July 15, 2013
CAPITOL WINE & SPIRITS CO., Appellant,
BOARD OF REVIEW, DEPARTMENT OF LABOR, and BRIAN KURLEJ, Respondents.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 16, 2013
On appeal from the Board of Review, Department of Labor, Docket No. 301, 548.
Fox Rothschild, LLP, attorneys for appellant (Michael Barabander, of counsel and on the briefs; Matthew R. Porio, on the briefs).
Jeffrey S. Chiesa, Attorney General, attorney for respondent (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Ellen A. Reichart, Deputy Attorney General, on the brief).
Respondent Brian Kurlej has not filed a brief.
Before Judges Simonelli and Accurso.
Capitol Wine & Spirits Co. (Capitol) appeals from a final determination of the Department of Labor's Board of Review (Board). The Board determined that claimant Brian Kurlej, an employee of Capitol, was eligible for unemployment benefits for a one week period and that Capitol was liable for benefit charges to its unemployment insurance account pursuant to N.J.S.A. 43:21-7(c)(1) for those benefits. On the basis of "Findings of Fact as developed by the Appeal Tribunal, " the Board affirmed the Appeal Tribunal's determination that Kurlej is eligible for benefits for the week ending August 21, 2010. Because we conclude that the Board's determination is not supported by the record, we reverse.
We draw the facts from the telephone hearing before the Appeals Examiner. Capitol is a wholesale liquor distributor. Kurlej is employed by Capitol as a salesperson. Kurlej's compensation is based entirely on commissions earned on sales. Every year in January and August, New Jersey's liquor wholesalers observe an industry-wide one week shutdown, offices and warehouses close, deliveries cease, and employees are idled. Although entitled to four weeks vacation each year, Kurlej must take two of those weeks during the January and August shutdowns. Capitol's hourly employees receive vacation pay for each of the shutdown weeks. Kurlej, who earns between $110, 000 and $120, 000 per year, is paid a token $100 for the shutdown weeks.
Kurlej initially maintained that he was not permitted to work during the August shutdown week and could not earn any commissions. He testified that "[t]he company does not deliver product to my customers so I can't earn money." Kurlej acknowledged, however, that he earns his commission on payment, not delivery, and that his customers typically pay their bills four to six weeks after he accepts their orders.
While conceding that any order Kurlej would solicit during the shutdown week would not be entered into Capitol's system until the company reopened, Capitol's human resources manager maintained that nothing prevented Kurlej from visiting his accounts and accepting orders for entry the following week. She testified that Kurlej received commission checks during the shutdown week and noted that there was no week in the year in which Kurlej did not receive commission payments.
Kurlej countered that as a result of the shutdown week, "four to five to six weeks later when my customers pay their bills, I am not paid. I generally have no income during . . . that time in August when I'm not committed to come into work." In response to Capitol's claim that he could work if he wished during the shutdown, Kurlej claimed that "[w]orking would be counterproductive because people would not order a week in advance not knowing what they actually wanted."
The Appeal Tribunal found that
[Kurlej] is paid on commission only and during the shut down period received commissions earned from a prior period. [Kurlej] is not permitted to work and no deliveries are made to customers during this week. The company does pay the sales force a nominal $100.00 during this time, but it is not salary. (emphasis added).
The Appeal Tribunal concluded that "[d]uring the weeks in question, [Kurlej] is not considered to have worked full-time, as the company had shut down. Therefore [Kurlej] was considered unemployed and is eligible for benefits from 08/15/10 through 08/21/10 under N.J.S.A. 43:21-19(m)(1)."
The Board "affirmed and adopted" the factual findings of the Appeal Tribunal except to note that the $100 paid to Kurlej for the shutdown week was vacation pay. The Board concluded:
N.J.A.C. 12:17-8.10 outlines the conditions under which an individual is eligible for benefits during periods of vacation. It states that an individual on vacation due to union or employment contract, who is not paid for a period or part thereof, is eligible for benefits. Likewise, the claimant in this case, received $100.00 vacation pay for the week ending August 21, 2010 which is less than the difference between his weekly benefit rate and his partial rate. Hence, he is eligible for benefits for the week ending August 21, 2010.
A reviewing court must defer to "an agency decision unless it is arbitrary, capricious or unreasonable, or it is not supported by substantial credible evidence in the record as a whole." Bailey v. Bd. of Review, 339 N.J.Super. 29, 33 (App. Div. 2001). Conversely, such court is obligated to determine "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record' considering 'the proofs as a whole, ' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility." In re Taylor, 158 N.J. 644, 656 (1999) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)).
N.J.S.A. 43:21-19(m)(1) provides the definition for "unemployment" for individuals such as Kurlej who are not also owners of the company:
(1) An individual shall be deemed "unemployed" for any week during which:
(A) The individual is not engaged in fulltime 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.
The regulation on which the Board relied, N.J.A.C. 12:17-8.10, provides in pertinent part:
(a) An individual who voluntarily takes a vacation is ineligible for benefits as the individual is unavailable for work. "Vacation" means a period of absence from work taken voluntarily by the employee with the employer's consent and with the intention of not working. (b) Where a union or employment contract calls for a vacation or holiday period with pay and permits the employer to close its operations for a specified period, the employees shall be ineligible for benefits. However, any employee who does not receive pay for the contractual vacation period or any part thereof may receive unemployment benefits if otherwise eligible.
As is readily apparent from a review of the applicable statute and regulation, the central issue presented to the Appeal Tribunal and the Board was whether Kurlej was "voluntarily" not working during the shutdown week. The Appeal Tribunal found that Kurlej "was not permitted to work." That finding, which was central to its and the Board's conclusion that Kurlej was "unemployed" for the August shutdown week, is not supported by the record.
Although Capitol required Kurlej to take two of his four vacation weeks to coincide with the annual shutdowns, Capitol contended that nothing stopped Kurlej from visiting his regular accounts and soliciting orders for the company during that week. Kurlej himself testified, not that he was prohibited, but that he was "not committed to come into work" during that week. When pressed to respond to Capitol's contention that he was free to work the shutdown week, Kurlej responded that "[w]orking would be counterproductive because people would not order a week in advance not knowing what they actually wanted" Capitol contends on appeal that there is no logic in that response because its customers are not closed during the shutdown week Accordingly they are forced to place orders one or more weeks before in order to maintain inventory during the shutdown Further Capitol argues should customers run low on inventory during the shutdown they would need to re-stock for the following week providing Kurlej the perfect opportunity to solicit an order for the next week's delivery
Because the central finding supporting the Board's determination finds no support in the record we are constrained to reverse.