On certification to the Superior Court, Appellate Division.
(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).
In this appeal, the Court must determine whether an employee's successful application for unemployment benefits should be given collateral estoppel effect so as to preclude the employer from claiming in the employee's subsequent action alleging a violation of the Conscientious Employees Protection Act ("CEPA") that the employee voluntarily left her employment.
Plaintiff Joanne Olivieri was employed as a part-time collection clerk by defendant Y.M.F. Carpet, Inc., owned by Jacob and Frieda Shemesh. In the course of Olivieri contacting customers who owed balances to Y.M.F. Carpet, a question arose concerning whether a former salesman had pocketed payments from Y.M.F. Carpet's customers. As requested by Y.M.F. Carpet, Olivieri prepared a Special Civil Part complaint against the salesman. The proofs differ as to what happened next. Olivieri claims she was asked to prepare false receipts to show the former salesman had received the sums reflected on the invoices. Frieda denied she ever prepared false receipts or asked Olivieri either to generate or authenticate any false documentation. Conflict over the facts became pronounced. Olivieri repeatedly demanded a full-time position, and her discussions with Jacob on that subject became confrontational. Those confrontations escalated into a series of letters from Olivieri to Y.M.F. Carpet complaining about her treatment, one of which was distributed to other employees. When Frieda asked to speak privately with Olivieri, the conversation degenerated into Olivieri yelling at Frieda. Frieda suggested that Olivieri go home and calm herself and return the next day so they could complete their discussion. Olivieri left the premises and never returned.
Olivieri applied for unemployment compensation benefits. Her application was denied on the grounds that she left work voluntarily without good cause. Olivieri appealed the denial of unemployment compensation benefits, and a hearing before an appeals examiner was held. Olivieri appeared at the hearing, and Frieda participated by phone. The hearing examiner found that Olivieri did not leave her job voluntarily and was not discharged for misconduct. Y.M.F. Carpet appealed to the Board of Review, which affirmed the decision of the Appeal Tribunal.
In the interim, Olivieri filed an action in the Law Division claiming that Y.M.F. Carpet retaliated against her by terminating her employment due to her refusal to provide false testimony or documentation in respect to the complaint against the former salesman. Before opening statements were made at trial, the trial court considered Olivieri's in limine application to offer the written unemployment compensation appeals examiner and Board of Review determination in her case in chief as proof that she was terminated from her employment with Y.M.F. Carpet. Y.M.F. Carpet opposed the application, claiming that the determination was not entitled to collateral estoppel effect. The trial judge found that the issue of whether Olivieri had voluntarily left the job had been adjudicated in a competent forum, and found that Olivieri was fired. The jury found in favor of Olivieri on her CEPA claim, and awarded her damages.
On appeal, the Appellate Division reversed. This Court granted Olivieri's petition for certification.
HELD: Unemployment compensation determinations are not to be given preclusive effect in other forums.
1. Whether administrative proceedings merit the deference accorded to final judgments is informed by the exceptions to the general rule of issue preclusion set forth in Restatement (Second) of Judgments §28 (1982). The paucity of the record concerning the proceedings before the unemployment compensation examiner leads to the conclusion that the third exception in the Restatement applies, that is "[a] new determination of the issue is warranted by differences in the quality or extensiveness of the procedures followed" in the administrative hearing and in the Law Division. The Court simply cannot be certain that only competent evidence was received by the unemployment compensation examiner or that the decision of the appeals examiner was fairly based on proofs adduced before him. (pp. 13-19)
2. The public policy considerations that inform unemployment compensation determinations are also relevant to determining whether to give collateral estoppel effect to an unemployment compensation determination. The very strengths of the unemployment compensation scheme in respect of the award of benefits become weaknesses: its speed of decision-making inhibits the deliberative process; its underlying purpose, the almost presumptive payment of unemployment compensation benefits, is at odds with a process that values a level playing field; and the disparity between what is at stake between an employer and an employee skews the results. Thus, fundamental differences abound between the unemployment scheme and other adjudicative decisions, differences that lead to the conclusion that unemployment compensation determinations are not entitled to collateral estoppel effect. (pp. 19-22)
3. Other courts have denied collateral estoppel effect to unemployment compensation determinations, and there is no principled reason to resist that great weight of authority. (pp. 22-25).
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN and WALLACE join in JUSTICE RIVERA-SOTO's opinion.
The opinion of the court was delivered by: Justice Rivera-soto
This appeal arises in the context of a claim that an employee was wrongfully terminated from employment in violation of the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8 (CEPA). We must consider whether the employee's successful application for unemployment compensation benefits should be given collateral estoppel effect so as to preclude the employer from claiming in the CEPA action that the employee voluntarily left her employment. If the employer were to succeed in that assertion, no actionable employment termination would have occurred for CEPA purposes. We hold that collateral estoppel does not apply to the determinations arising from unemployment compensation proceedings because of the nature and extent of the process afforded in and the limited purposes underlying those proceedings.
Starting in May 2000, plaintiff Joanne Olivieri*fn1 was employed as a part-time collection clerk by defendant Y.M.F. Carpet, Inc., a carpet, rug, bathmat, and linoleum tile wholesaler owned by Jacob (Jacob) and Frieda (Frieda) Shemesh.
In the course of plaintiff contacting customers who owed balances to defendant, a question arose concerning whether one of defendant's former salesmen, Shloami Levi (Levi), had pocketed payments from defendant's customers, which payments were not credited to the customers' accounts. Plaintiff advised defendant of this discovery.
According to plaintiff, in early February 2001, defendant requested that plaintiff prepare a Special Civil Part complaint against the former salesman, and plaintiff did so. After completing that task, plaintiff compiled the customer invoices needed to sustain the complaint against the former salesman. Here, however, the proofs differed. Plaintiff claimed that one of defendant's co-owners prepared false receipts corresponding to each invoice to show that Levi, the former salesman, in fact had received the sums reflected in the invoices, and requested that plaintiff sign and attach the false receipts to the invoices on file. Plaintiff testified that she refused to do so. In contrast, Frieda testified that plaintiff rightly discovered that some customers had produced payment receipts that were not reflected in defendant's accounts; that it was plaintiff who suggested the filing of the Special Civil Part complaint against Levi, including procuring and completing the necessary forms for defendant's signature; that plaintiff collected the documentary proofs necessary to prosecute the action against Levi; and that defendant was well satisfied with plaintiff's efforts. Frieda flatly denied she ever prepared false receipts or asked plaintiff either to generate or authenticate any false documentation.
In the seven months that followed the preparation of the Special Civil Part complaint, the conflict over the facts became pronounced. Plaintiff testified, and defendant concurred, that plaintiff repeatedly demanded a full-time position, with a concomitant increase in her compensation and benefits, and that her discussions with Jacob, one of defendant's co-owners, on that subject became confrontational. Those confrontations escalated into a series of letters from plaintiff to defendant complaining about her treatment at defendant's hands.*fn2 The last of these letters, dated August 31, 2001 and addressed to Yaron Shemesh, Jacob's and Frieda's son, starkly demonstrates plaintiff's view of the deteriorating employment relationship between plaintiff and defendant and, for that reason, is presented in full:
I confided in my legal advisor, about the hostile, exploitive, and modern type slavery work environment. I also mentioned, some jeopardizing health habitability issues, resulting in my work place. Conditions, which I have been forced to endure for the past 18 month. I did fail to mention, all the consumer advocacy internal financial matters.
Concerning Jacobs persistent inhumane, threatening aggressive behavior. My legal advisor, then suggested that I reach out to your father, Jacob Shemesh, in writing. I would have preferred to have taken other legal measures, or maybe even voicing it all to the Jersey Journal, but, given the ironic circumstances. Instead, I chose to extend to you all, the courteous consideration, of settling this very delicate issue quietly, amongst ourselves. Mind you, I am not just venting anger, I am serious in all my actions, and will stand strong in my convictions.
Although, I am not accustom, to easily forgive in a sensitive situation of this nature. I suppose, I could make an exception to that rule, just this once. I will of course... expect a full apology from Jacob, for his intimidating, and irresponsible behavior. An apology which he should not hesitate to render, at any given moment, being he is of the Jewish faith, and culture. He had no right... in stating, not once but, three times, that I was to lick the sole of his dirty shoe, for my employment there, and that I had been nothing but bulls shit. Stemming from a request I had made earlier that week, for a compensation in pay, vacations, medical/dental, or some form of employment benefits; which I felt, I had been entitled to.
As a loyal, long term employee at YMF, it was an extremely embarrassing equally hurtful scenario, more so... with the entire office staff present, witnessing the thick friction. An utterly, appalling, disgracefully humiliating, mentally and emotionally traumatic predicament indeed. No decent human character, should have to be subjected to any such shameless behavior. "I did not deserve that degrading insult!" Jacobs' cruel, downright mean, and very offensive verbal remarks, are not to be taken lightly. I certainly will not stand for it, I refuse to continue in allowing this misconduct.
Furthermore, anyone who practices religion, kindness, common decency, possessing dignity, social, and human qualities, should not have to tolerate this, or any type of belittling harassment, regardless of their religion, social status, race/creed, ethnic background, financial status, or even their sexual preference.
It is a well known factor, no secret, that Jacob, lacks formal education, it explains his lack of comprehensive communication. However, this does not excuse his repulsive behavior. The academic knowledge of any person, for lesser, or for greater, should never be altered, or impede their spiritual inner goodness, and is not acceptable in any level of society, much less the work place, where one needs to spend a third of their life time.
It is with these words of wisdom that I close; and leave Jacob Shemesh, to wallow in his remorse.
Inexplicably, when plaintiff returned from a vacation on September 6, 2001, she placed a copy of that letter on the desk of each of defendant's employees.
When Frieda learned of this action, she asked to speak privately with plaintiff, a conversation that degenerated into plaintiff yelling at Frieda. Frieda suggested that plaintiff in fact go home, calm herself and return the next day so they could complete their discussion. That same day, Frieda sent a letter to plaintiff that explained:
When you first came to Y.M.F. we hired you on a part time basis. Little by little you took it upon yourself to increase your hours and then even worked through lunchtime. There was also a period of time in which you had been convicted of a crime and missed out on many days of work due to having to appear in court and even being arrested.*fn3 At that time we could have dismissed you but chose instead to help you out by allowing you to keep your job despite the fact you ...