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Crystal Medical Billing, L.L.C. v. Board of Review


February 5, 2008


On appeal from the Board of Review, Department of Labor and Workforce Development, Docket No. 115,002.

Per curiam.


Submitted October 1, 2007

Remanded October 10, 2007

Resubmitted January 7, 2008

Before Judges Gilroy and Baxter.

In this appeal, Crystal Medical Billing (Crystal) challenges an October 3, 2006 Board of Review (Board) decision finding Crystal's former employee, Diana Nino, eligible for unemployment compensation benefits. Crystal argued that the Board's decision of October 3, 2006 should be reversed because it was not supported by substantial credible evidence in the record. Crystal further argued that Nino made prejudicial and inflammatory ex parte statements about Crystal to the hearing examiner after the hearing was closed and immediately after the employer's representative, Peyman Maghsoudolou, had left the room, thereby depriving Crystal of a fair hearing and necessitating a reversal. We directed a remand in order to develop a fuller record concerning those ex parte remarks. The remand has been completed. We now consider the appeal in its entirety and affirm.


Diana Nino was hired at Crystal Medical Billing in May 2005 as a "biller" in its medical claims department. Crystal terminated Nino on May 8, 2006, claiming that her work was unsatisfactory. She filed a claim for unemployment compensation benefits, and her claim was denied by a claims examiner, who determined that her poor work performance rendered her ineligible. Nino appealed, and a hearing before the Appeal Tribunal was conducted on June 28, 2006.

At that hearing, Nino testified that she had been discharged not because of poor work performance, but because she was pregnant and fell behind in her work due to illness, including a three-day hospitalization in April 2006 during the early part of her pregnancy. Maghsoudolou testified that Nino failed to follow instructions that required her to make additional efforts to collect funds owed to Crystal's clients. He asserted that the problems with Nino's work had commenced as early as November 2005, four months before she became pregnant in March 2006. Maghsoudolou testified that Crystal terminated Nino only after she failed to reduce her backlog of work, and that the termination was because of her poor work performance, not because she was pregnant.

During the June 28, 2006 hearing, Maghsoudolou attempted to show the hearing examiner his reports to verify that the problems with Nino's work commenced as early as November 2005. The hearing officer did not inquire of Maghsoudolou whether he wanted to introduce the reports into evidence, and the hearing officer did not examine the reports. Maghsoudolou acknowledged during his testimony that despite Nino's poor work performance that began in November 2005, he did not make any effort to discuss the problem with her until March 28, 2006. Maghsoudolou testified that when Nino's work had not improved in April, he terminated her on May 8, 2006. At the end of the hearing and after the record was closed, the following colloquy occurred between Nino and the hearing examiner:

CLAIMANT: You [know] what's the funny part, that we billed for the OBGYN and then when I lost the baby, Peyman gave me my job back.

When I went on disability the 24th of May that the doctor (inaudible). He says Diana I don't need the (inaudible), I'm going to give you your job back when you finish your pregnancy and complete your disability till your done. He found out the baby died the same day and then he tells me you know since you're no longer pregnant, see what you can do and that's when I told him I'm seeking legal action. I do have an attorney.


CLAIMANT: But I just feel like, you knew I was out sick. We billed for my illnesses and you're going to turn around and say I haven't done the work. I wasn't even here.

You should set me up with a laptop in my house if that's what you wanted me to do or set me up in the hospital with a laptop.

Anyway, thank you so much.

EXAMINER: You're welcome.


After the hearing was concluded, the Appeal Tribunal reversed the denial of benefits, finding that any deficiencies in Nino's work were not willful, but were instead beyond her control due to the complications of her pregnancy. The hearing examiner rejected Crystal's contention that Nino's decline in performance was caused by her constant personal phone calls and internet use during office hours. Specifically, the hearing examiner held that Crystal did not satisfy its burden of proof because Maghsoudolou had never spoken to Nino about her phone and internet use before the company terminated her employment. On October 3, 2006, the Board upheld the Appeal Tribunal's decision. Crystal appealed.

In light of our uncertainty about whether the employer's representative had already left the room when the exchange between Nino and the hearing examiner took place, we declined to decide the ultimate issue of whether the Board's decision that Nino was entitled to unemployment compensation benefits should be affirmed or reversed. Instead, we concluded that no decision should be reached until the circumstances surrounding the colloquy at the end of the hearing were resolved. We accordingly remanded the matter to the same hearing examiner who conducted the proceedings on June 28, 2006, and directed that she file a report with this court explaining whether Maghsoudolou was still present at the time Nino made her remarks. We specified that the hearing examiner should give each side the opportunity to present testimony and argument on this question prior to submitting her report to this court.

In response to our instructions, the Board reopened the matter, set aside its original decision and remanded the matter to the Appeal Tribunal for a new hearing and decision. At that new hearing, which was conducted on November 19, 2007, only the employer appeared.*fn1 The Board filed a final decision with us on January 7, 2008.*fn2 The Board concluded that: (1) the record from the June 28, 2006 hearing demonstrates that Nino was not disqualified for unemployment benefits; and (2) Nino's ex parte comments to the hearing examiner played no role in the hearing examiner's decision in Nino's favor. In relevant part, the Board's January 7, 2008 decision states:


The purpose of the Court's remand was to determine if the ex-parte communication influenced the Appeal Tribunal in making the initial decision. The Appeal Tribunal conceded that an ex-parte communication occurred but indicated that the communication did not serve to influence her decision and we are satisfied that such is the case. The employer attempted, without success, to supplement the record with additional charges against the claimant, but we are satisfied that the earlier hearing provided a complete record of the circumstances relating to the claimant's separation. Therefore, we affirm the Appeal Tribunal decision holding the claimant not disqualified for benefits in accordance with N.J.S.A. 43:21-5(b).


The claimant remains not disqualified for benefits in accordance with N.J.S.A. 43:21-5(b).


We review Crystal's contentions in accordance with our standard of review. The Board's determination that Nino was not disqualified from receiving benefits must be affirmed unless it is "arbitrary, capricious or unreasonable" or is not supported by substantial credible evidence in the record as a whole. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). In determining whether an agency's decision is supported by substantial credible evidence, we are obliged to accord deference to the agency's fact-finding. Associated Util. Servs., Inc. v. Bd. of Review, 131 N.J. Super. 585, 588 (App. Div. 1974).

An appellate court "may not vacate an agency's determination merely because of doubts as to its wisdom or because the record may support more than one result." Petition of County of Essex, 299 N.J. Super. 577, 591 (App. Div), certif. denied, 151 N.J. 463 (1977), cert. denied, 522 U.S. 1111, 118 S.Ct. 1043, 140 L.Ed. 2d 108 (1998). If the court finds sufficient credible, competent evidence in the record to support the agency's conclusions, then the court must uphold the agency's findings. Clowes v. Terminix Int'l., Inc. 109 N.J. 575, 587 (1988).

This appeal requires us to decide whether, as the Board determined in its January 7, 2008 decision, Nino is eligible to receive benefits without disqualification because she did not engage in behavior constituting a discharge for misconduct connected with the work. A section of the New Jersey Unemployment Compensation Law, N.J.S.A. 43:21-5(b), provides that an individual shall be disqualified for unemployment benefits:

For the week in which the individual has been suspended or discharged for misconduct connected with the work, and for the five weeks which immediately follow that week . . . .

The statute does not define misconduct, but we have held that in order to constitute misconduct, an employee's action must be willful, deliberate and intentional. Demech v. Bd. of Review, 167 N.J. Super. 35, 38 (App. Div. 1979). An employee engages in disqualifying misconduct if he or she commits an act which constitutes: wanton or willful disregard of the employer's interest, a deliberate violation of the employer's rules, a disregard of standards of behavior which the employer has the right to expect of his employee, or negligence in such degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of the employer's interest or of the employee's duties and obligations to the employer. [Beaunit Mills, Inc. v. Bd. of Review, 43 N.J. Super. 172, 183 (App. Div. 1956), certif. denied, 23 N.J. 579 (1957).]

The applicable Department of Labor regulations reiterate that definition of misconduct.*fn3

Here, the record supports the Board's determination that Nino did not engage in disqualifying misconduct. Nino was not advised that there were any problems with her work until March 28, 2006. Thereafter, she was given one month to correct her alleged work deficiencies, but was unable to do so during April due to her illness and hospitalization, which were the result of her pregnancy. We agree with the Board's conclusion that the record does not support a finding that Nino's failure to complete her work was willful, knowing, or an intentional disregard of her obligations to her employer. As we held in Beaunit Mills, supra, 43 N.J. Super. at 182, mere inefficiency, unsatisfactory conduct, or a failure of performance as the result of inability or incapacity does not constitute misconduct.

Here, there has been no showing by Crystal that Nino's alleged lack of productivity was intentional rather than the result of illness. Crystal gave Nino no warnings about her work until the end of March 2006. When she was finally advised that her work was unsatisfactory on March 28, 2006, she was given only one month to correct all of her alleged deficiencies even though Maghsoudolou knew that she was ill due to complications from her pregnancy. During April 2006, Nino was hospitalized for three days, making it even more difficult for her to catch up on her work.

Accordingly, the Board's final decision, holding that Nino did not engage in misconduct connected with the work, is supported by substantial credible evidence in the record.


Next, Crystal argues the hearing examiner improperly denied Crystal permission to introduce its reports at the June 2006 hearing. Although Maghsoudolou apparently brought a report with him to the hearing, he never requested that it be made a part of the record. Moreover, the introduction of productivity reports would not have changed the outcome of the hearing. In its decision, the Appeal Tribunal did not dispute Crystal's contention that Nino was behind in her work, but rather found that her failure to complete her assignments was the result of illness and not a deliberate act as required by the disqualification provisions of N.J.S.A. 43:21-5(b). We thus find no basis upon which to disturb the Board's decision.


Finally, Crystal argues that Nino's improper ex parte comments to the hearing examiner require a reversal of the Board's final decision in Nino's favor. While Nino's comments were improper, we have been presented with no meritorious basis upon which to conclude that Nino's comments caused the hearing examiner to reach a result different from that which the examiner would have reached had Nino not made those comments. Moreover, the evidence in the record amply supports the Board's conclusion that Nino's actions in failing to complete her work were not the result of the deliberate acts for which N.J.S.A. 43:21-5(b) requires disqualification.


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