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Harris v. Board of Review


September 9, 2009


On appeal from a Final Decision of the Board of Review, Department of Labor, Docket No. 40,900.

Per curiam.


Submitted September 2, 2009

Before Judges Payne and Waugh.

Claimant, John L. Harris, appeals from the final decision of the Board of Review denying his claim for unemployment insurance benefits on the ground that he left work voluntarily without good cause attributable to the work. N.J.S.A. 43:21-5(a). On appeal, Harris argues:

Claimant's leaving his job with employer due to employer changing job responsibilities, from a %50 %50 balance of account management work (non-commissionable) and new business development work (commissionable) to exclusively account management work, resulting in greatly reduced income which constitutes good cause attributable to work and, therefore, he should not have been disqualified for benefits.

We affirm.

Harris was hired as Vice President, Director of Client Services by the EFK Group, an advertising agency, on July 18, 2003. The company's job offer provided the following terms:

Base Salary $50,000 per year 2 weeks vacation Health benefits (single coverage) 15 % commission on all new business brought in by you (on net - determined by a formula developed by EFK and approved by you) 50% of the job client management and EFK business 50% New Business Harris was assured by the company's president, Eleanor Kubacki, that the person who had previously held Harris's job had earned $120,000 per year.

At the time that he was hired, Harris was assigned three accounts to manage, and was later assigned two additional accounts. Harris testified that he was entitled to commissions on all accounts because he had increased the billings on the original accounts and had assisted in securing the new business. However, other evidence demonstrated that the largest of the accounts had been lost and Kubacki, not Harris, had initially brought in the two new clients. At the time of the hearings in the matter, Harris was unable to quantify the amount of commissions that he alleged he was owed.

Harris claimed additionally that, because of the amount of time required to service the accounts assigned to him, he was unable to attract new business. Harris did not address the additional time available to him as the result of the loss of his largest account. In an attempt to renegotiate his salary, Harris utilized to establish that the median salary for a senior account executive in his field was approximately $100,000 and that the seventy-fifth percent quartile earned approximately $134,000. Harris showed this evidence to Kubacki on February 16, 2004, but she replied that his pay would be increased only if he attracted new business. Kubacki testified that Harris never attempted to secure such business and expressed no interest in doing so.

Harris also testified that, without his knowledge, Kubacki had been advertising for and interviewing candidates for the positions of senior account executive and new business development. Kubacki admitted that fact, stating that she sought a person to assist Harris in his account management duties, and that it was her prerogative to do the interviewing. She testified further that she had no intention of replacing Harris.

Harris resigned from his position on May 10, 2004, approximately ten months after he had been hired. In his letter of resignation, Harris complained that he had been hired primarily to develop new business, and that a substantial portion of his income was to have been generated in this fashion, but that his job responsibilities had been unilaterally changed to eliminate new business development and to focus entirely on account management, thereby reducing his earning capacity. Harris stated additionally that it was evident that Kubacki planned to replace him, because she had been surreptitiously running advertisements and interviewing for the positions of senior account executive and new business development without involving him in either. He stated: "The account executive was to have reported to me. You never even discussed with me your intentions of hiring a new business development individual despite your repeated insistence that I was management." As a final matter, Harris stated that Kubacki had failed to discuss his responsibilities and compensation with him, despite his requests that she do so, whereas she had reviewed all other employees of the firm.

Following Harris's resignation, he applied for unemployment insurance benefits and was found disqualified on the ground that he had left work voluntarily without good cause attributable to the work. Following an appeal to the Appeal Tribunal, telephonic hearings were conducted on November 22. 2004 and January 5, 2005 in which both Harris and Kubacki participated. By decision dated January 6, 2005, Harris was again found disqualified from receipt of benefits. The Appeals Examiner found:

The claimant worked for [EFK Group, LLC] as a Vice President of Client Services earning $50,000 yearly working a 40 plus hour work week, from 8/2003 through 5/10/2004, when he resigned from the position because he thought he was going to be discharged. The claimant submitted a letter of resignation effective 5/10/04.

The employer has indicated that continuing work was available at the time he resigned and never informed him he was to be dismissed.

After the affirmance of the Appeals Examiner's decision by the Board of Review, Harris appealed to us. In an unpublished opinion, we held that Harris had offered two bases beyond those considered by the agency to establish that he was constructively discharged and, therefore, did not leave the job without good cause attributable to the work. We therefore remanded the matter for further consideration of the grounds that Harris had alleged for his constructive discharge. Harris v. Bd. of Review, No. A-5133-04T5 (App. Div. August 22, 2006).

Following our remand, in a decision by the Board of Review dated October 11, 2006, the Board set aside its prior affirmance and remanded the matter to the Appeal Tribunal for a new decision. Entry of another decision determining that Harris was disqualified from receipt of benefits followed, along with an affirmance by the Board of Review. The matter was further appealed to us, and while on appeal, the Board of Review moved for a remand, which we granted. Thereafter, on November 18, 2008, an additional hearing took place, in which only Harris participated. On November 19, 2008, the Appeals Examiner issued a new opinion, again denying benefits. In that opinion, the Examiner made the following findings of fact:

The claimant was employed as a vice-president and director of client services for [EFK Group, LLC] from 8/2003 until 5/10-2004 when he left work because he was dissatisfied with his rate of compensation. He was paid a base salary of $50,000.00 per year plus 15% commission of new business he developed.

The claimant was assigned three accounts to manage. He was given two new accounts that he worked with the agency to land. The claimant was never paid any commissions on the new accounts or the increased billings of his existing accounts. He is unable to calculate how much commission he is owed even though he managed the accounts.

The claimant contends that the employer ignored the contract agreement and failed to pay him commissions. He was aware that they were not going to pay the commissions three months prior to his resignation and continued to try to resolve the issue with the employer. The employer felt that he had not developed any new business that warranted commission.

The claimant did not leave the job because he feared he was to be discharged. His reason for leaving was because he was dissatisfied with his rate of compensation for his responsibilities.

In determining that Harris did not qualify for benefits, the Examiner stated:

The claimant's contention that the employer violated the contract of hire is rejected. The claimant was paid his base salary and does not know how much commission, if any, he is owed. He was paid the base salary for management of the accounts and worked for nine months under these conditions.

The claimant's leaving of the work because he was dissatisfied with his rate of compensation is not considered a cause sufficient enough to justify one leaving the ranks of the employed to join the ranks of the unemployed in view of his span of employment.

The decision of the Appeals Tribunal was again affirmed by the Board of Review.

In his appeals to the Appeal Tribunal and Board of Review, Harris had the burden of proving that he left work for good cause attributable to the work. Brady v. Bd. of Review, 152 N.J. 197, 218 (1997). The Appeal Tribunals and Board of Review determined that the burden was unmet. When reviewing those determinations, we must give deference to the factual findings of the administrative agency. Doering v. Bd. of Review, 203 N.J. Super. 241, 245 (App. Div. 1985). Further, we may reverse the administrative decision only if we find it to have been "arbitrary, capricious or unreasonable" or "not supported by substantial credible evidence in the record." Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980). "The test of our judicial review is 'not whether we would come to the same conclusion if the original determination was ours to make, but rather whether the fact-finder could reasonably so conclude upon the proofs.'" Zielenski v. Bd. of Review, 85 N.J. Super. 46, 54 (App. Div. 1964) (quoting Morgan v. Bd. of Review, 77 N.J. Super. 209, 213 (App. Div. 1962)).

In the present case, we find a sufficient legal and factual basis in the record for the administrative determination that Harris was not qualified to receive benefits. Although "good cause" is not statutorily defined, applicable regulations provide that it is "a reason related directly to the individual's employment, which was so compelling as to give the individual no choice but to leave the employment." N.J.A.C. 12:17-9.1(b). Here, it was anticipated that Harris would devote half of his time to servicing clients and half to new business, for which he would receive a fifteen percent commission, thereby supplementing his $50,000 salary. Harris claims that the client management duties assigned to him precluded the business development that he anticipated, in accordance with contract, would occupy fifty percent of his time. However, Kubacki testified that Harris had never attempted to perform business development, and the Appeal Examiner was entitled to credit her testimony.*fn1 Moreover, no explanation exists in the record for why Harris did not utilize the time previously spent managing the business of the client that was lost - a client that was stated to constitute Harris's largest account - on business development, thereby righting the balance of duties set forth in his contract of employment. Accordingly, we find that the evidence supported the conclusion that Harris's resignation was not related directly to the work, but arose from other causes.


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