August 16, 2011
SALVADOR MURILLO, PETITIONER-APPELLANT,
BOARD OF REVIEW AND HALKA NURSERIES, INC., RESPONDENTS-RESPONDENTS.
On appeal from Department of Labor, Board of Review, Case No. 159,410.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 5, 2011
Before Judges Wefing, Baxter and Hayden.
Petitioner Salvador Murillo appeals from a Final Decision of the Board of Review affirming a decision of the Appeal Tribunal finding him disqualified for unemployment benefits as of January 1, 2006, under N.J.S.A. 43:21-5(a) and, as a consequence, liable to refund the more than $13,000 he had received as such benefits.*fn1 After reviewing the record in light of the contentions advanced on appeal, we affirm.
Before proceeding to analyze the underlying facts of this matter, we are compelled to note that a series of unfortunate procedural missteps have occurred in this matter, delaying its final resolution. Among those missteps is the inability of the Division to locate documents in its files and the action of the Board of Review in submitting an appendix to its appellate brief in which it has included documents that were never part of the record below without having sought leave to do so. Petitioner has properly objected to this disregard of proper appellate practice. In our analysis of this matter, we have ignored those documents and have reached our conclusion without consideration of their contents.
Petitioner was employed for more than twenty years for Halka Nurseries. His position at the relevant time period was that of equipment operator, and the employer described petitioner as one of his key employees. Petitioner filed a claim for unemployment benefits in January 2006, reporting that he had been temporarily laid off. Petitioner had submitted similar claims for unemployment compensation benefits in 2004 and 2005, in light of the seasonal nature of the work. Petitioner's claim was approved, and he ultimately received benefits in excess of $13,000. Based upon a communication from the employer well beyond the ten-day deadline to contest a determination with respect to eligibility, the Department of Labor and Workforce Development sent a notice to petitioner dated July 16, 2007, advising him that he was disqualified for unemployment benefits because he had left work voluntarily without good cause attributable to the work. N.J.S.A. 43:21-5(a).
This notice advised petitioner that he had ten days to file an appeal. Petitioner, who has limited proficiency in English, filed his appeal on August 14, 2007, beyond the ten-day deadline. The Appeal Tribunal held a hearing on September 17, 2007. Petitioner testified that he had been laid off in January 2006 and never received any instructions to return to work. He also testified about the reasons for the delay in filing his appeal, noting his difficulties with English. The Appeal Tribunal dismissed his appeal for lack of jurisdiction, a decision with which the Board of Review concurred. Petitioner then appealed to this court. While his appeal was pending, the Board of Review filed a motion seeking to remand the matter for a determination on the merits. The Board noted in its moving papers petitioner's lack of fluency and the nineteen-month delay between the initial determination of eligibility and the notice of disqualification.
Petitioner opposed this motion, arguing that his due process rights had been violated by the manner in which the Board determined his ineligibility. He contended that we should deny the requested remand and decide those procedural issues. The Board responded by noting that according to a review of its file, petitioner had been temporarily laid off, and his employer had objected when its account was charged for benefits paid when Murillo did not return to work in March. The Board pointed out that in such a situation, petitioner would not be liable to refund the entire amount of unemployment compensation received but only the amount received after petitioner failed to return to work when work was available. After reviewing the parties' papers, we granted the Board's motion.
On remand, two further hearings were held, at which the employer testified, as well as his secretary. Petitioner's employer disputed the assertion that petitioner had been laid off. He said rather that petitioner came to him in late December and after receiving his paycheck and Christmas bonus, said he was going to Mexico. He said petitioner did not provide any information about plans to return.
The employer did testify that depending upon the weather, he would temporarily lay off employees at that time of year. He also said that he had a number of employees whose families were in Puerto Rico and he would regularly lay them off during the winter months so they could collect unemployment benefits and return to Puerto Rico to see their families. He did not place petitioner in that category. As we noted, the employer described petitioner as one of his key employees and said it was the weather that would determine whether petitioner would be laid off.
The employer testified that employees who were seasonally laid off would return to work on March 1. He said that this practice was well known to petitioner and that petitioner never contacted him again after telling him he was going to Mexico. The employer also testified that petitioner's brother was also employed at the nursery and that petitioner's brother never inquired about the possibility of petitioner returning to work.
Petitioner's attorney objected to this testimony, arguing that this testimony exceeded the scope of the remand hearing, which the attorney contended was limited to determining the date beyond which petitioner was no longer eligible for unemployment benefits, as opposed to re-examining his eligibility from the outset. The appeals examiner rejected this argument and considered the substantive merits of petitioner's eligibility. We see no error in this. The Board's moving papers sought a remand to permit a determination "on the merits." It was only the Board's responding papers, submitted in response to petitioner's opposition to the requested remand, that included references to the possibility that petitioner might not be responsible to refund the entire amount of benefits he had received. We granted the motion to remand, without imposing any limitation upon the scope of the remand proceedings.
Similarly, the fact that we remanded the matter for a determination on the merits disposes of petitioner's argument that the employer failed to show good cause for not appearing at the initial hearing.
Prior to the remand proceedings getting under way, petitioner's attorney requested copies of any documents in the possession of the Division or the employer that would bear on the question of whether the employer had made a timely objection to petitioner's unemployment claim. Nothing was produced other than certain electronic records maintained by the Division in its LOOPS (Local Office Online Payment System) system.
During the remand proceedings, petitioner again testified. He said that he had been laid off after Christmas and not recalled to work. He denied telling his employer that he was going to Mexico. He said it had been the employer's practice in the past to send a letter notifying him when to return to work but that he never received such a letter after this last layoff. He could not explain why he did not go to the employer in March, or thereafter, to ask if work were available. The employer said he had not sent a letter in March to petitioner because petitioner had told him he was going to Mexico.
The appeals examiner issued a written decision in which he described as "credible" the testimony of the employer and his secretary that petitioner had not been laid off but had said he was going to Mexico and did not return. This, the examiner correctly noted, was a personal reason, not attributable to petitioner's employment and thus petitioner was not eligible to collect unemployment compensation benefits for the period of time in question.
Petitioner appealed to the Board of Review, which affirmed the decision of the appeals examiner. Petitioner's appeal to this court followed.
On appeal, petitioner raises the following contentions for our consideration.
I. MR. MURILLO IS ENTITLED TO UNEMPLOYMENT BENEFITS BECAUSE HE WAS LAID OFF FROM WORK AND REMAINED ABLE AND AVAILABLE TO WORK.
II. DUE PROCESS AND FUNDAMENTAL FAIRNESS REQUIRE A FINDING THAT MR. MURILLO IS ENTITLED TO UNEMPLOYMENT BENEFITS WHERE THE DOL SUMMARILY REVERSED ITS PREVIOUS FINDING OF ENTITLEMENT 19 MONTHS AFTER THE INITIAL NOTICE OF ELIGIBILITY AND SEIZED BENEFITS, WITHOUT PROPER NOTICE, WITHOUT OPPORTUNITY FOR A FAIR HEARING, WITHOUT A FINDING OF GOOD CAUSE FOR LATE REOPENING BY THE EMPLOYER AND WHERE THE DECISION WAS BASED ENTIRELY ON EX PARTE, UNDISCLOSED AND UNSUBSTANTIATED COMMUNICATIONS.
a. Unemployment benefits are property interests protected by due process of law.
b. Due Process is violated where the decision to reverse unemployment benefits is made without notice and based entirely on undisclosed and ex parte communications.
c. Failure of the DOL to retain records and its reliance in administrative adjudication upon LOOPS "remarks", which are ministerial governmental entries that DOL chooses not to make part of the case record that it discloses to parties, violates due process.
d. Consideration of the employer's testimony more than three years after the initial benefit determination is improper where the employer failed to establish good cause for its failure to appear at any point during the multi-year adjudication.
e. The DOL denied Mr. Murillo the opportunity to have his case heard by a "neutral and detached" hearing body.
f. The hearing examiner violated Mr.
Murillo's procedural due process rights by inquiring into facts and issues beyond the scope of the remand.
g. The DOL's seizure of Mr. Murillo's subsequent unemployment benefits, without notice or a hearing, to offset an alleged liability that was pending review before the Appellate Division violated due process.
III. REOPENING IS IMPROPER WHERE THE EMPLOYER FAILED TO TIMELY APPEAL FROM THE INITIAL DETERMINATION AND FAILED TO APPEAR AT THE ENSUING HEARING.
IV. THE PLAIN LANGUAGE OF THE UNEMPLOYMENT COMPENSATION ACT PRECLUDES AN EMPLOYER FROM RETROACTIVELY CHALLENGING A CLAIM TO UNEMPLOYMENT BENEFITS WHERE THEY FAILED TO TIMELY RESPOND TO THE DOL'S REQUEST FOR INFORMATION AND THE INITIAL DETERMINATION.
Before proceeding to an analysis of petitioner's arguments, we note the standard that must guide our review of this matter. A final decision of an administrative body such as the Board of Review should not be disturbed on appeal unless it is arbitrary, capricious or unreasonable. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997); Karins v. City of Atlantic City, 152 N.J. 532, 540 (1988). An appellate court should undertake a "careful and principled consideration of the agency record and findings." Riverside Gen. Hosp. v. N.J. Hosp. Rate Setting Comm'n., 98 N.J. 458, 468 (1985). The findings of the administrative body should be affirmed if they "could reasonably have been reached on sufficient credible evidence present in the record, considering the proofs as a whole . . . with due regard also to the agency's expertise . . . ." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965) (citation omitted). The Supreme Court has summarized the factors that must be considered.
(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. [Karins, supra, 152 N.J. at 540 (citation omitted).]
One of petitioner's fundamental arguments is that the employer should not have been permitted to question petitioner's eligibility for unemployment compensation benefits since it did not file a challenge within the ten-day deadline set by N.J.S.A. 43:21-6(b)(1) but waited until it experienced a change in its employer contribution account. This argument overlooks N.J.S.A. 43:21-16(d), which permits the Division four years in which to recoup overpayments. N.J.A.C. 12:17-3.3(b)(1), moreover, provides that the Division may reconsider a final decision with respect to a claimant's eligibility for unemployment compensation benefits in cases of fraud, misrepresentation or misconduct. In light of the finding of the appeals examiner that the employer's testimony that petitioner said he was leaving for Mexico was credible, it must follow of necessity that petitioner misrepresented his status when he claimed he was laid off and entitled to unemployment compensation benefits.
Petitioner also argues that he should have received a hearing before the Division made a determination with respect to his eligibility for unemployment compensation benefits. In support of this proposition, he relies upon the principle that unemployment compensation benefits are a property right to which principles of due process attach. Our Supreme Court has agreed with that principle. Rivera v. Bd. of Review, 127 N.J. 578, 584 (1992) (recognizing that the receipt of unemployment compensation benefits creates a property right that is protected by due process). Further, he cites 42 U.S.C.A. § 503(g)(1) for the proposition that a hearing must precede any deduction from unemployment benefits. We do not read that statute to require a hearing prior to any such deduction. It calls for a hearing but does not state at which juncture the hearing must take place.
In our judgment, the Division must be vested with some discretion in determining the scheduling of such hearings. We noted, for instance, more than thirty years ago that the Division processed more than 14,000 such cases a year. Vasquez v. Horn, 181 N.J. Super. 529, 536 (App. Div. 1981). Petitioner reframes that argument to contend that the
Division should not have acted to seize the benefits payable to him under his subsequent unemployment compensation claim while his appeal was pending. While petitioner's request for a stay of that seizure was denied by the Division, he did not seek a stay from this court.
Petitioner received a full hearing with respect to the question of his eligibility for unemployment compensation benefits. Petitioner was represented by counsel at those hearings, and his attorney had the opportunity to cross-examine petitioner's employer and the employer's secretary. We see no support in this record for petitioner's assertion that the appeals examiner was biased against him. That a decision is adverse to a claimant does not demonstrate the presence of bias. Although petitioner's attorney complained that she had not received the Division's records sufficiently in advance of the hearing, she made no request that the hearing be continued or that the employer or his secretary return for additional cross-examination. Petitioner received the process to which he was due.
Petitioner also complains that during the course of the remand proceedings, he was not provided with copies of the documents the employer said he had filed protesting Murillo's claim for unemployment compensation benefits. The Division did produce its LOOPS records, which were utilized during the course of the hearing. While petitioner should have been supplied with the copies requested, we are satisfied that their lack does not justify a reversal of the Board's determination. Petitioner does not contend that the LOOPS records were inadmissible under evidential rules but that the absence of the employer's records hampered his attorney's ability to cross-examine the employer and his secretary. The most that petitioner would be entitled to would be an additional hearing to permit further cross-examination, but petitioner has not requested that relief, either in his original brief or in his reply brief, submitted after the Board of Review included improper material in its appendix. Certainly, the failure to have produced those documents would not justify the retention of unemployment compensation benefits by an individual who was otherwise ineligible to receive them. Vasquez, supra, 181 N.J. Super. at 534 (noting that it is the purpose of the unemployment compensation law "to provide benefits to involuntarily unemployed persons who meet the specific eligibility conditions of the law . . . not to provide benefits to ineligible persons").
The delays that attended the handling of this matter are unfortunate. There is no indication that they spring from ill-will or hostility to petitioner. We analyze this issue through the same prism we employed when considering the failure to produce documents -- neither justifies retention of benefits by an ineligible individual.
The Final Decision of the Board of Review is affirmed.