On appeal from the adoption of N.J.A.C. 12:17-9.6 by the Department of Labor.
The opinion of the court was delivered by: Axelrad, J.T.C. (temporarily assigned).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Coburn, Axelrad and R.B. Coleman.
This appeal challenges the facial validity of N.J.A.C. 12:17-9.6, which provides that employees who leave their employment to participate in "a written voluntary layoff and/or early retirement incentive policy or program . . . so that another employee may continue to work" are qualified to receive unemployment compensation benefits. We hold the regulation is invalid as a matter of law as it contravenes the legislative policies underlying the Unemployment Compensation Act, N.J.S.A. 43:21-1 to -71, and is inconsistent with the Supreme Court's interpretation of N.J.S.A. 43:21-5(a).
On July 7, 2003, the New Jersey Department of Labor ("DOL")*fn1 adopted the challenged regulation, N.J.A.C. 12:17-9.6, which provides:
(a) Notwithstanding any other provision of this subchapter, when an employer has a written voluntary layoff and/or early retirement incentive policy or program in effect during a reduction-in-force that permits or induces an employee to leave work so that another employee may continue to work, the following applies:
1. The individual who participates in the program will not be subject to disqualification for voluntarily leaving work in accordance with N.J.S.A. 43:21-5(a); and
2. The individual must otherwise meet all of the other eligibility requirements of the Unemployment Compensation Law to be eligible to receive unemployment insurance benefits.
Verizon*fn2 filed a timely notice of appeal challenging the validity of the regulation as violative of the Unemployment Compensation Act ("Act"). R. 2:2-3(a)(2).*fn3 In its appeal, Verizon argues that N.J.A.C. 12:17-9.6 is invalid and ultra vires of the DOL's authority because: (1) it is inconsistent with the express language of N.J.S.A. 43:21-5(a); (2) it contravenes the legislative policies underlying the Act and is inconsistent with N.J.S.A. 43:21-5(a) as interpreted by the New Jersey Supreme Court in Brady v. Board of Review, 152 N.J. 197 (1997); (3) it is inconsistent with and contravenes N.J.A.C. 12:17-9.1; and (4) it disregards the express requirements set forth in N.J.S.A. 43:21-5(c).
According to Verizon, on its face the regulation contravenes the unequivocal Legislative policy that employees are disqualified from receiving unemployment compensation benefits unless they are "involuntarily" terminated from employment. This is so because the regulation operates to qualify employees for unemployment compensation benefits who voluntarily choose to resign their positions of employment to accept lucrative early retirement or separation packages, not because they are threatened with an imminent loss of their own employment, but simply because they choose to resign "so that another employee may continue to work." N.J.A.C. 12:17-9.6(a). Furthermore, according to Verizon, in a manner inconsistent with the Act, specifically N.J.S.A. 43:21-5(c), this regulation impermissibly allows employees to qualify for unemployment compensation benefits where their jobs remain open and available, but they refuse continued employment.*fn4
The DOL responds that the regulation is consistent with the agency's statutory authority to administer the unemployment compensation law and that Verizon has failed to satisfy its burden of overcoming the strong presumption of validity enjoyed by administrative regulations. According to the DOL, N.J.A.C. 12:17-9.6 is consonant with the language of the Act and its purpose of providing benefits to persons who satisfy certain work and earnings requirements and who subsequently become involuntarily unemployed. The DOL argues the challenged regulation provides a practical response to the involuntary loss of "a job" caused by workforce reduction in today's era of corporate downsizing, and thus is consistent with the legislative policies underlying the unemployment compensation law as interpreted ...