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Gourley v. Board of Review

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


June 18, 2008

THOMAS A. GOURLEY, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON,*FN1 RESPONDENTS-RESPONDENTS.
SHIRLEY BELLINGER, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
ROBERT D. HIGHET, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
TARA Y. JOHNSON, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
DIANNA SMITH, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
THOMAS FAGAN, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
MARIA VAZQUEZ, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
DEBRA ESOLA, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
STEPHANIE KUCHARSKI, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
LINDA PALUMBO, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
JENNIFER ESPOSITO, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
NEIL R. SMITH, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
HOPE CALDERON, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
JOHN SIMOSKEVITZ, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
EMMA L. GOTHIE, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
PATRICIA HAMILTON, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
ANNIE D. LYTCH, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
BARRY W. MACKAY, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
DEBORAH R. THOMAS, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.
BETTYLYNN PELLETT, PETITIONER-APPELLANT,
v.
BOARD OF REVIEW, DEPARTMENT OF LABOR AND VERIZON, RESPONDENTS-RESPONDENTS.

On appeal from the Board of Review, Department of Labor.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted February 26, 2008

Before Judges Fuentes, Grall and Chambers.

These are back-to-back appeals, consolidated for the purpose of this opinion. Plaintiffs are former Verizon employees who voluntarily accepted severance or early retirement packages offered by Verizon in an attempt to reduce its staff in certain areas. Numerous employees accepted these packages for various reasons, including a fear of involuntary termination, if these incentive packages did not produce the staff reductions anticipated by Verizon.

Many of the employees who accepted these severance packages applied for unemployment compensation benefits. The Department of Labor ("DOL") Division of Unemployment Insurance, awarded benefits to some claimants, but denied benefits to others. These determinations were then appealed by either Verizon or the employees to the DOL's Appeal Tribunal. On appeal, the cases were consolidated; at the completion of a mass hearing, the Tribunal determined that all of the claimants were disqualified from receiving benefits under N.J.S.A. 43:21-5(a), because they had "voluntarily left work without good cause attributable to such work." The Board of Review affirmed the decision of the Appeal Tribunal. The cases before us here concern twenty claimants who have appealed the Board's decision.

Although these appeals have been consolidated for the purpose of addressing the legal issues raised therein, the unique facts of each case have been carefully and individually examined. We now affirm the final decision of the Board of Review as to all twenty cases before us.

During the time period relevant to this appeal, Verizon offered its employees two different voluntary separation packages: (1) the Management Voluntary Separation Program ("MVSP") to its management employees; and (2) the Enhanced Income Security Plan ("EISP") to its non-management or bargaining unit employees. The central issue before us is whether employees who accepted either the MVSP or the EISP, are eligible to receive unemployment compensation benefits.

Before addressing the individual claims, we will summarize, from a global perspective, the history of Verizon's staffing decisions, and how those decisions gave rise to the current state of affairs.

I. Merger and Layoff Protections

In 1996, Bell Atlantic, Verizon's predecessor in interest, was in the process of merging with Nynex. Representatives from the two collective bargaining agents, Communications Workers of America ("CWA") and the International Brotherhood of Electrical Workers ("IBEW"), Local 827, expressed concerns that the merger would negatively affect the terms and conditions of their members' employment status, specifically job security.

In response to these concerns, on November 5, 1996, Bell Atlantic entered into an agreement entitled "An Agreement Concerning Issues Related to the Bell Atlantic/Nynex Merger" with the CWA and the IBEW, Local 827. The agreements contained staffing level protections, specifying that the merger would not result in layoffs, forced transfers requiring a home relocation or downgrades or demotions as a result of any company initiated "process change." The term "process change" included events such as "process re-engineering initiatives, workplace consolidations, office closings, contracting, shifting of bargaining unit work, network upgrades, and other business changes developed to accommodate new technology or to improve productivity, efficiency or methods of operation."

The merger agreements were originally only valid until 1998; the agreement with CWA was extended until August 5, 2000 and the agreement with IBEW (Locals 827 and 1944) was extended to December 31, 2000.

Bell Atlantic and GTE merged to form Verizon in the summer of 2000. Verizon agreed to renew the layoff protections provisions in the agreements with CWA and IBEW Locals 827 and 1944, subject to certain enumerated modifications. Under this agreement, Verizon reaffirmed that it could not layoff, force transfers that required relocation, or downgrade employees because of a "process change." However, the modified agreement permitted Verizon to take these actions, if an employee surplus was caused by an "external event." By way of example, an "external event" would include a "state or federal regulatory change that causes the Company to abandon a line of business, an inter-exchange carrier take back of billings and collections, or the loss of a major telecommunications network contract."

II. 2002 EISP Offer and Layoffs

In September 2002, Verizon notified both IBEW Local 827 and CWA in writing of a staffing surplus, and its intention to offer an EISP as an incentive for separation. The notice also made clear that Verizon intended to proceed to involuntary layoffs, if the EISP offer did not reduce the workforce sufficiently. The notice did not specify that the staffing surplus was created by or attributable to an external event. However, Verizon advised the unions orally that the layoffs were due to an external event. Specifically, Verizon claimed that the staffing surplus was caused by external factors such as an economic recession, technological product substitution, state and federal regulatory changes, and competition.

The EISP package resolved the surplus involving CWA employees, but there remained a significant surplus of IBEW employees. Verizon informed IBEW that it intended to layoff "all temporary occasional term employees as well as regular employees with less than one year of service" effective November 6, 2002. Pursuant to the layoff procedure language in the IBEW contract, Verizon then made a second EISP offering. The secondary offering still did not resolve the surplus, and Verizon proceeded to layoff additional employees, effective December 19, 2002. In December 2002, Verizon also laid off union employees in New York and Pennsylvania.

Verizon laid off approximately four hundred New Jersey employees in November 2002 and December 2002, all of whom were members of IBEW Local 827. The IBEW challenged the layoffs first by seeking a federal court injunction, and then by filing a grievance seeking arbitration. IBEW challenged the layoffs on numerous grounds, including that the layoffs had not been triggered by an external event, as defined in the agreement.

Unions in New York and Pennsylvania, including the CWA in New York, had contracts containing similar language. These unions also challenged the layoffs, claiming that they were not triggered by an external event. The challenge brought by CWA in New York was the first resolved; an arbitrator ruled on July 10, 2003 that the layoffs were not based on "external events" as defined under the parties' agreement. Verizon was directed to reinstate the laid off New York employees and compensate them for their losses.

The language construed by the arbitrator in the New York agreement was remarkably similar to that included in the New Jersey CWA and IBEW agreements. Given the similarity in both the contract language and the factual circumstances, Verizon decided to offer reinstatement to all the New Jersey IBEW Local 827 employees who had been laid off in late 2002. The majority of the laid off employees returned to work on July 30, 2003.

Faced again with a staffing surplus, Verizon negotiated with both IBEW and CWA in New Jersey to include incentives in the labor contracts to induce employees to separate voluntarily from the company. Through negotiations, Verizon and the unions agreed that the layoff protections would not apply to employees hired after August 3, 2003, term employees, temporary employees, or occasional employees.

III. October 2003 MVSP Offer

In October 2003, Verizon offered two new voluntary separation packages: (1) a Management Voluntary Separation Program ("MVSP") to its management employees; and (2) another EISP to its non-management or bargaining unit employees.

In a notice dated October 1, 2003, Verizon announced the MVSP to management employees: "[w]e are pleased to inform you that you are among a group of employees who are eligible to volunteer for a reduction in force (RIF)." The MVSP offered both a pension enhancement and a severance program. Eligible employees had until November 14, 2003 to decide whether or not to elect to participate.

The MVSP was also offered to certain employees of Verizon Information Systems ("VIS"), who are covered by a separate collective bargaining agreement between the CWA and Verizon. The CWA collective bargaining agreement for VIS employees did not contain a "no layoff clause" precluding involuntary layoffs.

In early September 2003, Verizon had terminated between forty to fifty VIS information technology employees. The package sent to the VIS employees, describing the details of the MVSP, contained the following information in its "Questions and Answers" section:

2. Why is VIS providing the Voluntary Separation Program for Management Employees? The program was initially developed for Verizon Telecom business to reduce costs in that unit. Even though we do not have the same competitive and economic issues at VIS, we believe it is fair and right to offer employees the same opportunity that is being offered to employees elsewhere in Verizon. For us, this isn't about cost cutting or headcount reductions - it's about treating employees equitably and with respect.

3. Is VIS trying to eliminate a specific number of jobs?

No, because that's not why VIS is offering this option. Instead VIS wants to be fair to our employees by giving them the same opportunities other Verizon employees receive.

In the same "Questions and Answers" section Verizon addressed whether the employees could receive unemployment compensation. The answer given to this question was less than clear. The document merely indicated that the decision to award unemployment benefits was made by state agencies; it also noted that "[m]ost states disqualify applicants who leave employment voluntarily" and it advised the employees to contact their local unemployment agency.

Employees accepting the MVSP signed a separation agreement and release, acknowledging that they were voluntarily leaving and receiving separation benefits, and that they were not relying on any representations, other than those contained in the agreement. One hundred and three VIS employees accepted the MVSP and voluntarily resigned. They received a cash separation payment, one year of continued medical benefits, outplacement services and a five percent pension enhancement.

IV. October 2003 EISP Offer

On October 8, 2003, Verizon announced the EISP to both IBEW Local 827 and the CWA. Verizon again asserted the existence of a staffing surplus; the EISP was intended to entice the union employees to voluntarily separate from the company. Unlike the letters addressing the 2002 EISP, this letter was silent as to whether Verizon intended to proceed to layoffs if the EISP did not adequately reduce its workforce.

Here, Verizon claims it did not intend to layoff employees if the EISP did not eliminate the surplus. It maintains that the circumstances in 2003 were similar to those in 2002. The company was thus precluded, under the New York arbitrator's determination, from laying-off employees. If Verizon intended to layoff employees, it had to provide thirty days notice under the CWA or the IBEW contract.

On October 9, 2003, Verizon sent a company-wide e-mail to all its Mid-Atlantic*fn2 region employees, including those employed in New Jersey, informing them that there was a staffing surplus of about 2850 employees in the Mid-Atlantic states. In the first paragraph, the e-mail stated that "[t]here will be no layoffs, forced transfers outside of transfer areas, or reductions in an employee's compensation as a result of a downgrade in this surplus declaration."

Unfortunately, this e-mail message was not also sent by ordinary mail to employees who were out sick or on maternity leave. However, a similar bulletin was sent to management on the afternoon of October 8, 2003. The bulletin directed management to share this message with those employees who did not have access to e-mail.

On October 14, 2003, Verizon sent the 2003 EISP offer via regular mail to all eligible employees. Under this offer, an employee was eligible for the EISP if he had one year of credited service. A letter included with the package informed the reader that "[y]our job is in a work group that is subject to a force adjustment." The letter also explained the details of the EISP offer. Another part of the package apprised the reader that "[y]ou will be notified in advance if the Company determines that business needs warrant a reduction in force or reassignment of jobs that results in the elimination or change in your job." Unlike the October 9, 2003 e-mail, this letter was silent as to the possible need for layoffs.

The 2003 EISP offered $2200 per year of credited service for up to thirty years, for a maximum of $66,000; a voluntary termination bonus of $10,000; six months of continued medical coverage; a lump-sum pension cash-out option; and a five percent pension band increase. Participation in the EISP was voluntary.

There was also a "Questions and Answers" section in the package; one of the questions asked "[i]f I volunteer to leave Verizon under an EISP offer, will I be eligible for Unemployment Compensation?" The answer stated: "[y]our eligibility for these benefits is determined according to the various state laws and handled by state agencies, subject to their regulations and interpretations. You should talk with your local unemployment office."

On October 23, 2003, Verizon sent a bulletin extending the acceptance date for the EISP to November 16, 2003. Employees could also revoke their acceptance of the offer up until this date.

On November 3, 2003, the DOL issued a bulletin advising its "adjudication staff" that those Verizon employees who accept the offered EISP plan are eligible for unemployment benefits under N.J.A.C. 12:17-9.6. On December 11, 2003, the DOL sent a second bulletin advising that management employees from Verizon were not eligible for unemployment, because their positions had not been identified as surplus. These advisory bulletins are intended to provide guidance to DOL personnel; they are not determinative or binding as to who may be deemed eligible for benefits.

Verizon received a significant response to the 2003 EISP; in fact, it was forced to deny some employees participation, to avoid a shortage of workers in certain areas; other areas remained in surplus status. More than 3200 Mid-Atlantic employees were accepted for the EISP package, including 1096 in New Jersey. On a company wide basis, the number of EISP volunteers exceeded the surplus; Verizon was therefore able to meet its workforce reduction targets.

On November 20, 2003, after the application period for participation in the EISP program had closed, but before the employees were taken off the payroll, Verizon issued a bulletin to all its employees informing them of the result of the EISP offer. This bulletin contained a similar message as that contained in the October 9, 2003 e-mail: "[i]t should be noted that as part of this surplus declaration the company said there would be no layoffs, forced transfers outside of transfer areas, or reductions in an employee's compensation as a result of a downgrade."*fn3

On November 25, 2003, Verizon sent additional information to its management staff concerning the surplus reduction program. Included in this information was a "Questions and Answers" section to assist management in answering employees' questions. One question and answer provided as follows:

Since surpluses remain, can I be laid off or forced to transfer to another job?

As part of the Oct. 8, 2003 surplus declaration, the company said there would be no layoffs, forced transfers requiring a home relocation, or reductions in an employee's compensation as a result of a downgrade. As units re-assess staffing needs and take steps to adjust to their force, employees may be transferred as permitted under local labor contracts. While local contracts may differ, units in Mid-Atlantic can generally transfer employees to locations within a 35-mile radius of their current location.

V. Application for Unemployment Benefits

Many of the former Verizon employees, who elected to accept the EISP or MVSP, subsequently filed for unemployment compensation benefits. The DOL determined that some of these applicants were disqualified from receiving benefits, since they "voluntarily left work without good cause attributable to such work" and it found other applicants were eligible for unemployment compensation under N.J.S.A. 12:17-9.6.

These initial determinations were then appealed by either the employee or Verizon to an Appeal Tribunal, the intermediate level of adjudication for all unemployment benefit claims. In early 2004, the DOL consolidated all of the unemployment claims then pending in connection with Verizon's 2003 MVSP and EISP, into one mass appeal; this consolidated appeal was presented for adjudication in the context of a single de novo hearing. All related cases, even ones that had already been adjudicated, were remanded to the Appeal Tribunal; any previous record was not considered.

All claimants who had filed for unemployment benefits in connection with Verizon's 2003 MVSP and EISP received notice of the hearing dates by mail. The de novo hearing was held over five days; April 12, 2004, April 13, 2004, July 29, 2004, July 30, 2004, and August 17, 2004. The union employees claimed that they were entitled to unemployment compensation under N.J.A.C. 12:17-9.6. Verizon argued that: (1) N.J.A.C. 12:17-9.6 conflicts with N.J.S.A. 43:21-5, as defined by the Supreme Court; (2) the claimants were disqualified from receiving benefits under N.J.S.A. 43:21-5; and (3) its due process rights were violated by DOL bulletins directing deputies to award benefits to employees prior to any hearing. A total of fourteen former Verizon employees testified during the five day hearing.

Some of the employees who testified indicated that they feared losing their jobs if an inadequate number of employees voluntarily left work, just as had occurred in 2002. Others testified that, although they did not suspect their jobs were in jeopardy, they left to save other persons' jobs or to take advantage of the pension benefits and other financial incentives the package offered. Fear of relocation was another relevant consideration in accepting the EISP or MVSP.

All of the employees who testified stated that they had never read or heard about the October 9, 2003 e-mail, which stated that there would be no layoffs. A limited number of employees testified that Verizon routinely sent numerous e-mails, as many as one hundred per week; based on this volume, they did not have the time to read them all. Several employees also complained about the lack of information available, since the telephone numbers Verizon provided for obtaining information about the EISP, were often busy, and employees were put on hold for an hour or more at a time.

It is noteworthy that none of the former employees who testified received any formal notice from Verizon that they personally would be involuntarily terminated in the future. Rather, their fears of involuntary termination were often based on rumors and assumptions.

VI. Decision of the Appeal Tribunal

On July 28, 2005, the Appeal Tribunal issued a decision holding that the claimants were disqualified from receiving benefits under N.J.S.A. 43:21-5(a) because they left work voluntarily without good cause attributable to work when they accepted the EISP or MVSP packages. The Appeal Tribunal stated:

From N.J.A.C. 12:15-1.1(c) it is clear that the Administrative Code is a guide to help in interpreting the statutes. It does not carry the same weight as law. The law, N.J.S.A. 43:21-5(a), is controlling in this matter.

It was argued that the claimants faced uncertain futures as history had shown that the employer would likely be eliminating jobs. However, as stipulated by both collective bargaining agreements (CBAs), there could be no lay offs unless or until the "external event" clause of the contracts had been met. Since no jobs were in jeopardy, the union membership had no objective fear of job loss.

It was further argued that senior employees took the package in effect to allow junior employees to remain employed. However, as no positions were in any danger of elimination, there were no jobs that were "saved" by any acceptance of the EISP.

Lastly, N.J.A.C. 12:17-9.6 requires that a "lay off or early retirement incentive policy or program["] be in "effect during a reduction-in-force" (emphasis added) in order for an individual to avoid disqualification under said regulation. In this case, there was no reduction in force in progress at the time the EISP was offered as the CBAs clearly indicate that the EISP be offered before proceeding to any reduction in force. Thus, all arguments were rejected. . . .

The purpose of the unemployment fund, as set forth in N.J.S.A. 43:21-2, is a means of easing economic hardship, not as a program of entitlement. It is reserved for those workers who unexpectedly find themselves unemployed. Conversely the workers in this case knew that they could accept the EISP or not, at their own discretion and of their own volition. Further they received significant payments for their voluntary participation in the EISP. This is not the sort of worker envisioned by the framers of this statute. . . .

The New Jersey Supreme Court held that ". . . a claimant must show that he or she will suffer a substantial economic loss if he or she does not separate from employment under the early retirement/incentive offer." [Brady v. Board of Review, 152 N.J. 197, 215 (1997)]. In the instant case, the parties accepting the EISP stood to benefit from a financial gain. There was no economic loss looming, as remaining employed would have upheld the status quo. Remaining at the same level as prior to the offered package is not a "loss."

This decision did not address whether the employees who received benefits had to refund any monies. The Tribunal remanded this issue to the Director for "an initial determination in accordance with established procedures."

The Director and several claimants then appealed this decision to the Board of Review.

VII. Decision of the Board of Review

On February 24, 2006, the Board of Review affirmed the decision and reasoning of the Appeal Tribunal. It added

Further in Trupo v. Board of Review, 268 N.J. Super 54, 61 (App. Div. 1993), the court held that a subjective fear of layoff must be supported by "definitive objective facts" to avoid a disqualification under N.J.S.A. 43:21-5(a). In this case, based on the union contract and the employer's electronic correspondence, there were to be no layoffs and, at most, the claimants would be transferred within the union contract limitations or be reassigned with no decrease in pay.

Also in Fernandez v. Board of Review, 304 N.J. Super 603, 607 (App. Div. 1997), the court held that an employee's acceptance of an early retirement incentive package bars him from receiving unemployment benefits unless he shows he accepted the package because of a "real imminent, and substantial risk of losing his job." Again, in this matter, the claimants were members of unions that had, with the employer, a collective bargaining agreement which had a no-layoff clause, effectively barring the employer from laying off its employees.

VIII. Claimants Who Accepted the EISP Package

We will now summarize the particular factual circumstances of each of the claimants before us. Verizon has not contested these specific allegations. It argues that, as a matter of law, petitioners are not entitled to compensation.

THOMAS A. GOURLEY

On December 3, 1969, Thomas A. Gourley began working for Verizon as an installer; he became a splicer in 1989. He was a member of IBEW Local 827. When Verizon offered him the EISP in 2003, he accepted it with the desire and expectation that by doing so, he could prevent his fellow employees from losing their jobs, as they nearly had in 2002. He was also influenced by the favorable pension benefits he would receive if he accepted the EISP. On November 30, 2003, Gourley applied for unemployment benefits and was initially found eligible for benefits on December 17, 2003. On appeal, the Appeal Tribunal reversed finding that Gourley had voluntarily left his employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

SHIRLEY BELLINGER

Shirley Bellinger was a member of IBEW Local 827. She began working for Verizon on December 20, 1971; she has held several different positions with the company. She accepted the EISP severance package because she believed that she would be involuntarily terminated or transferred to another location. Bellinger applied for unemployment benefits on November 30, 2003 and began collecting them a few weeks later. On appeal, the Appeal Tribunal reversed the award of benefits, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

ROBERT D. HIGHET

Robert D. Highet was a member of IBEW Local 827 and worked for Verizon as a facilities technician for over thirty years, from February 11, 1973 until November 22, 2003. He received the EISP package; he did not receive any e-mail correspondence or other information about the offer. As an outside technician, Highet did not have computer access. From his reading of the EISP, he feared that his or his co-workers' jobs were in jeopardy. Highet applied for unemployment benefits on November 30, 2003 and was found eligible for benefits February 6, 2004. On appeal, the Appeal Tribunal reversed, finding that he had voluntarily left his employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

TARA Y. JOHNSON

Tara Y. Johnson was a member of the CWA; she worked for Verizon as a customer sales and service consultant from January 17, 2000 to November 22, 2003. She suffered from job related stress, anxiety and depression, which eventually led her to take disability leave, from November 26, 2002 to October 20, 2003. When she returned to work, she decided to accept the EISP, because her illnesses made the work environment "not conducive to her health." She applied for unemployment benefits on November 23, 2003, and was initially found eligible for benefits. On appeal, the Appeal Tribunal reversed her award of benefits, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.*fn4

DIANNA SMITH

Dianna Smith was a member of IBEW Local 827; she worked for Verizon from October 6, 1997 to November 22, 2003 as a business customer service representative, a repair service clerk, and a dispatcher for special services system technicians. On June 19, 2003, Smith's mother, who lived in Washington, suffered a massive stroke. Smith took a leave of absence near the end of July and she returned to work in September. She was considering moving back to Washington, when the company offered the EISP.

Smith applied for the EISP, but left work on November 18, 2003 to return to Washington, without knowing if she had been accepted. Two days later, on November 20, 2003, she was notified by her supervisor that she was accepted for the EISP. In contrast to the facts alleged by the majority of the claimants here, Smith claims she left work, not because she feared termination, but because she needed to care for her ill mother. She applied for unemployment benefits in December 2003 and was initially found eligible, commencing January 2004. On appeal, the Appeal Tribunal reversed her award of benefits, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.*fn5

THOMAS FAGAN

Thomas Fagan worked for Verizon as a facilities technician for thirty-six years and was a member of IBEW Local 827. As an outside technician, he did not have access to company-sponsored e-mail and computer services, nor did he receive any verbal notifications about the October 9, 2003 e-mail. Fagan accepted the EISP offer in part to help achieve the necessary force reduction and allow others to continue working. He applied for unemployment benefits on December 7, 2003, and was approved to receive unemployment benefits on January 3, 2004 and January 22, 2004. On appeal, the Appeal Tribunal reversed, finding that he had voluntarily left his employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

MARIA VASQUEZ

Maria Vasquez testified at the hearing held by the Appeal Tribunal. She was a member of IBEW Local 827, and worked for Verizon for twenty-five years, most recently as a network technician. She testified that there was not enough work for all the employees in her group, but that her boss advised her that with twenty-five years of seniority her job would be safe. She nonetheless claimed that her job was in jeopardy, based on Verizon's past practices of laying off employees when a buyout did not adequately reduce its workforce.

In her brief before us, she asserted that anyone who retired between January 1, 2004 and October 31, 2004 was not eligible for a lump sum cash payment of their pension. The lump sum option would not be available again, until November 1, 2004. Thus, if she was laid off or forced into retirement in 2004, she would have to accept an annuity. She accepted the EISP for fear of being laid off and thereby suffering an economic loss. On November 30, 2003, Vasquez applied for and was determined to be eligible for unemployment benefits. On appeal, the Appeal Tribunal reversed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

JENNIFER ESPOSITO

Jennifer Esposito was a member of CWA and she worked for Verizon as a consultant from July 17, 2000 to November 21, 2003. She went out on disability leave on May 21, 2003 because of complications with her pregnancy and subsequently began her maternity leave on June 26, 2003. Since Esposito was not at work, she did not receive the October 9, 2003 e-mail advising that layoffs would not follow the EISP. Upon reading the EISP package, she became worried because the package declared there was a surplus of consultants.

Esposito knew she was "in the bottom three in seniority for her office." She attempted to contact Human Resources at least seven times, through the telephone number provided in the EISP package; but, she was put on hold for long periods of time. The one time she was able to speak with someone, her call was passed from one department to another without results. Although she was entitled to remain on maternity leave through June 2004, she accepted the EISP offer and severed her ties with Verizon on November 21, 2003.

On November 23, 2003, she applied for unemployment benefits and was advised on January 12, 2004 that she was eligible for benefits. On appeal, the Appeal Tribunal reversed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

NEIL R. SMITH

Neil R. Smith was a member of IBEW Local 827; he worked for Verizon from February 11, 1972 to November 2003 in various positions. Smith started his tenure with the company as a member of IBEW Local 827. He forfeited his union status when he was promoted to a management position on January 5, 1997. In July 1999, he gave up his supervisory role to avoid losing any pension benefits. When he returned to the union, he no longer had his twenty-five years of seniority. During the 2002 layoffs, a union representative told him he was on the list of employees to be laid off. This caused him great stress; after consulting with a mental health professional, he was placed on disability. After receiving medication and counseling, he returned to work in September 2003. On October 14, 2003, he received the EISP offer; fearing that he once again might be laid off, he accepted the offer. Smith applied for unemployment benefits on December 7, 2003 and was awarded benefits on December 15, 2003. On appeal, the Appeal Tribunal reversed, finding that he had voluntarily left his employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

HOPE CALDERON

Hope Calderon was a member of the CWA and worked for Verizon as a repair service clerk dispatcher from April 1994 until November 21, 2003. She received the EISP and elected to take the offer, since she feared a layoff might follow if an inadequate number of persons did not accept the severance package. Calderon applied for unemployment benefits on November 23, 2003 and was initially found eligible for benefits on January 22, 2004. On appeal, the Appeal Tribunal reversed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

JOHN SIMOSKEVITZ

John Simoskevitz was a member of IBEW Local 827 and he worked for Verizon as a lineman for thirty-eight years. He asserts that his decision to accept the EISP offer was motivated by his desire to save other linemen's jobs. He was also influenced by the favorable pension benefits he would receive, if he accepted the EISP. As a lineman, he did not have direct access to company-sponsored e-mail and computer services. Simoskevitz applied for unemployment benefits on January 4, 2004 and was initially awarded benefits on February 2, 2004. On appeal, the Appeal Tribunal reversed finding that Simoskevitz had voluntarily left his employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

EMMA L. GOTHIE

Emma L. Gothie was a member of the CWA; she worked for Verizon as an operator from November 1973 until November 2003. She claims she was suspended for five days by her supervisors for her work performance and was told by both her supervisors and her union that if she returned to work she would be fired. Therefore, she felt compelled to take the EISP package. Gothie applied for unemployment benefits on November 23, 2003; she was found eligible on January 1, 2005. On appeal, the Appeal Tribunal reversed her award of benefits, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.*fn6

PATRICIA HAMILTON

Patricia Hamilton was a member of the CWA; she worked for Verizon as a directory assistance operator for fourteen years. At the time she received the severance package, she was sixty-two years old with no other source of income, savings or retirement plan. She believed her job was in jeopardy due to downsizing by Verizon and comments made to her by her supervisors. She maintains that Verizon made it clear that directory assistance calls would be transferred out of state to non-union operators, who were paid much less.

According to Hamilton, a Verizon manager told her that: "just because you are a nice person doesn't mean we can keep you." Another told her in reference to a buyout offer, (it is unclear if it was in reference to the 2003 offer), that she should take the package because it would be better "than having nothing."

At employee group meetings, she was advised that directory assistance would soon be completely automated. At the time the offer was made, she learned that the Morristown office was closing in January 2004 and that additional offices would be closing or reducing their hours. She also claims she has seen numerous other employees be fired for arbitrary reasons. She thus believed that her job was in jeopardy, and that she had no other choice but to accept the EISP buyout.

After accepting the buyout, Hamilton applied for and was awarded unemployment benefits. She did not testify at the hearing because she did not have transportation. On appeal, the Appeal Tribunal reversed her award of benefits, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

ANNIE D. LYTCH

Annie D. Lytch was a member of the CWA and she worked for Verizon from January 23, 1989 until November 2003 as an operator, and thereafter she worked in the department of directory assistance. In May 2003, Verizon announced the introduction of a self-serve directory assistance program. According to Lytch, no one told her that she would be transferred to another position when directory assistance became automated. She therefore suspected she would be laid off. Such a prospect, combined with Verizon's alleged harassment,*fn7 made her decide to take the EISP.

Lytch applied for unemployment benefits on November 23, 2003 and was found eligible for benefits on December 19, 2003. On appeal, the Appeal Tribunal reversed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

BARRY W. MACKAY

Barry W. MacKay was a member of IBEW and he worked for Verizon as a lineman for thirty-one years. He left his job because he wanted to secure his younger colleague's positions; he expressly wanted to avoid a reoccurrence of the layoffs of 2002. It was also possible that his pension would decrease if he chose to stay. MacKay applied for unemployment benefits on January 25, 2004 and was initially found eligible to receive benefits. On appeal, the Appeal Tribunal reversed, finding that he had voluntarily left his employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

DEBORAH R. THOMAS

Deborah R. Thomas was a member of IBEW Local 827; she worked for Verizon for thirty-two and a half years. She accepted the EISP believing that if the staffing surplus was not relieved, layoffs would be imminent and her pension would decrease, if she chose to stay. Thomas applied for unemployment benefits in November 2003 and began collecting benefits in December 2004. On appeal, the Appeal Tribunal reversed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

BETTYLYNN PELLETT

Bettylynn Pellett worked as a clerk in various positions and locations for Verizon and was a member of IBEW Local 827. She accepted the EISP buyout because she expected Verizon would proceed to involuntary layoffs if an insufficient number of workers did not volunteer. Pellett applied for unemployment benefits on November 23, 2003 and was originally found ineligible. Upon further review, she was found eligible for benefits. On appeal, the Appeal Tribunal reversed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

IX. VIS Employees Who Accepted MVSP Package

DEBRA ESOLA

Debra Esola was among the petitioners who testified at the hearing on July 29, 2004. Esola was a member of the CWA and was employed in a clerical capacity by VIS for twenty-three years. At one point, her department had between twenty-five to thirty employees; during the past three years, Verizon drastically reduced the staff in the department, leaving only petitioner and one other employee.

Esola testified that she only performed about three hours of work during the average workday. The bulk of the clerical work she used to perform was now being done in the State of Florida. According to Esola, her decision to accept the benefits package was directly influenced by the "reduction in force" language contained in the letter. She also testified that her manager told her: "[i]f I were you, I would take it." In her mind, these words only served to fuel the many rumors about the office shutting down. Esola also tried unsuccessfully to transfer to Florida.

Because she had only three years until she would receive lifetime benefits, she argued that it would not have made economic sense for her to accept the severance package unless she was convinced that her job was in jeopardy. Finally, she argued it was inappropriate to treat all union employees similarly, because, unlike the other union employees, VIS employees did not have layoff protection in their contracts.

She applied for, and was denied unemployment benefits on November 23, 2003. On appeal, the Appeal Tribunal affirmed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

STEPHANIE KUCHARSKI

Stephanie Kucharski was a member of the CWA and employed by VIS as an in-house telephone sale representative and as an outside accounts receivable representative for about three years. She argues that she accepted the severance package, at least in part, because she was told that she would be entitled to benefits by a representative of the Division of Unemployment Compensation. Kucharski applied for, and was denied unemployment benefits on January 13, 2004. On appeal, the Appeal Tribunal affirmed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

LINDA PALUMBO

Linda Palumbo was a member of the CWA and employed by VIS as an in-house telephone sales representative for about three years. She accepted the MVSP buyout, and thereafter was denied unemployment benefits. She raises the same arguments concerning the contractual status of VIS employees, and she alleges that a representative of the Division of Unemployment Compensation told her that she would be entitled to benefits. She applied for, and was denied unemployment benefits on December 26, 2003. On appeal, the Appeal Tribunal affirmed, finding that she had voluntarily left her employment without good cause attributable to such work; the Board of Review affirmed the decision of the Appeal Tribunal.

X. Legal Analysis

The central issue to be decided is whether the claimants are entitled to receive unemployment compensation benefits. New Jersey's Unemployment Compensation Law (the Act), N.J.S.A. 43:21-1 to -56, "is social legislation that provides financial assistance to eligible workers suffering the distress and dislocation caused by unemployment." Utley v. Bd. of Review, Dep't of Labor, __ N.J. __ (2008) (slip op. at 12) (citing Provident Inst. for Sav. v. Div. of Employment Sec., 32 N.J. 585, 590 (1960)). "[T]he purpose of the [Act] is to provide some income for the worker earning nothing, because he is out of work through no fault or act of his own . . . ." Id. at 13 (citing Battaglia v. Bd. of Review, 14 N.J. Super. 24, 27 (App. Div. 1951)).

The Act's protection extends not only to employees who are involuntarily terminated, but also to employees who "voluntarily quit their jobs for good cause attributable to their work." Id. at 13-14 (citing Zubrycky v. ASA Apple, Inc., 381 N.J. Super. 162, 168 (App. Div. 2005)). However, N.J.S.A. 43:21-5(a) disqualifies an individual from the receipt of unemployment compensation benefits "[f]or the week in which the individual has left work voluntarily without good cause attributable to such work and for each week thereafter until the individual becomes reemployed." Id. at 14. Therefore, "benefits are available to a worker who voluntarily leaves his job only if it is for 'good cause attributable to [the] work.'" Id. at 14-15 (quoting N.J.S.A. 43:21-5(a)). If an employee leaves his job for personal reasons then he is disqualified under the statute. Id. at 15.

In Brady v. Board of Review, the Supreme Court established that if employees volunteer to accept an early retirement incentive package, they are disqualified from receiving unemployment benefits under N.J.S.A. 43:21-5(a), unless they "establish by 'definite objective facts,' (1) a well-grounded fear of 'imminent layoff' and (2) that they 'would suffer a substantial [economic] loss by not accepting early retirement.'" 152 N.J. 197, 222 (1997). The claimant bears the burden of proof to establish he has the right to collect benefits. Id. at 218 (citing Zielenski v. Bd. of Review, 85 N.J. Super 46, 51 (App. Div. 1964)).

Furthermore, N.J.A.C. 12:17-9.5 provides that:

If an individual leaves work after he or she is notified by the employer of an impending layoff or discharge, he or she shall be subject to disqualification for benefits unless the individual will be separated within 60 days. For purposes of this section, imminent layoff or discharge is one in which the individual will be separated within 60 days. [(Emphasis added).]

Employees are also not eligible to receive benefits if they participate in a "written voluntary layoff and/or early retirement incentive policy" in an effort to protect the jobs of co-workers who may be facing termination. In re N.J.A.C. 12:17-9.6 ex. rel. State Dep't of Labor, 395 N.J. Super. 394, 407-08 (App. Div. 2007) (quoting N.J.A.C. 12:17-9.6(a)). This is so, because this class of claimants is not in imminent fear of involuntary termination, and would not suffer a "substantial economic loss" if they did not accept the employer's incentive package. Id. at 410-11.

Here, claimants cannot prove they had a well-grounded fear of imminent layoff. In this light, we need not reach the second prong of the analysis involving "substantial economic loss." The Board of Review thus correctly denied these claims.

In Trupo v. Board of Review, we addressed for the first time whether an employee, who accepts an early retirement package, is disqualified from receiving benefits under N.J.S.A. 43:21-5(a). 268 N.J. Super. 54, 61 (App. Div. 1993). Trupo was a sixty-one-year-old woman who accepted an early retirement package offered by her employer. Ibid. We found Trupo had not presented "definitive objective facts" to support her subjective fear of impending job loss. Id. at 61. We declined to remand the case for amplification of the record, because, even if successful, her retirement and pension benefits precluded her from collecting any unemployment compensation. Id. at 62-63.

We addressed this issue again in Fernandez v. Board of Review and held that Fernandez was ineligible for unemployment benefits. 304 N.J. Super. 603, 608 (App. Div. 1997). Fernandez worked for AT&T for twelve years. While AT&T was restructuring, Fernandez received a letter, sent to all employees in the consumer products division, which stated there were "many more people in [his division] than there [would] be following" the reorganization. Id. at 605. The letter further advised that employees could "volunteer to terminate" their employment. Ibid.

Before receiving this letter, Fernandez had also read an article in the Wall Street Journal, which he felt indicated that AT&T was in "dire financial straights." Ibid. Additionally, according to Fernandez, he did not "enjoy a good working relationship with his immediate supervisors." Ibid. Aside from the general notice sent to numerous employees, Fernandez was never directly informed that his job was at risk. Ibid. In this context, the court held that Fernandez did not show that he had "accepted the package because of a real, imminent, and substantial risk of losing his job." Id. at 607.

Our Supreme Court addressed this issue for the first time in Brady. The court cited Trupo and Fernandez approvingly and held that the GM claimants, who elected to participate in an early retirement program, were disqualified from receiving unemployment benefits since they failed to "establish by 'definite objective facts,' (1) a well-grounded fear of 'imminent layoff' and (2) that they 'would suffer a substantial [economic] loss by not accepting early retirement.'" Brady, supra, 152 N.J. at 215-16, 222.

The claimants, who worked in a Trenton GM factory, accepted early retirement plans, after GM announced on December 3, 1992 that GM intended to close the factory by the end of 1993. Id. at 203-04. The Court found there was not a fear of imminent layoff since the notices did not "specifically target particular employees" and they did not establish a definite closing date. Id. at 218-19.

As noted by the Court, closing the plant was an "extensive complicated process that could not take place quickly." Id. at 219. Additionally, all of the claimants had significant seniority, which permitted them to continue to work at the plant for an additional substantial amount of time and potentially transfer to another plant. Ibid. Under these circumstances, the Court held that "[w]hile claimants may have had a subjective fear of layoff, such fear was not 'based upon definitive objective facts.'" Ibid. (citing Trupo, supra, 268 N.J. Super. at 61).

Our capacity to review decisions of an administrative agency is limited. Shuster v. Bd. of Review, 396 N.J. Super. 240, 245 (App. Div. 2007) (citing State-Operated Sch. Dist. of City of Newark v. Gaines, 309 N.J. Super. 327, 331 (App. Div.), certif. denied, 156 N.J. 381 (1998)). As long as "substantial credible evidence supports an agency's conclusion, a court may not substitute its own judgment for the agency's even though the court might have reached a different result." Brady, supra, 152 N.J. at 210 (citing Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). The agency's determination should only be reversed if it is "arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record as a whole." Shuster, supra, 396 N.J. Super. at 246 (citing Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980); Marro v. Dep't of Civil Serv., 57 N.J. Super. 335, 346 (App. Div. 1959)).

An important factor in the courts' determinations in Brady and Fernandez was that the claimants did not personally receive notice that they would be terminated in the future. Brady, supra, 152 N.J. at 218-19; Fernandez, supra, 304 N.J. Super. at 608. Here too, the employees did not claim they personally received formal notice from Verizon that they would be involuntarily terminated in the future. Verizon did not "specifically target particular employees." See Brady, supra, 152 N.J. at 218.

Instead, similar to Fernandez, who received a letter stating that AT&T would be restructuring and that there were "many more people in [his division] than there [would] be following" the reorganization, the claimants received a generic letter, which went to thousands of other employees stating that "[y]our job is in a work group that is subject to a force adjustment" and explained the details of the EISP offer. See Fernandez, supra, 304 N.J. Super. at 605. This letter created rumors and suspicions that there might be layoffs, as there had been in 2002. However, "[m]ere speculation about job stability is insufficient to establish good cause." Id. at 606.

There is nothing in the record before us that indicates that Verizon actually or constructively provided these claimants with a rational basis to conclude that they would be terminated within sixty days of receiving the EISP. See N.J.A.C. 12:17-9.5. Stated differently, petitioners have not met their burden of showing that they are legally entitled to receive unemployment benefits. See Brady, supra, 152 N.J. at 222.

"While [the Verizon] claimants may have had a subjective fear of layoff, such fear was not 'based upon definitive objective facts.'" Id. at 219 (citing Trupo, supra, 268 N.J. Super. at 61). Rather, the objective facts demonstrated that the employees' layoffs were improbable. For employees who were members of the IBEW and the CWA, their contract-based layoff protection made involuntarily termination unlikely; these employees could only be terminated as a result of an external event that created a staffing surplus. As to VIS employees,*fn8 although they did not have layoff protection in their contract, the severance packages offered to them specifically stated that VIS was not trying to eliminate jobs.

In short, all of the named claimants in this case are unable to satisfy the standard articulated by the Supreme Court in Brady.

Affirmed.


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