Alan Schorr’s Employment Case of The Week ending May 16, 2014 

Wilson v. Board of Review, 2014 N.J. Super. Unpub. LEXIS 1126 (unpublished) (N.J.App.Div. May 16, 2014)

This week, my attention turns to back to the area of unemployment. There tends to be a lot of unemployment articles in this column for several reasons. First, unemployment is an area of concentration for myself and my firm and we are one of the few firms that really focus on unemployment law. Second, there are many more Appellate unemployment decisions than employment decisions, in part because there is no filing fee for the appeal, and therefore there are many pro se appeals, like this one brought by Giana M. Wilson. It is also, in part, because there are so many screw-ups by the Board of Review, which I will discuss below. Third, this is a very complicated, interesting, and developing area of employment law, and unemployment law touches every other facet of employment law.

The facts of this week’s Case of the Week are rather mundane, but I wanted to use this opportunity to rant a bit about the deference that Appellate Courts (I believe) wrongly accord the factual determination and credibility determinations of the Appeal Tribunal. Ms. Wilson was an assistant manager in training for Joyce Leslie stores. She alleges that she advised her supervisor that she was going to need more money or else she would need to start looking for another job. It is undisputed that the supervisor spoke to her manager(s) and came back with an offer, but there the stories sharply divide.

Joyce Leslie says that they offered Ms. Wilson an assistant manager position, which entailed a salary increase, medical benefits and a bonus. The employer says that Ms. Wilson conditioned her acceptance on receiving an extra week of vacation. When that was declined, the employer alleges that Ms. Wilson tendered her resignation. She said Ms. Wilson testified that she was offered a $1.00 increase but no medical benefits, no bonus, and no assistant manager position. When vacation was denied, she asked for fewer days. It appears from the opinion that, thereafter, Ms. Wilson did resign, but on appeal she argued that she had good cause.

If that is what the testimony bore out, then the Board of Review and the Appellate Division probably made the right call on this one. Quitting a job because a request for a raise is denied has consistently been found not to be good cause for voluntarily leaving work for purposes of unemployment. The part of this decision that really irked me is the deference that the Appellate Division is willing to give to the Appeal Tribunal examiner.

In 1981, the Supreme Court, in a 4-2 decision, decided to grant the Department of Labor an exemption for the formality of adjudication that the rest of the Office of Administrative Law is expected to follow. Unemployed-Employed Council, Inc. v. Horn, 85 N.J. 646 (1981). The Court did so over a loud and logical dissent, and despite that fact that the Legislature had never evidenced an intention to so exempt unemployment hearings from the Administrative Law regulations. The decision had the effect of placing Appeal Tribunal examiners on the same level in terms of fact-finding as Administrative Law Judges. The dissent was properly horrified:

The majority’s analysis thus does violence to the meaning and intent of the statute. An appeal tribunal simply is not an “agency” or “the head of an agency,” either within the statutory definition of those terms or according to their common usage. The majority’s holding will exempt from the jurisdiction of the OAL Act every low-level administrative hearing officer empowered to hear cases and to make initial determinations and thereby will greatly abridge the scope of the OAL Act in a way which the Legislature could not have intended. Paradoxically, the majority recognizes that the “signal improvement” of the act was “the establishment of a corps of independent hearing officers, referred to as ‘administrative law judges.'” Ante at 649. But by its holding today — the first to construe the exclusionary provisions of the act — the majority engages in a tortuous exercise in statutory construction to reach a result unsupported by the statute which vastly reduces the role of administrative law judges in administrative decision-making in New Jersey.

Pollack dissent at 666.

The majority downplayed Justice Pollack’s concerns however:

Hence, the fear voiced by the dissent that any low-level employee of a subordinate branch or division of an agency who hears cases can qualify as an “agency head” by the simple expedient of “deciding” such cases — thereby avoiding the application of the OAL — is unwarranted. Post at 666. We determine in this case only that an intermediate appellate body that has statutory decisional authority and the essential statutory characteristics of the appeal tribunals can reasonably be considered as an agency within the terms and intendment of the statutory exemptions of 8(b).

Majority decision at 659-660.

The problem is that now, having removed the protection of the OAL regulation from unemployment matters, the Appellate Division routinely grants unwarranted deference to Appeal Tribunal examiners’ decisions. These examiners rarely, if ever, have any legal training, and I suspect that many do not have much training of any kind. They are making decision that are dramatically affecting the lives of New Jersey’s most vulnerable citizens, and their decisions involve significant sums of money. In 1981, the maximum unemployment claim was worth $3,458.00 (26 weeks at $133). In 2012, when Ms. Wilson applied for benefits, the maximum unemployment claim was $62,073.00 (99 weeks at $627/week). These are no longer small claims, and should not be treated as an inconvenience by the Court system.

Adding to these problems is the fact that, because unemployment hearings have been exempted from the usual administrative procedure rules, they have decided that it is no longer necessary to have in-person hearings. These hearings are now held exclusively by telephone. I do not have a problem with the hearings being conducted by telephone. It saves a great deal of time and expense. But, the Appellate Courts fail to recognize that Appeal Tribunal examiners are not Administrative Law Judges, that they are not governed by the same rules of evidence and procedure, and that they have no ability to judge the demeanor or facial expressions of a witness. Yet, the Appellate Division, following old law that well pre-dates the decision to exempt Appeal Tribunal examiners from the rules and procedures, still give full deference to the fact-findings of the Appeal Tribunal.

In this case, the Court went so far as to state repeatedly the deference afforded the Appeal Tribunal. At one point, the Court states, “Giving due regard to the Appeals Examiner, who had the opportunity to assess the credibility of appellant and her employer, we conclude the Board’s decision to deny claimant benefits and to require repayment of the benefits received is supported by substantial, credible evidence.” Yet, the Appeals Examiner really had no unique opportunity to assess credibility. The examiner cannot see facial expressions or body language. The Appellate Division can listen to the digital recording and hear exactly what the Appeals Examiner heard. In fact, they can hear better, since often the Appeals Examiner interrupts and does not fully listen to the testimony.

There is simply no basis for the level of deference given to an unemployment Appeals Examiner. The Appellate Court cannot state with intellectual honesty that a questionably-trained Appeals examiner is better equipped to measure the credibility of a witness over the telephone, than a panel of experienced Appellate Judges who can listen to exactly the same thing via digital recording. The Court cannot have it both ways. Appeal Tribunal hearings should not be exempted from formal procedural and legal processes, and then be provided the same deference given to in-person testimony before a trained judge.

Claimant pro se: Giana M. Wilson.

Board of Review’s counsel: Arupa Barua, Deputy Attorney General, argued the cause for respondent Board of Review (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Donna Arons, Deputy Attorney General, on the brief).

Judges: Lihotz and Maven.