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Trupo v. Board of Review

Decided: November 5, 1993.


Appeal from a final decision of the Board of Review, Department of Labor

Pressler, Dreier and Kleiner. The opinion of the Court was delivered by Kleiner, J.s.c. (temporarily assigned).


[268 NJSuper Page 55] Claimant, Patricia S. Trupo, appeals a decision of the Board of Review affirming an Appeal Tribunal decision which declared her disqualified from unemployment compensation benefits and concluded that Trupo's weekly unemployment compensation benefit rate would be reduced to zero. Both Conclusions were predicated upon the Board of Review's interpretation of N.J.S.A. 43:21-5(a).

We affirm, however, the issue raised by Trupo as to her disqualification requires Discussion.

The Board of Review concluded that Trupo, having accepted an inducement for early retirement offered by her employer, Liberty Mutual Insurance Company, in its effort to substantially reduce its work force, had voluntarily left work without good cause attributable to such work, N.J.S.A. 43:21-5(a). As such, Trupo was disqualified from receiving unemployment compensation benefits.

Trupo worked as an office assistant for Liberty from February 22, 1982 until her retirement on February 28, 1992 at age sixty-one. In November 1991, Trupo, along with other employees, was offered an early retirement package by Liberty which included: (a) the addition of five years to the employee's age or work history, which would increase pension benefits; (b) company-paid medical benefits until age sixty-five, when an employee will qualify for Medicare; and (c) payment of $700 per month until age sixty-two, when an employee is entitled to social security benefits.

At her administrative hearing, Trupo admitted that she was not informed by Liberty that she definitely would be laid off if she did not accept the retirement package. Additionally, she knew that Liberty had not reached a decision as to which employees would be laid off or which employees would be transferred to other vacant positions within the company.

Trupo testified that she preferred to continue to work and had no particular present desire to retire. She expressed a fear that in the event of a job termination, she would become medically uninsured and as the head of her household, the prospect of not being medically insured was untenable. Additionally, she expressed a fear that if she elected to continue her employment, the probability of job termination was predictable, as she had the least seniority in her fourteen-employee department. As of the date of the early retirement offer, Trupo only had one year of work experience in her position as a clerical assistant. Trupo indicated that after considering her options, she believed she had no choice but to accept the early retirement proposal. She, therefore,

contends she should not be disqualified from receiving unemployment compensation benefits. This contention is novel and raises an issue of first impression.

Trupo's position is not without judicial precedent. In White v. Dir. of Division of Employment Sec., 382 Mass. 596, 416 N.E. 2d 962 (1981), the Supreme Judicial Court of Massachusetts concluded that if a claimant reasonably believes that he will be terminated if he does not accept an early retirement plan, his leaving work will not be viewed as voluntary under the Massachusetts statute, G.L. c. 151A, § 25(e)(1).

In White, the claimant with only six years seniority elected to take an early retirement proposal after he heard a rumor of an impending layoff if the work force were not reduced by early retirement. In explaining his decision to accept an early retirement proposal, White testified, "I could see that I would be laid off." The Massachusetts court determined, Id. 416 N.E. 2d at 964,

He knew that there would be layoffs based on seniority. He thought he would be the second person laid off, based on seniority, and that close to forty people would have to go. He took the incentive rather than accepting a layoff. If the claimant believed this layoff was imminent and if that belief was reasonable, a finding was required that the claimant did not leave his employment voluntarily.

The Massachusetts court therefore concluded it was required to remand the proceeding for an evidentiary hearing as to the reasonableness of the claimant's belief.

N.J.S.A. 43:21-5(a) provides in pertinent part that an individual shall be disqualified for unemployment benefits: "For the week in which the individual has left work voluntarily without good cause attributable to such work . . . ." "Good cause" is not statutorily defined, but our courts have construed the statute to mean "'cause sufficient to justify an employee's voluntarily leaving the ranks of the employed and joining the ranks of the unemployed.'" Domenico v. Bd. of Review, 192 N.J. Super. 284, 287, 469 A.2d 961 (App.Div.1983) (quoting Condo v. Bd. of Review, 158 N.J. Super. 172, 174, 385 A.2d 920 (App.Div.1978); ...

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