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Hair Systems, Inc v. Board of Review


June 1, 2011


On appeal from the Board of Review, Department of Labor, Docket No. 219,235.

Per curiam.


Submitted April 13, 2011

Before Judges Sapp-Peterson and Simonelli.

Appellant, Hair Systems, Inc. (Hair Systems), appeals from the November 16, 2009 decision by the Board of Review (Board) finding that its former employee, respondent Daniel Fox, was not disqualified from receiving unemployment benefits for the weeks ending August 2, 2008, through September 27, 2008, and that Fox was not required to refund the $3996 in benefits he received for that period. We affirm but remand for further proceedings at the request of the Board.

Fox commenced his employment with appellant in 1998 and worked continuously until he sustained a work-related injury on July 6, 2006. He sustained a partial collapse of both lungs. He received workers' compensation benefits through February 2008, at which time he was cleared to return to work with restrictions. One such restriction was that he not perform the same duties to which he had previously been assigned because he could be exposed to certain chemicals. When he contacted appellant, Fox claims the Human Resources Department advised him that he had been terminated for filing a third-party suit.

Fox filed for unemployment benefits on July 27, 2008. On October 7, the Deputy Director determined that he was disqualified for benefits because he left work voluntarily without good cause attributable to his employment, and sought a refund for benefits totaling $3996 that Fox had received for the weeks ending August 2, through September 27.

Fox appealed and a telephonic hearing was held on June 10, 2009, at which all parties participated. The critical issue before the Appeals Examiner was a determination whether Fox purportedly resigned or abandoned his job and when he ceased receiving workers' compensation benefits.

Fox testified that he received workers' compensation benefits through February 2008. At that time, he was cleared to return to work with restrictions. He contacted Arlene Perea (Perea), Hair Systems' Human Resources Manager, and was told at that time that he had been fired because he filed a workers' compensation suit.

Perea did not know when Fox ceased receiving workers' compensation but testified that Hair Systems sent letters to Fox on February 14, 2007, April 22, 2007, and June 22, 2007. The June 22 letter advised:

As you know, Hair Systems[,] Inc. . . . has provided you with correspondence concerning its employment policies pertaining to Family and Medical Leave, Workers['] Compensation, COBRA, 401K Pension Plan and other documentation. Under Hair Systems' Family and Medical Leave policy contained in its employee handbook, you were required to provide the company with a certification from your health care provider, continue to make co-payments for health insurance, and personally speak with Human Resources or other management supervisor[.]

According to Perea, additional correspondence was sent to Fox dated July 9, stating: "'You know we have sent you numerous letters by both regular and certified mail. The correspondence has covered your rights and obligations under the Family and Medical Leave Act consolidated under the Budget Reconciliation Act, Hair Systems Incorporated employment policies and other employment issues.'" Perea acknowledged that if Fox was still receiving workers' compensation benefits in 2007, when the letters were being sent to him, there would have been no reason for him to return to work. She was unable, however, to provide any information concerning when Fox's workers' compensation benefits ceased.

Fox acknowledged receiving the letters but indicated that he did not open them because he understood that all communications were to flow between the attorneys. He testified that each time he received correspondence, he turned it over to his attorney.

The Appeals Examiner was unable to complete the hearing because he was slated to commence another hearing. Both parties agreed to provide information regarding the date on which workers' compensation benefits ceased, which the Appeals Examiner queried as "the whole crux of the matter[,] right?"

The hearing resumed on July 8, 2009. Fox and his attorney appeared telephonically. Hair Systems' representative, Perea, did not appear. The Appeals Examiner noted for the record:

For the record[,] the hearing was set up for 1:30 today. It was supposed to be scheduled last week. Ms. Arlene Perea was on vacation and asked for us to schedule it July the 8th[,] which is today[,] at 1:30. She was --- and they were told to call in [thirty] minutes prior to the time of the hearing. Mr. Fox --- I'm sorry --- yeah --- Mr. Fox and Mr. Rudnick --- Mr. Fox is the claimant who is at Mr. Rudnick's office. The secretary for Mr. Rudnick did call in at 1:00 prior to the 1:30 hearing. I have not heard from the other party. I did call the other party approximately 1:35 and left messages with both Ms. Perea and Mr. [---] I think his name is Morris.

The Appeals Examiner then proceeded to frame the remaining issues before the Appeal Tribunal as verification when Fox received workers' compensation benefits. He acknowledged that he had received copies of two reports following the first hearing and that the February 21, 2008 report from the workers' compensation doctor cleared Fox to return to work as of that time.

Fox testified that when he contacted Perea to advise that he was able to return to work, she told him that he had resigned or abandoned the job because he failed to provide medical records, which Fox acknowledged he had not done. He testified further that since February 2008, he had pursued "[a]ll kinds" of employment and "applied to all different places." The Appeals Examiner inquired: "And these are [the] applications you put in?" Fox responded: "Yes. . . . in person."

The Appeal Tribunal reversed the determination of the Deputy Director, finding that Fox was not disqualified and therefore not required to refund the $3996 in benefits he received. It found that Fox had been discharged on July 9, 2007, for failing to provide medical information, but documentation showed that at that time, Fox was still being paid workers' compensation benefits and continued to receive those benefits through February 2008. The Appeal Tribunal concluded: "The claimant's actions were not a wanton or willful disregard of the employer's interest or a deliberate violation of the employer's rules. Therefore, no disqualification arises under N.J.S.A. 43:21-5(b) as the claimant was not discharged for misconduct connected with the work. Since there is no disqualification, there is no refund."

Hair Systems appealed to the Board. In a letter dated July 24, 2009, it commenced its appeal by characterizing the decision as "an outrage to the citizens of New Jersey and will be copied to Governor Corzine for referral to the appropriate oversight department." It made no attempt to explain to the Board why it failed to appear before the Appeal Tribunal on July 8, 2009, the return date of the hearing, which had been scheduled for that date at its request. The appeal raised a myriad of issues. For example: (1) Fox failed to prove that he was able to work and actively seeking work; (2) Fox's alleged material misrepresentation to the State of New Jersey; (3) Hair Systems' presentation of documents proving that Fox was unable to work. On the basis of the Findings of Fact and Opinion developed by the Appeal Tribunal, the Board "agree[d] with the decision reached." The present appeal followed.

On appeal, Hair Systems raises the following points for our consideration:







A claimant seeking unemployment compensation benefits bears the burden of establishing entitlement to an award of benefits. Zielenski v. Bd. of Review, 85 N.J. Super. 46, 51 (App. Div. 1964). "[A] claimant shall be disqualified from receiving unemployment compensation benefits '[f]or the week in which the individual has left work voluntarily without good cause attributable to such work, and for each week thereafter until the individual becomes reemployed . . . .'" Brady v. Bd. of Review, 152 N.J. 197, 213 (1997) (quoting N.J.S.A. 43:21-5(a)(alteration in original)). In applying N.J.S.A. 43:21-5(a), a court must distinguish between "a voluntary quit with good cause attributable to the work" and, on the other hand, "a voluntary quit without good cause attributable to the work." Id. at 213-14. "[G]ood cause" is "cause sufficient to justify an employee's voluntarily leaving the ranks of the employed and joining the ranks of the unemployed." Id. At 214 (quoting Domenico v. Bd. Of Review, 192 N.J. Super. 284, 287 (App. Div. 1983) (internal quotation marks omitted)). In Domenico v. Board of Review, we set forth the factors to be considered in determining the existence of good cause in a given matter:

In scrutinizing an employee's reason for leaving, the test is one of ordinary common sense and prudence. Mere dissatisfaction with working conditions which are not shown to be abnormal or do not affect health, does not constitute good cause for leaving work voluntarily. The decision to leave employment must be compelled by real, substantial and reasonable circumstances not imaginary, trifling and whimsical ones. . . . [I]t is the employee's responsibility to do what is necessary and reasonable in order to remain employed. [192 N.J. Super. at 288 (citations and internal quotation marks omitted).]

The Board accorded deference to the Appeal Tribunal's factual determinations. The factual determinations were aided not only by Fox's testimony, which the Appeals Examiner credited, but by the numerous employment applications he submitted evidencing his efforts to secure employment after he contacted Hair Systems in February 2008 and was advised that he was cleared to return to work. Crediting his testimony, the Board agreed that Fox had not voluntarily resigned from employment, for which disqualification would apply. Likewise, the Board agreed with the Appeal Tribunal's finding that Fox's failure to provide medical information did not constitute misconduct that would render him ineligible for benefits under N.J.S.A. 43:21-5(b).

Our role in reviewing the decision of an administrative agency is limited. We will not upset the determination of an administrative agency absent a showing it was arbitrary, capricious, or unreasonable, that it lacked fair support in the evidence, or that it violated legislative policies. In re Taylor, 158 N.J. 644, 656 (1999); Brady, supra, 152 N.J. at 210-11; In re Musick, 143 N.J. 206, 216 (1996); Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980); Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963). Further, decisions by administrative agencies carry with them a strong presumption of reasonableness. City of Newark v. Natural Res. Council in Dep't Envtl. Prot., 82 N.J. 530, 539-40, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980).

First addressing whether Fox left work voluntarily without good cause attributed to work, at the time Hair Systems terminated Fox in July 2007, he was still receiving workers' compensation benefits and continued to receive those benefits through February 2008. Next, insofar as failing to provide the medical information, N.J.S.A. 43:21-5(b) does not define misconduct. It provides that an employee is ineligible for benefits for any week during which the employee has engaged in misconduct and for the five weeks immediately following. Ibid. We have previously held that "misconduct" under this statute contemplates conduct by an employee that is willful, deliberate and intentional. Demech v. Bd. of Review, 167 N.J. Super. 35, 38 (App. Div. 1979); see also Beaunit Mills, Inc. v. Bd. Of Review, 43 N.J. Super. 172, 183 (App. Div. 1956), certif. denied, 23 N.J. 579 (1957). The record does not support a finding of willful, deliberate and intentional conduct by Fox in connection with the requested medical information. Consequently, the Board properly concluded Fox did not engage in misconduct that would have rendered him ineligible for unemployment benefits.

The remaining arguments set forth in Point Three were not presented before the Appeal Tribunal during the first hearing. Moreover, since Hair Systems inexplicably failed to appear at the second hearing, these arguments were not advanced during the second hearing. Although raised before the Board, it appears the Board limited its consideration to the issues raised before the Appeal Tribunal. Given the lack of any explanation for its failure to appear at the July 8 hearing, we find the Board did not err or abuse its discretion by limiting its consideration to the issues presented before the Appeal Tribunal.

Nonetheless, at the Board's request, we remand to the Board for the limited purpose of affording it the opportunity to reconsider one issue. Specifically, the Board requests an opportunity to consider the availability of Fox's previous position in relationship to his ability to perform the duties associated with that position once he was cleared to return to work in February 2008. Resolution of this issue is necessary so that a monetary determination can be made regarding Fox's eligibility to use the base year or alternative base year in determining monetary benefit amounts.

Affirmed as modified and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.


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