CONGREGATION BETH CHAIM v. BOARD OF REVIEW DEPARTMENT OF LABOR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4448-12T2

CONGREGATION BETH CHAIM,

Appellant,

v.

BOARD OF REVIEW, DEPARTMENT

OF LABOR and BARBARA KAHNER,

Respondents.

_______________________________________

August 4, 2014

Argued June 17, 2014 Decided

Before Judges Ashrafi and Haas.

On appeal from a the Board of Review, Department of Labor and Workforce Development, Docket No. 395,975.

Gary K. Wolinetz argued the cause for appellant (Greenbaum, Rowe, Smith & Davis L.L.P., attorneys; (Mr. Wolinetz on the brief; Steven B. Gladis, on the brief).

Arupa Barua, Deputy Attorney General, argued the cause for respondent Board of Review (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Ms. Barua, on the brief).

Barbara Kahner, respondent pro se.

PER CURIAM

Appellant Congregation Beth Chaim, a Reform Jewish Temple ("Beth Chaim" or "the Temple"), appeals from the decision of the Board of Review, Department of Labor and Workforce Development, finding that respondent Barbara Kahner was eligible for unemployment compensation benefits. Beth Chaim contends Kahner voluntarily resigned from her employment with the Temple under an agreement that provided her with generous compensation in anticipation of her retirement, and therefore, she was not eligible to receive unemployment compensation. The Board of Review disagreed and determined that Beth Chaim compelled Kahner to resign, and therefore, her termination was not voluntary.

Although the employer presents a reasonable view of the factual circumstances of the case, we do not find sufficient ground on this record to reverse the Board's decision. The Board's contrary understanding is also acceptable, and our highly deferential standard of review, see, e.g., Pub. Serv. Elec. & Gas Co. v. N.J. Dep't of Envtl. Prot., 101 N.J. 95, 103 (1985), requires that we affirm its decision.

We will reverse an administrative agency's decision only if it is contrary to law or arbitrary, capricious, or unreasonable. Brady v. Bd. of Review, 152 N.J. 197, 210-11 (1997). "[I]f substantial credible evidence supports an agency's conclusion, a court may not substitute its own judgment for the agency's even though the court might have reached a different result." Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992); see also Mullarney v. Bd. of Review, 343 N.J. Super. 401, 406 (App. Div. 2001) (scope of appellate review in appeal from denial of unemployment benefits).

The facts are not significantly disputed. Kahner was employed by Beth Chaim for eighteen years as its Pre-School Director. When the needs of the Temple changed, the rabbi informed Kahner in 2009 that the preschool education program would be restructured and Kahner's full-time position would be eliminated. The rabbi offered Kahner a new position as Assistant Director of Early Childhood Learning, but the new position would be for half the work hours of Kahner's existing position and require her to work on weekends rather than during the regular work week. Kahner declined the new position and asked that she be permitted to stay on as Pre-School Director for another three years until she reached retirement age.

In an effort to accommodate a long-term employee, the rabbi and the Temple allowed Kahner to remain in her position, and in late 2009, they presented to her a proposed agreement by which she would resign at the end of 2011. On March 25, 2010, Kahner signed the agreement. The agreement stated that she was resigning as of December 31, 2011, and that she would be paid her full salary ($77,850) until her termination date. In addition, she would receive the same salary for an additional six months through June 2012, or until she secured another job, although she was not required to perform any work duties during that continuation period. The agreement also acknowledged Kahner's right to continue her medical insurance benefits through COBRA rights, and it included mutual releases between Beth Chaim and Kahner as to potential claims against each other. The agreement provided a twenty-one day attorney review period during which Kahner could revoke the agreement.

The attorney review period passed without revocation or modification of the agreement, and Kahner worked through the end of December 2011 and received her full salary. At the time she left her position, Beth Chaim held a celebration to honor her service, and she wrote a note of gratitude to the rabbi. Beth Chaim paid her the continuation salary in accordance with the terms of the agreement through June 2012.

Immediately after the payments from Beth Chaim ended, Kahner applied for unemployment compensation benefits on July 2, 2012. The Unemployment Insurance Office conveyed Kahner's application to Beth Chaim, requested information about the separation, and informed the employer of its right of appeal. The notice to Beth Chaim designated Kahner's reason for leaving her position as "voluntary quit."

Initially, a Deputy Director of the Division of Unemployment Insurance found that Kahner was eligible for benefits because she "did not have the option of work beyond" December 31, 2011. Beth Chaim appealed the Deputy Director's decision. An Appeal Tribunal held a telephone hearing on January 18, 2013, and issued a written decision the following week reversing the Deputy Director and denying Kahner's claim. The Appeal Tribunal concluded that the March 25, 2010 agreement demonstrated a voluntary resignation or retirement by Kahner, and that she was therefore not eligible for benefits, in accordance with N.J.S.A. 43:21-5(a). The Appeal Tribunal also cited N.J.A.C. 12:17-9.5 as relevant to the facts. That regulation requires separation from employment within sixty days of an imminent layoff or discharge for the termination of employment not to be considered a voluntary abandonment of the job by the employee.

Kahner appealed to the Board of Review, which reversed the decision of the Appeal Tribunal by a written decision issued on April 22, 2013. The Board accepted the Appeal Tribunal's fact findings but concluded that "the employer, not the claimant, decided the claimant could not remain in the position" after December 31, 2011, and therefore, Kahner had not left her employment voluntarily.

On appeal before us, Beth Chaim contends that the March 2010 agreement states in six places that Kahner is resigning, and further states that she was not threatened or coerced to enter into the agreement but was doing so voluntarily. Beth Chaim argues that it chose to treat Kahner charitably, and beyond its contractual or legal obligations, by affording her a period of continued employment and severance pay rather than discharging her when it decided to restructure its early childhood education program and eliminate her position. The
Temple states that its payment of full salary to Kahner for an additional six months was intended to provide her a generous opportunity to find other employment if she so desired, and there was no contemplation that she could collect unemployment compensation benefits in addition to the benefits provided under the agreement. According to the Temple, since it is self-insured for unemployment compensation, it has been required to pay $31,7721 toward Kahner's unemployment benefits, which it could have done in 2010 without also granting her an additional two years of full salary. The Temple argues that the additional compensation it has been required to pay to Kahner could have been better used for its charitable and humanitarian causes.

Under N.J.S.A. 43:21-5(a), a claimant who "left work voluntarily without good cause" is not eligible to receive unemployment benefits until the claimant has re-established a work record. We have not been directed to a case or other legal authority that addresses precisely the circumstances of this case where the employee agreed to resign at a specific date in the future as an alternative to earlier discharge from her position. The most relevant case that discusses analogous circumstances is Brady, supra, 152 N.J. at 203-04, where the employees of a General Motors plant accepted an early retirement plan in anticipation of announced future layoffs and closing of the plant and then applied for unemployment compensation benefits. The Supreme Court held the claimants were not entitled to unemployment compensation benefits. Id. at 213. It stated that the employees decided to accept the early retirement plan even though their anticipated layoffs were not imminent and they would not suffer a substantial economic loss if they continued to work until they were laid off or the layoffs had become imminent. Id. at 219-22.

After the Supreme Court's decision in Brady, the Department of Labor promulgated N.J.A.C. 12:17-9.5 to address a claimant's eligibility if he or she resigns because of impending layoff or discharge. The regulation states:

If an individual leaves work after he or she is notified by the employer of an impending layoff or discharge, he or she shall be subject to disqualification for benefits unless the individual will be separated within 60 days. For purposes of this section, imminent layoff or discharge is one in which the individual will be separated within 60 days.

[Ibid.]

Beth Chaim argues that the regulation is controlling in this case because Kahner agreed to resign in March 2010 but her layoff or discharge was not imminent within sixty days.

There is no evidence in the record that Kahner would have been discharged within any specific time period had she declined to sign the separation agreement presented to her by Beth Chaim. On the other hand, there is substantial evidence that Kahner did not desire to leave her position and felt compelled to accept the terms of the agreement or she would be discharged. In that sense, her resignation was not voluntary but compelled, as the Board found. The question is whether such a compelled resignation with benefits afforded by the employer is an early retirement plan that the employee had the choice of accepting or rejecting or more accurately a compelled resignation that leaves the employee eligible to collect unemployment compensation.

In Fernandez v. Board of Review, 304 N.J. Super. 603, 607 (App. Div. 1997), we held "that an employee's acceptance of a 'severance package' or 'early retirement incentive package' bars him from receiving unemployment benefits unless he shows he accepted the package because of a real, imminent, and substantial risk of losing his job." Here, the Appeal Tribunal found that Kahner had in effect accepted an early retirement package from the Temple and was thus ineligible to receive unemployment compensation benefits.

While the Appeal Tribunal's finding was reasonable, the Board of Review, as the final voice of the agency, was not bound to reach the same conclusion. See Messick v. Bd. of Review, 420 N.J. Super. 321, 326 (App. Div. 2011) (Board of Review has authority to conduct de novo review of the decision of the Appeal Tribunal). The Board concluded that Kahner proved she did not accept the Temple's offer voluntarily but because she was compelled either to accept it or be discharged from her position. There is no dispute that she did not have the option of working beyond the December 31, 2011 termination date fixed by the Temple. Therefore, the Board could reasonably conclude that Kahner was compelled to leave her position as of that date and did not do so voluntarily within the meaning of N.J.S.A. 43:21-5(a).

Although her discharge was not proven to have been imminent within sixty days of her signing the agreement on March 20, 2010, the specific date was set by the agreement, and Kahner had no option of revoking the agreement after she signed it and received its benefits. Cf. Shuster v. Bd. of Review, 396 N.J. Super. 240, 247 (App. Div. 2007) (employee who resigned after being told that her employment was not desired and she would be replaced was not disqualified for having left her position voluntarily without good cause).

It was apparently the Temple's intention to provide severance pay to Kahner in lieu of unemployment compensation while she searched for a new job after her termination. The amount paid by the Temple (about $39,000) was substantially greater than the unemployment benefits to which she was entitled had she been discharged without such a benefit ($15,886). Nevertheless, the separation agreement did not, and could not, explicitly provide that the severance pay would replace Kahner's right to unemployment compensation because such a term of the agreement would have been unenforceable. See N.J.S.A. 43:21-15(a) ("Any agreement by an individual to waive, release, or commute his rights to benefits or any other rights under this chapter shall be void.").

We conclude that the factual circumstances of this case can be viewed either as an early retirement or as a compelled resignation. The agency charged with administering the unemployment compensation laws had discretion to determine into which category the facts fit best.

If the Board's factual findings are supported "by sufficient credible evidence, courts are obliged to accept them." Self v. Bd. of Review, 91 N.J. 453, 459 (1982); Goodman v. London Metals Exch., Inc., 86 N.J. 19, 28-29 (1981). We may not substitute our own assessment of the facts, even if we would have reached a different conclusion. Greenwood, supra, 127 N.J. at 513. We "can intervene only in those rare circumstances in which an agency action is clearly inconsistent with its statutory mission or with other State policy." George Harms Constr. Co. v. N.J. Turnpike Auth., 137 N.J. 8, 27 (1994).

Here, the Board could determine on the basis of substantial evidence that Kahner was compelled to resign as of December 31, 2011, and therefore, did not leave her position voluntarily. The Board's decision was not arbitrary, capricious, or unreasonable.

Affirmed.

1 In her responding brief, Kahner claims that she has received $15,886 in unemployment compensation.