MARYBEL PAZ v. BOARD OF REVIEW and CONTROL SOLUTIONS INTERNATIONAL

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

MARYBEL PAZ,

Appellant,

v.

BOARD OF REVIEW and

CONTROL SOLUTIONS INTERNATIONAL,

Respondents.

___________________________________

November 24, 2014

Submitted September 8, 2014- Decided

Before Judges Sabatino and Leone.

On appeal from the Board of Review, Department of Labor and Workforce Development, Docket No. 410,195.

Marybel Paz, appellant pro se.

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

Respondent Control Solutions International has not filed a brief.

PER CURIAM

Claimant Marybel Paz appeals from the decision of the Board of Review (Board) affirming the Appellate Tribunal (Tribunal), which upheld the denial of unemployment benefits. We affirm.

I.

Claimant is a certified public accountant. Respondent Control Solutions International (CSI) is an internal audit outsource firm, which is hired by other entities to supply CSI employees to help them conduct internal audits.

The Tribunal found the following facts. Claimant was employed by CSI as a management consultant from October 30, 2006, through November 16, 2012. CSI placed her as a consultant with a client of CSI, the Port Authority of New York and New Jersey (Authority), which became her work location. Claimant reported her hours to both CSI and the Authority, but she was paid solely by CSI. Claimant alleged the Authority asked her to amend prior audit reports, which she considered to be unethical and illegal. Fearing it could jeopardize her license, claimant allegedly complained to the Authority on numerous occasions but the situation did not change. On November 16, claimant quit the job. At no time did she discuss the situation with her employer CSI, or ask CSI to transfer her to another client, although other positions were available.

The testimony provided some pertinent details. Claimant resigned by email on November 16 without giving CSI any prior indication of difficulties with her assignment. The email simply stated that it was claimant's "formal resignation as Manager for Control Solutions" and that she would "contact the client" to inform it of her resignation. CSI inquired why claimant was resigning, and she responded that she encountered an ethical conflict and "could no longer remain on this project." Although claimant had been assigned to the Authority, CSI could have reassigned her to another client.

Claimant's application for unemployment benefits was denied by the Deputy Director of the Division of Unemployment Insurance, on the ground that she left work voluntarily without good cause attributable to the work. On review, the Tribunal agreed, finding that claimant "did not exhaust all steps available to preserve her employment before she severed the employer employee relationship." On June 5, 2013, the Board agreed. Claimant appeals.

II.

We must hew to our "limited" standard of review. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). "'[I]n reviewing the factual findings made in an unemployment compensation proceeding, the test is not whether an appellate court would come to the same conclusion if the original determination was its to make, but rather whether the factfinder could reasonably so conclude upon the proofs.'" Ibid. (citation omitted). "If the Board's factual findings are supported 'by sufficient credible evidence, courts are obliged to accept them.'" Ibid. (citation omitted). Our review "is limited to determining whether the agency acted arbitrarily, capriciously, or unreasonably." Lourdes Med. Ctr. of Burlington Cnty. v. Bd. of Review, 197 N.J. 339, 360 (2009).

The Unemployment Compensation Law, N.J.S.A. 43:21-1 to -24.30, provides that an individual shall be disqualified for benefits if "the individual has left work voluntarily without good cause attributable to such work." N.J.S.A. 43:21-5(a). "'[G]ood cause attributable to such work' means a reason related directly to the individual's employment, which was so compelling as to give the individual no choice but to leave the employment." N.J.A.C. 12:17-9.1(b). If claimant resigned "for 'good cause attributable to [the] work,' [s]he is eligible for benefits, but if [s]he left for personal reasons, however compelling, [s]he is disqualified under the statute." Utley v. Bd. of Review, 194 N.J. 534, 544 (2008) (quoting N.J.S.A. 43:21-3(a)). "The burden of proof is on the claimant to establish good cause attributable to such work for leaving." N.J.A.C. 12:17-9.1(c).

A.

Claimant argues that she had good cause attributable to work for leaving her employment. She alleges personnel at the Authority pressured her to act illegally and immorally. She cites her testimony in the telephonic hearing before the Tribunal.

We note that the only testimony at the telephonic hearing was from claimant and from representatives of CSI. There is no indication in the record that the Authority had notice of, or opportunity to appear at, the telephonic hearing, presumably because the Authority was not regarded as claimant's employer. For the same reason, the Authority has not been a party to the proceedings before the Tribunal, the Board, or this court. In this one-sided situation, we do not decide whether claimant's allegations are accurate. We need not do so, because even assuming the truth of claimant's allegations, her claim for unemployment benefits fails.

We emphasize that "[t]here is a clear public policy in this state to protect employees who protest illegal activity by their employers." Casciano v. Bd. of Review, 300 N.J. Super. 570, 577 (App. Div. 1997) (citing the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -11; Pierce v. Ortho Pharm., 84 N.J. 58 (1980)). In Casciano, the petitioner testified that his employer pressured him to intentionally overbill clients, and that his complaints to his employer did not remedy the situation. Id. at 572-74. We expressed "no doubt" that such pressure from an employer to engage in illegal or immoral activity would establish "good cause attributable to [the] work." Id. at 572. Although Casciano was "neither a discharge nor a 'whistleblower' case," we stressed that "public policy nevertheless requires that petitioner's legitimate distress when required by his employer to act illegally or immorally be recognized as good cause for leaving." Id. at 577.

Claimant attempts to analogize her case to Casciano by asserting that the Authority pressured her to act illegally and immorally, but the Authority was not her employer. The Tribunal ruled, and the Board affirmed, that "[e]ven though the claimant's physical work location was at the client's place of business, she was not employed by the client." Rather, the Tribunal and the Board found that her employer was CSI, which "determines employee placement and pays the employees" it assigns to provide temporary help to various clients.

Under the Unemployment Compensation Law, there are specific regulations for a temporary help service firm like CSI. N.J.A.C. 12:17-15.1 to -15.3. "'Temporary help service firm,' means a business which consists of employing individuals directly or indirectly for the purpose of assigning the employed individuals to assist the firm's customers in the handling of the customers' temporary, excess or special workloads[.]" N.J.A.C. 12:17-15.1. Such a firm pays "wages or salaries to the employed individuals, pays Federal Social Security taxes and State and Federal unemployment insurance taxes and carries workers' compensation insurance as required by State law." Ibid. Here, claimant conceded that she was paid by CSI, and it is undisputed that CSI was the entity responsible for withholding and paying taxes and unemployment contributions on her behalf. See N.J.S.A. 43:21-7.

The pertinent regulations also provide that employment by a temporary help service firm does not terminate merely because an employee's assignment to a particular customer ends. Rather, the employee must seek a new assignment and continuing employment from the temporary help service firm.1 Accordingly, "[i]f an individual whose claim is based on employment with a temporary help service firm is offered an assignment which constitutes continuing employment and fails to accept such work, the refusal of work shall be reviewed as a voluntary leaving work issue." N.J.A.C. 12:17-15.2(a). Similarly, such an individual's claim "shall be reviewed as a voluntary leaving of work issue if the individual fails to contact the temporary help service firm for reassignment by the end of the next business day after completion of the last assignment[.]" N.J.A.C. 12:17-15.2(b).2

Here, the Tribunal ruled, and the Board affirmed, that although claimant may have had a valid reason for wanting to stop working at the Authority, "at no time did she contact her employer [CSI] in an attempt to rectify the situation" or to ask for a new assignment. "Had the claimant asked she could have had continuing work in the form of a transfer to another client." Therefore, "claimant did not exhaust all steps available to preserve her employment" with CSI. These rulings were supported by the testimony.

Claimant testified she did not ask CSI to transfer her to another client because she would have had to disclose information to CSI and was concerned about facing defamation charges. CSI's representatives testified that claimant would have had "to tell us what was going on" in order to request a reassignment, and that CSI had a duty to investigate any ethics complaint.

Claimant failed to show that there was no way she could have provided CSI with sufficient information without committing defamation. "In a defamation action, truth is not only a common-law defense, but also 'absolutely protected under the First Amendment.'" G.D. v. Kenny, 205 N.J. 275, 293 (2011) (citation omitted). "Moreover, truth is a defense to a defamation action even if a report on a matter of public concern contains minor inaccuracies." Id. at 304. Therefore, claimant cannot use her alleged concern about potential defamation liability to excuse her failure to ask for a reassignment from her employer CSI.

B.

Claimant argues that she was the Authority's employee under the special employee and dual employment doctrines. Those doctrines "recognize[] that under workers' compensation, an employee can 'have two employers, both of whom may be liable in compensation. However, recovery against one bars the employee from maintaining a tort action against the other for the same injury.'" Walrond v. Cnty. of Somerset, 382 N.J. Super. 227, 234 (App. Div. 2006) (quoting Antheunisse v. Tiffany & Co., Inc., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)); Blessing v. T. Shriver and Co., 94 N.J. Super. 426, 429-30 (App. Div. 1967); 3 Larson, Workmen's Compensation chs. 67, 68 (2012). Those doctrines have been applied only as part of the law of worker's compensation and torts. See Galvao v. G.R. Robert Constr. Co., 179 N.J. 462, 464 (2004); Volb v. G.E. Capital Corp., 139 N.J. 110, 116 (1995). There is no authority that those doctrines have any application to unemployment compensation.

Claimant also cites the five factors considered to determine special employment status. See Hanisko v. Billy Casper Golf Mgmt., Inc., 437 N.J. Super. 349, 360-61 (App. Div. 2014) (citing Blessing, supra, 94 N.J. Super. at 429-30); Kelly v. Geriatric and Med. Servs., Inc., 287 N.J. Super. 567, 572 (App. Div.), aff d o.b., 147 N.J. 42 (1996). However, claimant does not contest that two of those factors do not apply here. She admitted that she had no "'contract of hire, express or implied, with'" the Authority, and that the Authority did not "pay[] the lent employee's wages." See Blessing, supra, 94 N.J. Super. at 430 (quoting 1A Larson, Workmen's Compensation 48.00, p. 710 (1966)).

Claimant does assert that the remaining three factors apply here. Those factors examine the employee's work for the special employer, and consider whether "'[t]he work being done is essentially that of the special employer,'" whether "'[t]he special employer has the right to control the details of the work,'" and whether the special employer "has the power to hire, discharge or recall the employee." Blessing, supra, 94 N.J. Super. at 430 (quoting 1A Larson, Workmen's Compensation 48.00, p. 710 (1966)); see Antheunisse, supra, 229 N.J. Super. at 404.

However, even assuming those three factors apply, they do not distinguish claimant from other claimants covered by the Unemployment Compensation Law's special regulations for employees of a temporary help service firm. While a temporary employee is assigned to work for the customer of a temporary help service firm, the work being done is essentially that of the customer, the customer has the right to control the details of the work, and the customer has the power to hire, discharge, or recall the temporary employee, for that assignment.

The pertinent regulations provide explicit conditions an employee of a temporary help service firm must satisfy to receive unemployment benefits. N.J.A.C. 12:17-15.1 to -15.3. We see no reason to contravene those specific regulations by importing worker's compensation and tort doctrines that are designed for other purposes. We therefore reject claimant's invocation of the inapplicable special employee and dual employment doctrines.

C.

Claimant lastly attacks the Board's conclusion that she "left work voluntarily." N.J.S.A. 43:21-5(a). She notes that "a compelled resignation does not constitute a voluntary separation from employment that disqualifies an unemployed person from receiving unemployment compensation." Lord v. Bd. of Review, 425 N.J. Super. 187, 189 (App. Div. 2012). She claims the Authority threatened to discharge her. Even if such a threat could compel her to cease working at the Authority, it did not compel her resignation from employment by CSI.

Claimant testified that "[e]veryone that worked for the Port Authority who was either laid off or fired is no longer with" CSI. The CSI representative disputed her assertion. Regardless, claimant's resignation from CSI deprived CSI of the chance to reassign her to other work. "A claimant has the responsibility to do whatever is necessary and reasonable in order to remain employed." Brady, supra, 152 N.J. at 214 (internal quotations omitted) (citation omitted). The possibility that CSI might not been able to reassign her was not "'cause sufficient to justify an employee's voluntarily leaving the ranks of the employed and joining the ranks of the unemployed.'" Ibid. (citation omitted).

Our ruling is without prejudice to whatever legal rights appellant may have under other statutes, such as CEPA.

Affirmed.

1 "'Continuing employment' means employment offered no later than the next business day following the end of the last assignment, within the scope of a written agreement or, if no written agreement exists, under similar terms and conditions of the last assignment; and with a definite starting date of no more than four weeks from the end date of the last assignment." N.J.A.C. 12:17-15.1.

2 These rules apply, with slight variations, whether or not the employee has a written contract with the temporary help service firm. N.J.A.C. 12:17-15.2 and -15.3.