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Turner v. Board of Review


June 30, 2009


On appeal from the Board of Review, Department of Labor, Docket No. 187,653.

Per curiam.


Argued June 1, 2009

Before Judges R. B. Coleman and Simonelli.

Claimant Jonathan B. Turner appeals a final administrative decision of the Board Review (Board) dated September 26, 2008, which reversed the Appeal Tribunal's decision that Turner was entitled to receive unemployment benefits. The Board adopted the facts found by the Appeal Tribunal but, applying those facts, it concluded that Turner was disqualified from the benefits he received for the weeks ending February 24, 2007 through March 24, 2007, in the sum of $2,199, as he was discharged from his employment for misconduct within the meaning of N.J.S.A. 43:21-5(b). We affirm.

Turner was employed by Motivated Security Services, Inc. (MSS) as an accounts receivable and billing clerk from March 2002 through February 2007. Contrary to MSS's policies and practices, Turner received payments from clients and misapplied them to their oldest accounts instead of those more current invoices for which the funds were intended. This practice had the effect of falsely portraying MSS's receivable records and inflating the borrowing power of the company. Turner's misapplication of funds was discovered when MSS performed its annual audit. Further investigation revealed that the misapplication of funds attributable to Turner exceeded $135,000. No cash or payments were missing, but had the deliberate, improper practice gone undetected, it would have put the company at risk for substantial losses.

MSS promptly discharged Turner on the grounds that he had falsified company financial records. Turner applied for, and received, unemployment benefits from February 18 through the end of March 2007.

On May 16, 2008, the Director of the New Jersey Department Of Labor and Workforce Development (NJDOL) issued a Notice of Determination informing Turner that he was disqualified for compensation benefits he had received a year earlier because he had been discharged for misconduct connected to the work. N.J.S.A. 43:21-5(b). Turner appealed that determination before the Appeal Tribunal, and following a hearing conducted on June 19, 2008, the Appeals Examiner concluded that Turner was not discharged for misconduct connected with his work, and thus, he was not liable to refund monies he had received as benefits. That conclusion was based upon the Appeals Examiner's interpretation of N.J.S.A. 43:21-5(b), which provides for disqualification "for the week in which the individual has been suspended or discharged for misconduct connected with the work, and for five (5) weeks which immediately follow that week, as determined in each case . . . ." See also N.J.A.C. 12:17-10.1(a) (reiterating the terms of the statute). N.J.A.C. 12:17-10.2(a) defines such misconduct as follows: For an act to constitute misconduct, it must be improper, intentional, connected with one's work, malicious, and within the individual's control, and is either a deliberate violation of the employer's rules or a disregard of standards of behavior which the employer has the right to expect of an employee.

The Appeals Examiner determined that Turner's discharge was based on unsatisfactory work performance under N.J.A.C. 12:17-10.7 which provides: An individual's discharge for failure to meet the employer's standard(s) relating to quantity or quality of work shall not be considered misconduct unless it is established that he or she deliberately performed below the standard(s), in a manner that is consistent with N.J.A.C. 12:17-10.2, and that the standard(s) was reasonable.

In determining the grounds for which Turner was terminated, the Appeals Examiner found that the claimant made a few errors by entering payments under the wrong account number.

This was simple human error and is not considered misconduct. The claimant also would take payments from clients and apply them to the oldest outstanding invoice. Although this may eventually cause a problem, the claimant was working with the clients to straighten the payments out.

The claimant did this because he thought it was beneficial to the company to have less late payments. As such, his actions, although maybe not proper, were not malicious. While the employer was within its right to discharge the claimant, the claimant's actions do not rise to the level of misconduct.

MSS filed an appeal to the Board, and on September 26, 2008, the Board issued its decision reversing the decision of the Appeal Tribunal. As noted, the Board adopted the findings of fact as developed by the Appeal Tribunal, with the supplemental correction that the last day Turner worked was March 16, 2007. However, the Board rejected the contention that Turner's discharge was not based upon work-related misconduct as defined by N.J.A.C. 12:17-10.2(a). The Board reasoned that the claimant intentionally falsified financial records that were critical to the financial stability of the employer's business. Thus, we find that the claimant's actions did constitute misconduct. This conclusion is supported by the Appeal Tribunal's own [o]pinion that the claimant's actions were not proper. Hence the claimant is disqualified for benefits . . . and liable for refund in the sum of $2,199 for benefits received for the weeks ending February 24, 2007 through march 24, 2007.

Our review of a final decision of an administrative agency is limited. In re Taylor, 158 N.J. 644, 656 (1999). The scope of review of an administrative decision "is the same as that [for] an appeal in any non-jury case, i.e. 'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record' considering 'the proofs as a whole,' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965) (quoting State v. Johnson, 42 N.J. 146, 162 (1964)). The reviewing panel will not disturb a Board of Review decision absent a finding that it is "arbitrary, capricious, unduly onerous or otherwise unreasonable." N.J. Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 561 (1978).

The appellate court may not "engage in an independent assessment of the evidence as if it were the court of first instance." Taylor, supra, 158 N.J. at 656 (quoting State v. Locurto, 157 N.J. 463, 471 (1999)). "The choice of accepting or rejecting testimony of witnesses rests with the administrative agency, and where such choice is reasonably made it is conclusive on appeal." In re Application of Howard Savs. Bank, 143 N.J. Super. 1, 9 (App. Div. 1976). It is also well-settled that generally a claimant has the burden of "establishing entitlement to unemployment compensation." Bonilla v. Bd. of Review, Dep't of Labor, 337 N.J. Super. 612, 615 (App. Div. 2001).

This case turns on the definition of misconduct which rises to the level of disqualification under N.J.S.A. 43:21-5(b). Our decisions have long recognized that disqualification due to misconduct will not result from "'mere mistakes, errors in judgment or in the exercise of discretion, or minor but casual or unintentional carelessness or negligence, and similar minor peccadilloes.'" Beaunit Mills, Inc. v. Bd. of Review, 43 N.J. Super. 172, 182 (App. Div. 1956) (quoting Boynton Cab Co. v. Neubeck, 237 Wis. 249, 296 N.W. 636 (1941)). Nor will "mere inefficiency, unsatisfactory conduct, failure of performance as the result of inability or incapacity, inadvertence in isolated instances, or good faith errors of judgment" result in disqualification. Ibid.

Rather, our jurisprudence mandates that misconduct which warrants temporary disqualification from receiving unemployment compensation benefits must be demonstrably more than inadequate job performance resulting in discharge. Parks v. Bd. of Review, 405 N.J. Super. 252, 254 (App. Div. 2009).

Misconduct within the meaning of [N.J.S.A. 43:21-5(b)] . . . must be an act of 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. [Ibid. (quoting Beaunit Mills, supra, 43 N.J. Super. at 183).]

Therefore, misconduct of the type which may provide good cause for discharge of an employee, must also have "the ingredients of willfulness, deliberateness and intention" to fall within the meaning of misconduct under N.J.S.A. 43:21-5(b) and bar that employee from unemployment benefits. Parks, supra, 405 N.J. Super. at 254 (quoting Demech v. Bd. of Review, 167 N.J. Super. 35, 38 (App. Div. 1979)).

Here, it is undisputed that Turner intentionally falsified MSS's financial records and placed the company in peril as a result of his misconduct. Turner misapplied approximately $135,000 in MSS's accounts receivable records. Regardless of Turner's motivation for this conduct, his knowing acts constituted a willful, deliberate and intentional deviation from the work practices expected of him. This knowing deviation was substantial and provided MSS with good cause to discharge Turner. The Board concluded that such deviation also rose to the level of misconduct embodied in N.J.S.A. 43:21-5(b).

After a careful review of the record, we are satisfied that the Board's determination is adequately supported. Given our limited scope of review of administrative determinations, and our deference to the Board's recognized expertise in unemployment statutes, we see no reason to disturb the Board's final decision.



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