June 1, 2010
KARYN K. FARRELL, APPELLANT,
BOARD OF REVIEW, DEPARTMENT OF LABOR AND ALLENDALE BOARD OF EDUCATION, RESPONDENTS.
On appeal from a Final Decision of the Board of Review, Docket No. 207,533.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 3, 2010
Before Judges Cuff and Payne.
Claimant, Karyn Farrell, a substitute school teacher, appeals from a final decision of the Board of Review, dated April 17, 2009, reversing a determination of an Appeal Tribunal that she was eligible for unemployment benefits. The Board, applying N.J.S.A. 43:21-4(g)(1), determined that Farrell was ineligible for benefits from June 22, 2008 through September 6, 2008, the school vacation period, because she had reasonable assurance of her reemployment as a substitute teacher for the 2009-2010 school year; it required a refund of benefits received for the weeks ending July 5, 2008 through September 6, 2008 in the amount of $1,870 pursuant to N.J.S.A. 43:21-16(d); and it remanded to the Director the issue of Farrell's liability to refund benefits for the weeks ending June 21, 2008 and June 28, 2008.
The record discloses that Farrell was employed as a substitute school teacher by various municipalities including Ridgewood, Ho-Ho-Kus, and Allendale during the previous two years. On July 1, 2007, Farrell had submitted a claim for unemployment benefits during the summer recess following her school employment by the Ho-Ho-Kus Board of Education. After denial of that claim by a deputy claims examiner, Farrell had appealed to an Appeal Tribunal, which had held Farrell eligible for benefits during the period from July 1, 2007 through September 1, 2007. No further appeal had been taken from that determination.
One year later, on June 29, 2008, Farrell filed a claim for unemployment benefits during the summer recess pursuant to her school employment by the Allendale Board of Education. On October 20, 2008, a deputy claims examiner found Farrell ineligible for benefits from June 29, 2008 through September 6, 2008 on the ground that she was employed by an educational institution and had a reasonable assurance of reemployment in the following school year, and she was thus disqualified for benefits pursuant to N.J.S.A. 43:21-4(g)(1). A request for a refund in the sum of $1,870 was made.
Farrell sought review of the deputy's determination, and on January 23, 2009, a hearing before an Appeal Tribunal took place. At the hearing, Farrell testified that she had a two-year history of employment as a substitute teacher for various school districts, including Allendale, for which she was paid on a per diem basis. She testified further that the school year had concluded on June 20, 2008 and was due to resume on September 2, 2008. On July 11, 2008, Farrell received a letter from the Allendale Board of Education asking her whether she was interested in working as a substitute during the following school year. Farrell answered the letter affirmatively, and on August 19, 2008, she was placed on the substitute teacher list by the Allendale Board of Education.
In a decision mailed on January 23, 2009, the Tribunal reversed the deputy, holding Farrell eligible for benefits from June 29, 2008 through August 16, 2008*fn1 because, during that period, she did not have a reasonable assurance of reemployment with an educational institution. However, the Tribunal found that she was ineligible for benefits from August 24, 2008 through September 6, 2008, pursuant to N.J.S.A. 43:21-4(g)(1), because in this period a reasonable assurance of reemployment existed. The matter of Farrell's liability for a refund was remanded to the Director for a recalculation.
Farrell appealed to the Board of Review on January 30, 2009. In that appeal, she stated:
I am sending you this letter requesting a modification of your "reasonable assurance" ineligibility dates.
The dates of ineligibility should be 8/24/08-9/1/08 (and not through 9/6/08) in that the school year began on 9/2/08 and therefore "reasonable assurance" ineligibility no longer applies after 9/1/08.
The Board of Review responded in a decision mailed on April 17, 2009. In that decision, the Board adopted the facts found by the Appeal Tribunal, but adding that "[o]ver the past two school years the claimant has been employed with the above-employer in the same capacity." The Board concluded:
We are satisfied that the claimant had reasonable assurance for the entire period in dispute. The claimant alleges that reasonable assurance does not exist prior to the Board of Education approving the substitute list because she can not begin working as a substitute teacher until they approve the list. We disagree. The pattern of recall during the previous year shows that the claimant had a reasonable prospect of recall for the following school year. "Reasonable assurance" is not a guarantee of reemployment but exists where there is probable recall by the school.
After finding Farrell ineligible for benefits from June 22, 2008 through September 6, 2008, the Board noted that "[t]he denial is through September 6, 2008 because the application of the statute denies benefits through the end of the calendar week that starts during the period between school terms." Farrell has appealed.
The initial issue raised by this appeal is the proper scope of the Board's review of the Appeal Tribunal's decision. In that regard, Farrell contested only the date that the Tribunal found her ineligibility for benefits terminated; the Board reviewed the Tribunal's entire decision. Whether the Board acted within its authority in doing so is governed by our interpretation of three cases: Charles Headwear, Inc. v. Bd. of Review, 11 N.J. Super. 321 (App. Div. 1951); Van Ouhl v. Bd. of Review, 254 N.J. Super. 147 (App. Div.), certif. denied, 130 N.J. 10 (1992); and Heulitt v. Bd. of Review, 300 N.J. Super. 407 (App. Div. 1997).
In Charles Headwear, claimants Cortez and Ferris applied for unemployment compensation benefits following their discharge from employment on November 17, 1949 as the result of an alleged deliberate work slowdown. A deputy denied benefits for the period from November 17 to December 10, 1949, finding workplace misconduct by the two claimants. While the matters were on appeal before an Appeal Tribunal, a further period of unemployment occurred. The Appeal Tribunal affirmed the denial of benefits to claimants for the initial period, agreeing that they had engaged in misconduct, and found them ineligible for benefits during the latter period because claimants had been engaged, fulltime, in picketing. Cortez gave timely notice of appeal, stating that he was appealing only from that portion of the decision that held him to be ineligible for benefits as the result of picketing. Ferris did not appeal. Nonetheless, the Board, on its own motion, removed to itself Ferris's claim.
Following a hearing that encompassed both periods of unemployment and both claimants, the Board found that claimants had not been guilty of misconduct in connection with their work, and that their discharge was not justified. It further found that, as of February 9, 1950, Cortez was available for employment and, as of February 5, 1950, Ferris was similarly available. Therefore, the claimants were entitled to benefits commencing on those dates for their second period of unemployment. Charles Headwear, supra, 11 N.J. Super. at 326.
The employer appealed, arguing that the Board had no jurisdiction to review the decisions of the Appeal Tribunal, which had become final; the Board could not determine as an initial matter claimants' rights to benefits after February 9, 1950; and claimants' discharge was for misconduct as specified in N.J.S.A. 43:21-5(b). Ibid. We affirmed, determining that the removal from the Appeal Tribunal and final determination of the Ferris claim by the Board was statutorily authorized by N.J.S.A. 43:21-6(e) and that both the appeal of the Cortez claim and removal of the Ferris claim were timely. Id. at 326-28.
With respect to scope of review, we held:
The Board's jurisdiction was complete and it had the power to consider and determine each claim in all its aspects. The Board was authorized to and did take additional evidence. The appellant presented additional evidence relating to the discharge of Cortez and it was afforded a full opportunity to be heard upon the claims. The attempted limitation of the scope of the appeal in the Cortez claim by the statement contained in the notice of appeal in nowise restricted the jurisdiction of the board. The statute does not limit the scope of the review, nor does it expressly or impliedly authorize a partial appeal or the appeal from part of the decision of an appeal tribunal. The appeal removes the claim in its entirety. Any other holding would be inconsistent with the statutory scheme for the disposition of disputed benefit claims. [Id. at 328.]
Forty-one years later, in Von Ouhl, we considered the Board's scope of review in a different factual context. In that case, the claimant had been employed part time as an animal holder for an animal clinic and as a substitute teacher. On July 2, 1990, her job as an animal holder was terminated. The claimant applied for and received unemployment benefits as a result.
On September 11, 1990, a deputy sent the claimant three separate determinations, stating: (1) she was disqualified for benefits commencing July 1, 1990 because she had quit her job as an animal holder voluntarily without good cause attributable to the work; (2) she was ineligible for benefits commencing July 15, 1990 because she was an employee of an educational institution seeking summertime benefits, despite reasonable assurance that she would be performing services for the institution in the following school year; and (3) she was ineligible for benefits from July 29, 1990 to August 4, 1990 because of a failure to report. Von Ouhl, supra, 254 N.J. Super. at 149.
The claimant appealed all three determinations to an Appeal Tribunal, which found that claimant was not disqualified from receiving benefits as the result of the termination of her employment as an animal handler because the termination was not voluntary, but that she had a reasonable assurance of recall in her position as a substitute teacher, and thus was ineligible for benefits from July 15, 1990 through September 1, 1990. Because of the disqualification, the Appeal Tribunal did not consider claimant's failure to report on August 3, 1990. Id. at 150.
The claimant appealed only the Appeal Tribunal's determination that she had a reasonable assurance of reemployment. However, despite the fact that the animal hospital did not appeal from the ruling against it, and the Board did not undertake to review the decision on its own motion within ten days, as statutorily required, the Board reversed the Appeal Tribunal's decision that the claimant was eligible for benefits as the result of the termination of her employment as an animal handler, and it determined that she was liable for a refund of all benefits received. Ibid.
On further appeal to us, we reversed. We noted that the proceedings before the Division of Employment Security had been initiated by a deputy's issuance of three separate determinations: one finding the claimant totally disqualified from receipt of benefits because she had voluntarily quit her job as an animal handler, and the other two finding ineligibility for benefits for more limited periods of time based on circumstances unrelated to her animal handling responsibilities. Thus, we found, "each of the deputy's determinations was based on different operative factors and had different potential consequences." Id. at 152. We then observed:
Therefore, while the Appeal Tribunal elected to address appellant's appeals through a single decision, the three determinations of the Deputy Director retained their separate character through the review proceedings within the Division of Employment Security. Nevertheless, the Board of Review took the position that appellant's appeal from the Appeal Tribunal's decision declaring her ineligible for benefits for a six week period exposed all the Appeal Tribunal's decisions relating to her claim to further review, which resulted in the Board's decision holding appellant disqualified from receiving any benefits. We disagree and therefore reverse. [Ibid.]
We held that nothing in the governing legislation or regulations indicated that an appeal of one part of an Appeal Tribunal's decision automatically subjected every other part to the Board's review, nor was there any warning to the claimant of what the effect of her appeal would be. Id. at 152-53. Thus, we concluded that "the Appeal Tribunal's affirmance of one determination of the Deputy Director did not confer jurisdiction upon the Board to review the Appeal Tribunal's reversal of another determination." Id. at 153.
Further, we distinguished Charles Headwear, observing that because the merits of both determinations in that case were fully litigated in the evidentiary hearing held before the Board, the Board could have considered the claimant's notice of appeal amended accordingly. Ibid. However, we also stated: although we have no quarrel with the result in Charles Headwear, we disagree with the part of the opinion which indicates that an appeal to the Board of Review from any part of an Appeal Tribunal's decision confers jurisdiction upon the Board to review any other part. [Ibid.]
Thereafter, we decided Heulitt. In that case, the claimant had been employed as a multi-dwelling housing inspector by the Department of Community Affairs. However, he resigned shortly after completing his training period as the result of dissatisfaction with a policy that he utilize a State car, a desire to work hours other than those assigned, and a dispute over overtime pay. A deputy denied benefits, finding that the claimant had resigned voluntarily without good cause attributable to the work, and was therefore precluded from receipt of benefits by N.J.S.A. 43:21-5(a). Heulitt, supra, 300 N.J. Super. at 411. On appeal, the Appeal Tribunal reversed, but found that the claimant was disqualified for a shorter period of time as the result of his failure to apply for available, suitable work as required by N.J.S.A. 43:21-5(c). Ibid. Although the Appeal Tribunal's decision was substantially more favorable than that of the deputy, the claimant appealed to the Board, which reinstated the finding of the deputy claims examiner and ordered that the claimant repay the benefits that he had received. Ibid.
On further appeal to us, we concluded that the Board had jurisdiction to reinstate the deputy's decision, despite the fact that the claimant's appeal was from that of the Appeal Tribunal. We held "that the Board's jurisdiction was complete and that it had the power to review the Appeal Tribunal's decision in all of its aspects." Id. at 412. We stated in construing N.J.S.A. 43:21-6(c) and (e), authorizing appeals to the Board of Review and permitting the Board on its own motion to "affirm, modify, or set aside any decision of an [A]ppeal
[T]ribunal": The statute does not limit the scope of the review, nor does it expressly or impliedly authorize a partial appeal or the appeal from only part of the decision of an Appeal Tribunal. As we said in Charles Headwear, Inc. v. Board of Review, 11 N.J. Super. 321 (App. Div. 1951), "[t]he appeal removes the claim in its entirety" and confers upon the Board complete review powers. Id. at 328. "Any other holding would be inconsistent with the statutory scheme for the disposition of disputed benefit claims." Ibid. [Heulitt, supra, 300 N.J. Super. at 412.]
We noted that if the Board's jurisdiction were restricted as the claimant sought, a determination by the Appeal Tribunal that was patently wrong would thus be permitted to stand, and the claimant would receive a windfall - a result contrary to the Board's duty to preserve the unemployment compensation fund for payments to eligible claimants. Ibid.
We then turned to Von Ouhl, noting that our decision in Heulitt was not inconsistent with it, because in Von Ouhl, the claimant's notice of appeal had been restricted to one claim, whereas here the notice of appeal was not limited, and the claimant "could not reasonably have expected that the Board would limit its inquiry to one narrow question and ignore the overriding issue in the case - his eligibility to obtain benefits." Id. at 413. We continued:
To the extent that Von Ouhl can be construed more broadly, as barring the Board from reviewing all of the issues decided by the Appeal Tribunal, we disagree with that decision. Just as the Board may determine a claimant's eligibility on a basis different than that found by the Appeal Tribunal, see
Ludwigsen v. New Jersey Dept. of Labor & Indus., 12 N.J. 64, 70 (1953), so may it find a claimant ineligible on a basis different from that found by the Appeal Tribunal, Charles Headwear, Inc. v. Board of Review, 11 N.J. Super. at 328. [Heulitt, supra, 300 N.J. Super. at 413.]
Our review of this precedent satisfies us that the present matter more closely resembles Charles Headwear and Heulitt than it does Von Ouhl. In this case, only one claim was filed, raising the single issue of whether Farrell had a reasonable assurance of reemployment as a substitute teacher in the 2008-2009 school year. That issue was decided partially in Farrell's favor by the Appeal Tribunal, but, dissatisfied with that partial success, Farrell appealed to the Board of Review. We conclude on the basis of the reasoning of the Charles Headwear and Heulitt decisions that the fact that Farrell attempted to limit the issue raised in her appeal to the date of the termination of her ineligibility for benefits did not deprive the Board of Review of jurisdiction to consider the issue of Farrell's eligibility for benefits in its entirety. Were we to hold otherwise and to permit Farrell to cherry-pick that aspect of a unitary decision that she sought to contest, we would render the Board powerless to vacate an award that it regarded, as in Heulitt, to be patently wrong, and would perpetuate a potential windfall to Farrell in a manner that violated the basic public policy of the unemployment compensation statute.
Having found that the Board possessed the jurisdiction to consider Farrell's claim for unemployment benefits in its entirety, we turn to the further issue of whether the Board's conclusion that Farrell was ineligible for benefits was supported by substantial credible evidence in the record. Brady v. Bd. of Review, 152 N.J. 197, 210-11 (1997); Mayflower Sec. Co., Inc. v. Bureau of Sec. in Div. of Consumer Affairs of Dept. of Law and Pub. Safety, 64 N.J. 85, 92-93 (1973); State v. Johnson, 42 N.J. 146, 162 (1964).
The statute governing this dispute had its genesis in federal law. In 1978, as a result of mandatory federal legislation, unemployment insurance coverage was extended to virtually all public and private employees of elementary and secondary schools. Federal law also mandated all states to enact legislation which would deny benefits during vacation periods between terms to any individual employed in an instructional, research, or principal administrative capacity for an educational institution. [Introductory Statement, Senate No. 3347, L. 1983, c. 221.]
In compliance with the federal mandate, New Jersey enacted N.J.S.A. 43:21-4(g)(1), which provides:
(g) Benefits based on service in employment . . . shall be payable in the same amount and on the terms and subject to the same conditions as benefits payable on the basis of other service subject to the "unemployment compensation law"; except that, notwithstanding any other provisions of the "unemployment compensation law":
(1) With respect to service performed after December 31, 1977 in an instructional . . . capacity for an educational institution, benefits shall not be paid based on such services for any week of unemployment commencing during the period between two successive academic years . . . to any individual if such individual performs such services in the first of such academic years (or terms) and if there is a contract or a reasonable assurance that such individual will perform services in any such capacity for any educational institution in the second of such academic year or terms.
We have noted that this statute is "tailored to meet the unique ten month term of educational employment" and the advent of a predictable hiatus during which actual work ceases as the result of summer vacation. Charatan v. Bd. of Review, 200 N.J. Super. 74, 79 (App. Div. 1985). Denial of benefits to persons in this employment group "'conforms with the Legislature's intent not to subsidize the vacation periods of those who know well in advance that they may be laid off for certain specified periods.'" Ibid. (quoting Davis v. Commw., Unemployment Comp. Bd. of Review, 394 A.2d 1320, 1321 (Commw. Ct. 1978). We have held that the statute is applicable to substitute teachers hired on a day-to-day basis. Patrick v. Bd. of Review, 171 N.J. Super. 424, 426 (App. Div. 1979).
The question that remains, therefore, is whether the evidence was sufficient to sustain the Board's conclusion that Farrell had a reasonable assurance of reemployment at the commencement of the summer vacation period, or whether that reasonable assurance did not arise until July 11, when she received the inquiry as to her desire to continue teaching, or August 19, when she was placed on the substitute teacher list by the Allendale Board of Education. The Appeal Tribunal chose certainty, and declared Farrell ineligible for benefits only after August 16, whereas the Board looked to Farrell's prior history and concluded that the Board of Education's determination of her eligibility to serve as a substitute teacher in the two preceding years provided reasonable assurance to Farrell that she would be found eligible in the following school year. As the Board said: "'Reasonable assurance' is not a guarantee of reemployment but exists where there is probable recall by the school."
We find the Board's reliance on a pattern of employment in this case, together with other evidence consisting of the Board's inquiry in July and Farrell's response, to have satisfied the statute's reasonable assurance requirement and to have been supported by the evidence in the record. In this regard, we are mindful of the limits of our capacity to review the Board's conclusions, and the requirement that we pay deference to the agency's expertise in construing the statutes that it is charged with enforcing. R & R Mktg., L.L.C. v. Brown-Forman Corp., 158 N.J. 170, 175 (1999); Smith v. Director, Div. of Taxation, 108 N.J. 19, 25 (1987). So long as the agency's action does not violate express or implied legislative policies, it is supported by substantial evidence, and in applying legislative policies to the facts, the Board did not clearly err in reaching a conclusion that could not reasonably have been made upon a showing of relevant factors, we must affirm. Public Serv. Elec. and Gas Co. v. State Dep't of Envtl. Protect., 101 N.J. 95, 103 (1985). Finding no error in the Board's factual findings and legal conclusions, we thus do so.
In concluding, we note the well-established principle that erroneously paid unemployment benefits must be refunded to that agency, regardless of the good faith of the claimant. N.J.S.A. 43:21-16(d); Bannan v. Bd. of Review, 299 N.J. Super. 671, 674 (App. Div. 1997); Fischer v. Bd. of Review, 123 N.J. Super. 263, 266 (App. Div. 1973). Thus we find that a refund of benefits paid for the weeks ending July 5, 2008 through September 6, 2008 in the sum of $1,870 was properly ordered in this case. We also find that Farrell's disqualification from receipt of benefits to September 6, 2008 was properly imposed for the reason set forth in the Board's opinion. Farrell was unemployed during the week commencing on August 31, 2008. N.J.S.A. 43:21-4(g)(1) provides that "benefits shall not be paid based on such services for any week of unemployment commencing during the period between two successive academic years."