On appeal from the Board of Review, Department of Labor and Workforce Development, Docket No. 222,697.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 17, 2010
Before Judges Sabatino and Ashrafi.
Claimant, Michael Lammers, appeals the Board of Review's final agency decision of September 22, 2009, determining that he was disqualified for unemployment benefits under N.J.S.A. 43:21-19m(1) and N.J.A.C. 12:17-12.1. Because the Board correctly applied these applicable statutory and regulatory provisions, we affirm.
Claimant filed a claim for unemployment benefits on February 8, 2009. The record indicates that, at all times relevant to this matter, claimant has been the sole shareholder and the president of two companies organized as closely-held corporations under the laws of New Jersey: M.L. Service Associates, Inc. ("M.L. Service"), and AHM Service Corporation ("AHM"). The business of the two companies mainly involved the assembly and servicing of outdoor patio furniture and gas grills. The companies have functioned as sister corporations, employing the same persons, including claimant, during their periods of operation.
According to claimant, the companies encountered serious financial difficulties and revenue losses, particularly after their main customer, a large retail chain, stopped sending orders. Claimant testified at his hearing before the Appeal Tribunal in June 2009 that AHM has been inactive since July 2008. However, as of the June 2009 hearing when the factual record was developed, AHM had not yet been formally dissolved through the requisite filings with the Secretary of State. Claimant further testified that he last performed work for M.L. Services in September 2008, and that the company has been dormant since that time. He indicated that he has not dissolved M.L. Services either, because the company owes him certain funds that he had loaned to it, and also because he hoped to revive that company if more customers materialize.
After hearing the relevant proofs, the Appeal Tribunal found claimant ineligible for benefits under the pertinent statutory provision, N.J.S.A. 43:21-19m(1), and the associated regulation, N.J.A.C. 12:17-12.1. The Board of Review sustained the Tribunal's determination.
In N.J.S.A. 43:21-19m(1)(A), the Legislature specifically defined "unemployment" for the purpose of benefit entitlement as follows:
(1) An individual shall be deemed "unemployed" for any week during which:
(A) The individual is not engaged in full-time work and with respect to which his remuneration is less than his weekly benefit rate, including any week during which he is on vacation without pay; provided such vacation is not the result of the individual's voluntary action, except that for benefit years commencing on or after July 1, 1984, an officer of a corporation, or a person who has more than a [five percent] equitable or debt interest in the corporation, whose claim for benefits is based on wages with that corporation shall not be deemed to be unemployed in any week during the individual's term of office or ownership in the corporation[.]
[N.J.S.A. 43:21-19m(1)(A)(emphasis added).]
In furtherance of this legislative mandate disqualifying certain corporate shareholders, officers and creditors from receiving unemployment benefits, the Department of Labor and Workforce Development adopted, after appropriate public notice and comment, an administrative regulation, ...