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Brady v. Board of Review

December 22, 1997

WILLIAM F. BRADY, JR., SYLVIA ALBARRAN, HERBERT ALEXANDER, CARMEN ALICEA, FREDERICK ALLEN, BEATRICE AMISON, GERALD AMISON, SHIRLEY G. ANDERSON, JOSEPH ANDREWS, JR., MARY L. ARCAMONE, MARY AUSTIN, JAMES BAILEY, DUDLEY BARCALOW, JOSE J. BEAYCHAMPS, MARIETTA BERENATO, JOSEFA BIELSKI, ANNA BIJACSKO, JOHN BLACK, HAROLD BODDEN, SHIRLEY BOTTREL, LEON BOYER, RAYMOND BOYZATH, FREDDIE BRIMLEY, HERBERT BROOKER, JAMES H. BROWNE, ROBERT W. BRYNER, AUGUSTA BUDD, HECTOR G. BURGOS, JOHN E. BURRIS, JAMES CALDWELL, MARIE CAPRIOTTI, ROBERT CASE, MARGARET CHAMBUS, PATRICIA CHARYAK, MATTEO CIPRIANO, BENJAMIN COLE, THOMAS J. COLEMAN, FRED COMO, WILLIAM R. CRAFT, JOANN CREA, LUZ CRUZ, MARY L. CZAP, JOSEPH DALY, SOPHIE DARDZINSKI, KARL H. DEIBLER, BARBARA A. DERRY, MARGAREE DILLARD, EDWARD DOROTA, ANTHONY DOTO, ANATOL DOWBNIA, DAVID J. DOWNING, CHARLES P. DRAGOS, JAMES J. DUNCAN, MARY F. EALY, KURT E. EDER, CUSTODIA FEIJO, SYLVIA FERGUSON, ANTHONY FERRARE, JUAN FLORES, RAFAEL GARCIA, LESTER GLASCOE, DELORES GLAZEWSKI, ELFRIEDE HALKO, MURRAY A. HALPERN, GERALDINE HAMBLEY, BARBARA A. HARDEN, CHARLOTTE HAYDEN, WALTER HEARNS, ROBERT G. HENNESSEE, THOMAS HORAN, EDWARD HUGO, RICHARD HUTCHINSON, VINCENT IMMORDINO, SARAH C. INNISS, JENA IORIO, BENNIE ISOM, ANDRENA L. JOHNSON, RONALD KASA, DOROTHEA KATO, MARGARET M. KENNEDY, JOHN KOVACH, MARIVA KUHN, SAM LAGARES, RONALD LAWRENCE, CHANG LEE, ANDY LEONARSKI, WALTER LOMAX, ARMAND LORETUCCI, JACQ. MARINELLO, CHARLES B. MARKS, DOLORES MARLIN, MARGARET MASON, JOHN MCELLINNEY, JUAN MEDINA, JOHN MELLODGE, MARY MEROVICH, EUGENE J. MINICH, MINERVA MONTERO, HECTER M. MORALES, MINERVA MORALES, CORNELIUS MORROW, MARY A. MURPHY, CARMELA C. NICKELS, PETER NICOALI, STANLEY OLSCHEWSKI, EDWARD J. PALLAY, RONALD J. PALMIERI, JAMES S. PETRUCELLI, HARRY PHILLIPS, MATHEW PIERRE, FREYA POLIZIANA, ARTHUR S. POPP, WILFRED W. POWERS, FRANK PRASAK, ROCHELLE PRITCHARD, GIUSEPPE PUGLISI, CARMEN QUILES, ALICIA QUINONES, FREDERICK RAINER, EVELYN RAMSEY, RAYMOND R. RAWA, STANISTAW REMBOWSKI, ASTEN L. RICHARDSON, ROBERT R. ROBINSON, MINNIE SANDERS, ROMAN SATURNINO, KENNETH SCHNEIDER, ANTHONY SCOTT, JASPER SCOTT, JOSEPHINE SECKINGER, THOMAS P. SEHENUK, JOSEPH SEROCK, ELIZABETH SMITH, FRANK SMITH, DOLORES STEWART, WALTER STREHLOW, TAMMY STRYCHARZ, BARBARA SYKES, IDA R. TAYLOR, ANTHONY TESTA, MARY THOMAS, GILBERT TILTON, GEORGE TITUS, EMANUEL TRAMONTANA, EVELYN L. TREIBLY, JOHN TRIPA, FRANK TUCCILLO, EMMA M. TWYMAN, ELIZ. O. VANDEWATER, JAMES L. VANDEWATER, PATRICIA VELEZ, GEORGE VOILAS, ROBERT WALKER, MARIE WALSH, JOHN WALTER, LORETTA WASHINGTON, DELES WATSON, GLADYS WILLIAMS, LIZZIE WILLIAMS, MARGARET WILLIAMS, SHIRLEY WILLIAMS, THOMAS WILLIAMS, ROSE WINROW, GEORGE M. WOODWARD, BONNIE L. WRIGHT AND ROSCOE N. WRIGHT, CLAIMANTS-RESPONDENTS,
v.
BOARD OF REVIEW AND GENERAL MOTORS CORPORATION, INLAND FISHER GUIDE DIVISION, RESPONDENTS-APPELLANTS.



On certification to the Superior Court, Appellate Division.

The opinion of the Court was delivered by Garibaldi, J. Chief Justice Poritz and Justices Handler, Pollock and O'hern join in Justice Garibaldi's opinion. Justice Coleman filed a separate Dissenting opinion in which Justice Stein joins. Coleman, J., Dissenting.

The opinion of the court was delivered by: Garibaldi

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

William F. Brady, et al v. Board of Review, et al (A-28/29-97)

Argued October 6, 1997 -- Decided December 22, 1997

GARIBALDI, J., writing for a majority of the Court.

The issue on appeal is whether claimants, who elected to participate in an early retirement plan, "voluntarily" left work "without good cause attributable to such work," thereby rendering them ineligible for unemployment benefits, pursuant to N.J.S.A. 43:21-5(a).

Claimants are former employees of the Inland Fisher Guide Division of the General Motors Corporation (GM), located in Trenton, New Jersey (the Trenton plant). In December 1992, the Trenton plant announced to its employees that GM intended to close the plant by the end of 1993. A short time later, GM announced it was offering a special accelerated retirement plan for eligible employees nationwide. The offering of this retirement incentive program was not related to the projected closing of the Trenton plant. To be eligible for the retirement initiative, workers were required to have at least ten years of service with GM and be at least fifty years of age.

From December 1992 until the end of February 1993, various statements about the anticipated Trenton plant closing were issued that stressed that the plant would in fact be closing. In February 1993, a memo was issued describing the projected layoff schedule, with the first large layoff set to occur in May or June of 1993. Layoffs were to be based on seniority status, with the most senior displacing those with lesser seniority.

Two days after the March 1, 1993 deadline for electing early retirement, GM announced that the Trenton plant would remain open. No layoffs occurred. Had the plant shut down, laid off employees could have applied for unemployment benefits and also would have received Supplemental Unemployment Benefits (SUB) provided by GM until early retirement was available at the age of fifty-five or until SUB ran out of funds. During this time, the workers' medical benefits, except dental coverage, would have continued.

After accepting the early retirement package, claimants filed separate claims for unemployment benefits. The Deputy Director of the Division of Unemployment and Disability Insurance (Deputy) found claimants eligible for benefits, reasoning that claimants left work with good cause attributable to the work because the layoffs were imminent when they elected early retirement. GM filed a mass appeal from the Deputy's determination and the Appeal Tribunal affirmed.

GM appealed to the Board of Review, Department of Labor (Board). The Board reversed, rejecting the premise that GM had placed such a strong temptation in front of the workers that it was the only prudent course of action available. The Board emphasized that had the claimants opted not to retire and eventually had been laid off, they would have been in essentially the same situation as they were after accepting early retirement. Because they did not stand to suffer financially by not accepting the incentive package, claimants were not in a position of having had no reasonable choice but to retire. The Board distinguished this case from Trupo v. Board of Review, wherein the Appellate Division reasoned that a worker facing the daily fear of future employment layoff may have good cause to leave if the fear of imminent layoff and loss of future medical benefits were based upon "definitive objective facts." The Board found that the prospective layoff at the Trenton plant was not imminent given the substantial amount of time that claimants could have continued to work based on their seniority status.

The Appellate Division reversed the decision of the Board, finding that claimants' fear of layoff was based on the unequivocal statements made by GM that the plant would be closing by the end of 1993. The court observed that by not accepting the incentive package the claimants would have been required to give up complete health insurance coverage and pension and that there was no assurance of any transfer rights to other GM facilities by the deadline for selecting the incentive package. According to the Appellate Division, the Board's decision that claimants "voluntarily" left work "without good cause attributable to such work" could not be sustained on the record. The court also held that to avoid double recovery, the award of unemployment benefits had to be reduced by the amount of pension or retirement pay received by claimants.

The Supreme Court granted certification.

HELD:

Claimants, who elected to participate in an early retirement plan, "voluntarily" left work "without good cause attributable to such work," thereby rendering them ineligible for unemployment benefits.

1. If an agency's factual findings are supported by credible evidence, a court must accept them. A court can intervene only when the agency action is clearly inconsistent with its statutory mission or with other State policy. Here, the Court addresses whether the Board's action violated the express or implied legislative policies of New Jersey's Unemployment Compensation Act (Act), and whether, in applying those legislative policies, the Board erred in reaching its Conclusion. (pp. 12-14)

2. The underlying mission of the Act is to afford protection to workers against the hazards of economic insecurity due to involuntary unemployment. Although the Act is to be liberally construed, the unemployment insurance trust fund is to be preserved against claims by those not intended to share in its benefits. (pp. 14-16)

3. The legislative history of N.J.S.A. 43:21-5(a) supports the Conclusion that claimants are not entitled to unemployment benefits. In 1961, the statute was amended to specifically disqualify claimants who left work for purely personal reasons. Good cause is construed to mean cause sufficient to justify an employee's voluntarily leaving the ranks of the employed and joining the ranks of the unemployed. The test of "ordinary common sense and prudence" applies to determine whether an employee's decision to leave work constitutes good cause. Good cause is shown when the employee demonstrates: a subjective fear of imminent layoff based on definitive objective facts; and that he or she would suffer a substantial economic loss. (pp. 16-22)

4. Claimants bear the burden of proving that they left work voluntarily with good cause attributable to such work. Based on their seniority and associated "bumping rights," claimants would have been given a substantial amount of time to continue working at the Trenton plant. Those contractual seniority rights and the additional transfer rights undermine the finding that the layoffs were imminent. While claimants may have had a subjective fear of layoff, that fear was not based on definitive objective facts. (pp. 23-25)

5. Claimants have not established that they would have suffered significant economic harm if they elected not to retire. The Board's determination that claimants would not incur a substantial economic loss or loss of medical benefits is supported by the substantial credible evidence in the record. That Conclusion coupled with the finding that the layoffs were not imminent disqualified claimants from receiving unemployment benefits. (pp. 25-27)

6. Claimants are not the type of workers the Act is designed to protect. They were not involuntarily laid off and receiving no income. The decision of the employees to accept the incentive package was an entirely personal one. The findings of the Board were supported by sufficient credible evidence in the record, were not arbitrary or capricious, and comport with public policy and the legislative history of the Act, specifically, N.J.S.A. 43:21-5(a). (pp. 27-29)

Judgment of the Appellate Division is REVERSED and the decision of the Board of Review is REINSTATED .

JUSTICE COLEMAN, Dissenting, in which JUSTICE STEIN joins, is of the view that, under these circumstances, claimants established a reasonable belief of a real, substantial, and imminent risk of losing their jobs. Furthermore, a finding that claimants are eligible to collect unemployment benefits would not result in double recovery because the statute requires a set-off based on pension or retirement payments received by claimants.

CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK and O'HERN join in JUSTICE GARIBALDI'S opinion. JUSTICE COLEMAN filed a separate Dissenting opinion in which JUSTICE STEIN joins.

The opinion of the Court was delivered by

GARIBALDI, J.

At issue in this appeal is whether claimants, who elected to participate in an early retirement plan, "voluntarily" left work "without good cause attributable to such work," N.J.S.A. 43:21-5(a), thereby rendering them ineligible for unemployment benefits. Claimants are former employees of the Inland Fisher Guide Division of the General Motors Corporation (GM), located in Trenton, New Jersey (Trenton plant). In December 1992, the Trenton plant announced to its employees that GM was offering a special accelerated retirement plan for eligible employees nationwide. After receiving notice from management that GM intended to close the Trenton plant by the end of 1993, claimants accepted the early retirement plans. Subsequently, they sought and were granted unemployment compensation benefits. Although the Board of Review reversed the award of benefits, finding that claimants were disqualified under N.J.S.A. 43:21-5(a) because they "left work voluntarily without good cause attributable to such work," the Appellate Division concluded that claimants established "good cause" and thus were qualified for unemployment benefits. We granted certification to both parties, 148 N.J. 462 (1997); 148 N.J. 463 (1997), and now hold that claimants are disqualified from collecting benefits.

I

On or about December 3, 1992, GM notified its employees that it intended to close the Trenton plant permanently by the end of 1993. A short time later, GM announced an incentive retirement program throughout the corporation as a means of shifting workers from its jobs reserve bank program to production positions vacated by those who elected early retirement. Workers in the reserve bank were those who, rather than being laid off, were placed in nonproduction positions. The impetus behind the incentive retirement program was to create openings to avoid laying off those workers from the depleting jobs bank program. The retirement initiative was offered at those GM plants nationwide with a reserve bank and was unrelated to the projected Trenton plant closing. At the time of the announcement, the Trenton plant had approximately 400 people in its reserve bank; Trenton applied ...


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