to conclude that the agency's findings do not comport with the record and fail to address or consider obvious conflicts in the employer's testimony that cannot be reconciled with the ultimate determination.

In concluding that appellant was not entitled to benefits, the Board adopted the Tribunal's finding that the employer "attempted to reach the claimant a number of times via telephone and email." The Tribunal then concluded that the "employer's testimony that the claimant left the job voluntarily is more credible as it is more logical."3

Absent from either the Tribunal's determination or the Board's review is any analysis of the clear conflict between the testimony of Steve and both appellant and her husband. Steve testified that he left messages both on appellant's home phone and cell phone. He was unable to produce any records demonstrating that such calls had been made to the cell phone. Critically important as to the issue of credibility and never addressed by the Tribunal or Board was the fact that appellant's husband indicated that appellant did not have an answering device on her home phone. In addition, she indicated that her cell phone was not accessible and was used for emergency purposes. We are mindful of our obligation to defer to the factual findings of the Board; however, that deference does not relieve the Board of making findings as to the critical facts in dispute. The Board failed to address the critical factual disputes that impacted upon the ultimate decision. Failing to do so, we see no basis for deferring to a generalized finding that has no detailed support in the record.

The July 13, 2008 email was equally important. A careful reading of that email reveals that it never said or suggested that appellant's job remained open, especially given the corroborated testimony that Steve had announced, before the email, that appellant had been fired. Nothing presented by the employer, either in the produced emails, or the uncorroborated testimony regarding phone messages, suggests that the appellant's job was still available. The July 13 email was the time and place to state such facts and as we have noted, a careful reading of the email, including the "closure" comments, cannot reasonably be read as communicating such a conclusion.

Similarly, neither the Tribunal nor the Board address the timing of the July 26 email that asserted appellant had abandoned her job. The timing is important as this self-serving email was sent after appellant had apparently filed her claim for unemployment benefits.

As we have noted, our review of the record leads us to conclude that the determination of both the Tribunal and Board were not supported by credible testimony or records. Accordingly, we conclude that the decision of the Board was arbitrary, capricious and unreasonable.

Finally, we recognize that in Stallworth, a case involving review of a the Civil Service Commission's modification of a employee-disciplinary penalty recommended by an Administrative Law Judge (ALJ), the Court was critical of our reinstatement of the penalty suggested by the ALJ and determined that the appropriate remedy was a remand to the Commission for further consideration of remedy. We distinguish Stallworth, recognizing that here, there was previously a determination that appellant was credible and the subsequent proceedings failed to present credible evidence to warrant reconsideration of that finding; moreover, this appeal has been the subject of three hearings. No new facts are apparent and the parties, both appellant and employer, are entitled to repose4.

Accordingly, we reverse and remand for the entry of an appropriate order awarding appellant unemployment benefits.

1 For ease of reference, we use the first names of Sandra Beninati and Steve Beninati as they both testified in the various hearings conducted in this matter.

2 Sandra also suggests that appellant left the job voluntarily.

3 As we have noted, the language used to support the employer's version of the events is the same language used in the October 28, 2008 Appeal Tribunal determination that the "[appellant's] testimony is more credible as it is more logical."

4 We note that at the most recent hearing, the employer revealed that it had filed a Chapter 11 bankruptcy proceeding although it is still operating. We do not address the impact of that proceeding on appellant's claim for unemployment benefits.