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Sweatte v. Board of Review


April 27, 2010


On appeal from the Board of Review, Department of Labor, Docket No. 176,706.

Per curiam.


Submitted March 2, 2010

Before Judges Wefing and Messano.

Kenneth E. Sweatte appeals from the decision of the Board of Review (the Board) that reduced the weekly benefit rate and maximum benefit of his claim for unemployment compensation. We have considered the arguments appellant raises in light of the record and applicable legal standards. We affirm the Board's decision.

The facts are undisputed. Appellant was employed at various times between 2004 and 2006 by Randstadt North America (Randstadt), respondent Lockheed Martin Operation Support, Inc. (Lockheed), and Environgenics Health & Safety (EHS). Appellant filed a claim for unemployment benefits, effective December 10, 2006. The initial base year upon which benefits were calculated, i.e., July 1, 2005 through June 30, 2006, resulted in appellant receiving a weekly benefit of $521, and a maximum benefit amount of $13,546. He continued to receive weekly benefits through July 14, 2007, when his claim was exhausted.

Appellant's benefits were calculated upon an amount that included $10,860.08 he received from Lockheed during the second quarter of 2006. However, it was later discovered that appellant was not employed by Lockheed at any point during 2005 and 2006. The lump sum payment was an award of back pay from a "settlement," which appellant describes in his brief as resulting from an action brought by the Department of Labor against Lockheed on behalf of all "Environmental Technicians."

As a result, on January 9, 2008, the Director of the Division of Unemployment Insurance (the Director) issued a "Request for Refund of Unemployment Benefits." Based upon the exclusion of the lump sum payment, the Director recalculated the benefits appellant was entitled to receive, reducing the weekly benefit amount to $380, and the total benefit amount to $9880. The Director demanded that appellant refund overpayments in the amount of $4066.

Appellant sought review of this determination and a hearing was held before the Appeal Tribunal. After considering appellant's testimony and reviewing the applicable records, the Appeal Tribunal concluded that appellant had only worked for Randstadt and EHS during the base period, and that his total earnings, excluding the lump sum payment from Lockheed, was $20,809.50. It determined that appellant's weekly benefit amount was therefore $356, that his maximum benefit amount was $9256, and that a refund of $4808 was due. The Appeal Tribunal issued its decision modifying the Director's determination accordingly.

Appellant sought review by the Board. Noting that appellant had a verified dependent, the Board increased appellant's weekly benefit amount to $380, his maximum benefit amount to $9880, and remanded the issue of any "refund" to the Director for further consideration. This appeal followed.*fn1

Appellant argues that in 2006, he was "rehired . . . and issued past earnings" by Lockheed reflected in the lump sum payment he received in the second quarter of that year. Relying upon our decision in Darby v. Bd. of Review, 359 N.J. Super. 479 (App. Div.), cert. denied, 177 N.J. 494 (2003), and various regulations which we discuss below, he contends that the lump sum amount should have been included in his earnings for the base year upon which his benefits were calculated. Thus, he argues, the original benefit amounts he received were correct, and he owes no refund for overpayments.

Our "capacity to review administrative agency decisions is limited." Brady v. Bd. of Review, 152 N.J. 197, 210 (1997) (citation omitted).

[I]n reviewing the factual findings made in an unemployment compensation proceeding, the test is not whether [we] would come to the same conclusion if the original determination was [ours] to make, but rather whether the factfinder could reasonably so conclude upon the proofs. If the Board's factual findings are supported by sufficient credible evidence, [we] are obliged to accept them." [Ibid. (internal quotations and citations omitted)]

Furthermore, the Board's "interpretation of statutes and regulations within its implementing and enforcing responsibility is ordinarily entitled to our deference.'" Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001) (quoting In re Appeal by Progressive Cas. Ins. Co., 307 N.J. Super. 93, 102 (App. Div. 1997)). Only if the Board's action was "arbitrary, capricious, or unreasonable . . . should [it] be disturbed." Brady, supra, 152 N.J. at 210.

Turning to the issues presented in this case, pursuant to N.J.S.A. 43:21-3(d)(1)(B)(i), appellant's "[m]aximum total benefits . . . equal . . . the number of . . . base weeks [he worked] with all employers in the base year multiplied by [his] weekly benefit rate . . . ." (Emphasis added). It is undisputed that appellant was not employed by Lockheed during the base year upon which his benefits were calculated.

He argues, however, that because the lump sum payment reflected past wages earned while employed by Lockheed, and because the company activated an employee number under which the payment check was issued, Lockheed should be considered as a base year employer. He relies upon certain regulations for support.

N.J.A.C. 12:17-8.7(a) provides that "'severance or separation pay' shall mean any lump sum payment or periodic payment made to an individual by an employer at termination . . . based on past services performed for the employer." Pursuant to N.J.A.C. 12:17-8.7(b), "receipt of severance or separation pay in . . . a lump sum shall not be a bar to eligibility for unemployment benefits." That section also provides, "[h]owever, the payment[] do[es] not extend the individual's employment period and such . . . payment[] may not be used to establish or increase his . . . monetary eligibility for benefits for any claim filed after the period for which [it is] made." Thus, the fact that appellant received a lump sum award of back wages from Lockheed in 2006 did not "extend" his employment period with the company into the base year.

N.J.A.C. 12:17-8.8 provides:

Salary continuation through date of termination

(a) An employer may elect to continue wage or salary payments and forego the services normally performed by the employee through the date of termination provided for by contract or other agreement. A claim filed by an individual receiving such payments shall be invalid and he or she shall be ineligible for benefits through the date of termination of contract or other agreement. However, salary continuation payments may be used to establish a claim for benefits after the period for which the individual has received such payments.

(b) An employee who receives a lump sum payment shall be considered to be employed and ineligible for benefits through the date of termination of contract or other agreement in accordance with (a) above. [Emphasis added.]

Appellant likens the lump sum payment to "salary continuation payments" that should be "used to establish [his] claim" during the base year.

In Darby, supra, by agreement with her employer, the applicant left employment but was carried on "'active payroll status'" for an additional year during which she continued to receive bi-weekly compensation payments and her pension benefits continued to accrue. 359 N.J. Super. at 480-81. While receiving these payments, she applied for unemployment benefits; however, the Board denied her request, concluding that she was receiving "continuation wages" and was thus ineligible pursuant to N.J.A.C. 12:17-8.8(a). Id. at 481-82. On appeal, the claimant argued that the payments were "for past services, not ongoing employment," and under N.J.A.C. 12:17-8.7(b), she was not disqualified. Id. at 482. We affirmed the denial of benefits under these circumstances, concluding

We do not believe that claimant is entitled to unemployment benefits . . . or that the unemployment compensation system was designed to benefit someone who, though formally being paid for work previously performed or for "past services," is continued on "active payroll status" and receives his or her same pay and benefits in order to achieve a vested pension. [Id. at 483.]

We believe that appellant's reliance on Darby is misplaced. It is undisputed that appellant never worked for Lockheed during the base year, having severed his relationship with the company in 2004. The lump sum payment made by Lockheed to appellant in 2006 resulted from a settlement reached with the Department of Labor and represented wages earned in 2004. Factually, the lump sum payment was not "salary continuation benefits" resulting from an "elect[ion] [made by the employer] to continue wage or salary payments and forego the services normally performed by [appellant] . . . ." N.J.A.C. 12:17-8.8(a). Therefore, the payment was properly eliminated from the calculation of any benefits appellant was entitled to receive.*fn2

We find no basis upon which to disturb the Board's factual findings or legal conclusions. The decision it reached was not "arbitrary, capricious, or unreasonable . . . ." Brady, supra, 152 N.J. at 210.


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