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Allied Interior Contractors Inc., T/A Allied Interiors v. Board of Review and Kristine Deirocini


October 13, 2011


On appeal from the Board of Review, Department of Labor and Workforce Development, Docket No. 192,672.

Per curiam.


Submitted September 27, 2011

Before Judges Carchman and Baxter.

Allied Interior Contractors, Inc. (Allied) appeals from the June 1, 2010 final agency decision of the Board of Review (Board), in which the Board found that Allied's former employee, Kristine Deirocini, demonstrated good cause for leaving her employment and was therefore eligible for unemployment compensation benefits. The record amply supports the Board's conclusion that a pattern of vulgar and degrading comments about women, made by the president of the company, created a hostile work environment that justified Deirocini leaving her employment. We affirm.


Deirocini was employed by Allied as a project accountant from March 21, 2006 through June 13, 2008. Deirocini and Stephanie James, Deirocini's goddaughter, were the only women who worked in the office. On June 12, 2008, the day before Deirocini resigned, a co-worker, Timothy Shire, approached Deirocini to report a coarse and demeaning comment made by Michael Powell, Allied's president. Specifically, Shire told Deirocini that Powell, referring to James, had said, "if only her brain was as big as her tits." Although Deirocini had not heard Powell's remark, Powell was speaking loudly enough for everyone in the vicinity to hear what he said.

According to Deirocini, Powell's remark about her goddaughter was not an isolated incident. On the contrary, similar remarks were made "daily." Deirocini's testimony before the Appeal Tribunal*fn1 described the office environment, and Powell's gender-biased remarks, as follows:

It has been varied[.] [I]t could be anywhere from referring to . . . a woman in an authoritative position that may have been running a job[,] being it was a construction company. Please pardon my language "your [sic] just a bitch" "dumb bitch" "stupid blonde bitch" "c_nt"*fn2 which I despise that word. I want [sic] even say it.

Deirocini added that Powell also referred to women as "m fer." When Deirocini's attorney stated that the actual word was "mother f_cker,"*fn3 Deirocini agreed. According to Deirocini, Powell routinely made degrading comments about women, namely, that women "were always stupid they were always dumb they were always no good." Deirocini explained that although the comments were "never directed" at her, they were disturbing; and Powell's crude remark about her goddaughter was the breaking point. She thought about Powell's remark overnight, and the next morning decided she had "heard enough. I hear women degraded enough[.] I'm done."

When asked why she had never confronted Powell about his degrading comments about women, she responded:

Because as the owner of the company we had no person[ne]l department. We ha[d] no written policy regarding these types of things. And basically Mr. Powell's attitude was he was the owner and if you didn't like the way he conducted business you can either seek employment elsewhere or "you can get [a] home equity loan and take it on you[r] house and start your own business[.]" Not to me directly [but] to other people.

Deirocini also explained that she had remained on the job for two years, despite the unpleasant work environment, because the job "was close to home and it was a good paying job. And the employment [market] was bad then and it's bad now."

Powell testified that Deirocini had not told him why she was quitting on the day she "collected her things and stormed out" of the office. Nonetheless, he believed she quit because she resented his criticism of a bookkeeping mistake she had made that resulted in an overpayment of $1300 to a subcontractor. He added that at the time Deirocini terminated her employment, she was already on probation "for numerous bookkeeping mistakes." He acknowledged that he would not have known of the $1300 overpayment unless Deirocini had brought her error to his attention.

When asked whether he had ever "used profanity in the work place," Powell answered "I did." Powell conceded that other than "placards on the doors in the lunchroom" that had been provided by "the [S]tate," there were no written policies or procedures describing the standards of appropriate conduct in the workplace setting. He commented that because "it's a new company," he was "still in the working phases" of developing workplace standards.

Allied also presented the testimony of its employee, James Thompson, who testified that he had never heard Powell "using negative terms toward[] women or about women." Thompson did, however, concede that he had heard "a few" derogatory statements in the office. He also testified that he had, on occasion, heard Deirocini herself using profane language.

Following the September 28, 2009 hearing, the Appeal Tribunal issued a decision on November 2, 2009 holding Deirocini disqualified for benefits pursuant to N.J.S.A. 43:21-4(a) because she left her employment without good cause attributable to the employment. In particular, although the Appeal Tribunal credited Deirocini's testimony about Powell's gender-biased remarks, the Appeal Tribunal ultimately concluded that by not informing the employer that she found his remarks offensive, she had "condone[d] such behavior."

On June 1, 2010, the Board reversed the decision of the Appeal Tribunal, noting that it was "compelled to supplement the [Appeal Tribunal's] finding of facts to accurately reflect the record[.]" The Board noted that in addition to Powell's comment about James's breasts, there were "other instances where the owner made gender-biased comments against women." Ultimately, the Board rejected the Appeal Tribunal's determination that because none of Powell's comments were directed at Deirocini, and because she had failed to complain about the working conditions prior to quitting, she had not established good cause for leaving her employment.

Relying on Lehmann v. Toys 'R' Us, Inc., 132 N.J. 587 (1993), the Board concluded that "[e]vidence of sexual harassment directed at other women is relevant to the character of the work environment and its effects on the [claimant]." The Board held that even though Powell's comments were not directed to Deirocini, his oft-repeated "biased comments" created "abnormal working conditions" that justified Deirocini in terminating her employment. The Board also reasoned that Powell's constant reminder to his employees, that if they did not like his comments they could leave, created "an atmosphere of intimidation which discouraged [Deirocini] from complaining about the working conditions," and justified her conclusion that complaining "would have proved futile."

The Board concluded that Deirocini demonstrated good cause attributable to the work for leaving her job, and held that she was not disqualified for unemployment compensation benefits. The Board remanded Deirocini's claim to the deputy claims examiner for evaluation of whether Deirocini satisfied the "week-to-week requirements of eligibility."

On appeal, Allied argues that the decision of the Board "is unreasonable, offends legislative policy, and is not supported by substantial credible evidence." In particular, Allied maintains that: Deirocini left her employment for personal reasons that did not constitute good cause; Powell's behavior was "non-sexual" in nature; the Board improperly allowed Deirocini to mention the settlement of her sexual harassment lawsuit against Allied as proof to support her unemployment compensation claim; and Deirocini should be disqualified from unemployment compensation benefits because she failed to take reasonable steps to remain employed.


The central issue in this appeal is whether, as the Board held in its final decision, Deirocini should be held eligible for benefits pursuant to N.J.S.A. 43:21-5(a) because she left work voluntarily with good cause attributable to the work. At the time Deirocini's claim was filed,*fn4 a section of the New Jersey Unemployment Compensation Law, N.J.S.A. 43:21-5(a), provided that a claimant is disqualified for 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 and works four weeks in employment . . . and has earned in employment at least six times the individual's weekly benefit rate . . . . [N.J.S.A. 43:21-5(a) (emphasis added).]

An employee who has left work voluntarily bears the burden of establishing that he or she did so with good cause attributable to such work. Brady v. Bd. of Review, 152 N.J. 197, 218 (1997).

While N.J.S.A. 43:21-5(a) does not define "good cause," the statute has been construed to require more than mere dissatisfaction with working conditions:

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. [Domenico v. Bd. of Review, 192 N.J. Super. 284, 288 (App. Div. 1983) (internal quotation marks and citations omitted).]

Thus, an employee who quits a job without a sufficient work-related reason, is disqualified from receiving benefits. N.J.S.A. 43:21-5(a).

Allied argues that Deirocini's reasons for resigning were entirely unrelated to any demeaning comments Powell may have made about women in general, or Deirocini's goddaughter in particular. Allied asserts that Deirocini quit because she was upset by Powell's criticism of her bookkeeping errors. Citing Self, supra, 91 N.J. at 457, the company argues that Deirocini's reasons for leaving her employment were purely personal, having nothing to do with her employment, thereby disqualifying her from receiving unemployment compensation benefits.

As is evident from the record, there was a sharp divergence in the testimony, with Deirocini contending that the bookkeeping error had nothing to do with her decision to quit, and Powell claiming the opposite. The Appeal Tribunal had the opportunity to hear the testimony of both Deirocini and Powell, and its November 2, 2009 decision demonstrates it accepted the former and rejected the latter. When an agency factfinder evaluates the credibility of witnesses and makes findings of fact, we are bound by those findings where, as here, they are supported by substantial and credible evidence in the record. Close v. Kordulak Bros., 44 N.J. 589, 599 (1965). We decline to disturb the Appeal Tribunal's and the Board's finding that the atmosphere in the workplace was pervaded by a daily stream of demeaning and degrading remarks about women.

Allied also argues that because Deirocini improperly relied on a hearsay account from Shire concerning Powell's remark about James's "tits," the remaining circumstances at the workplace were nothing more than "benign conduct such as swearing and mild profanity - none directed at Deirocini and none directed only at women." Allied argues that Deirocini was consequently not entitled to unemployment compensation benefits. Such a characterization grossly understates the daily stream of invectives against women. Comments such as "bitch," "dumb bitch," "stupid blonde bitch" and "c_nt" -- all of which were heard by Deirocini -- are neither "benign" nor "mild profanity." Instead, the daily use of such degrading language creates a hostile work environment even when the petitioner or claimant is not herself the target of the remarks, so long as she hears the remarks or is aware that such remarks have been made. Lehmann, supra, 132 N.J. at 611.

Moreover, we reject Allied's effort to rely on two unpublished decisions of this court, Powers v. Bd. of Review, No. A-6257-07 (App. Div. August 11, 2009), and Dennery v. Bd. of Review, No. A-4055-08 (App. Div. April 12, 2010), as unpublished decisions have no precedential value. R. 1:36-3.

Finally, we reject Allied's contention that it was unfairly prejudiced, and denied a fair and unbiased hearing, when Deirocini was permitted to testify about the settlement of her sexual harassment lawsuit against Allied and Powell. First, we state the obvious. Allied never objected to that testimony. In the absence of an objection, the testimony in question does not constitute reversible error unless "clearly capable of producing an unjust result." R. 2:10-2. We are satisfied that Allied has not met such a standard because nothing in the opinion of the Appeal Tribunal or of the Board remotely suggests that this brief portion of Deirocini's testimony played any role in the decision ultimately reached by the Board in Deirocini's favor.


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