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Gasparine v. Board of Review

A-5067-01T2 (N.J. Super. App. Div. 2004) (Unpublished)

UNEMPLOYMENT—Receipt of an early retirement package bars an employee from receiving unemployment benefits unless it is shown that the employee accepted the package because of a real, imminent, and substantial risk of losing the job.

A company was in the process of downsizing, relocating, and out-sourcing employees. It offered an employee an early retirement package and gave the employee two weeks to decide. Upon asking her boss whether she would have a job if she refused to accept the package, her boss advised her to accept the early retirement since neither a job nor a similar retirement package could be guaranteed in the future. She was not, however, specifically told that she would be fired. Because she could not risk losing the fully paid medical benefits offered with the package, and because she feared such benefits would be lost if she did not accept and was subsequently fired, she accepted the early retirement and voluntarily resigned.

The employee applied for and was granted unemployment benefits. However, it was later determined that she had left work voluntarily, without good cause, and she was then disqualified for benefits pursuant to N.J.S.A. 43:21-5a. Furthermore, she was required to return the money received.

She appealed the decision, and the Appeal Tribunal ruled against her. It believed that there was no threat that she would be denied benefits if she was later to be fired by her employer, and therefore her leaving was without good cause. Relying on applicable case law, the Tribunal held that an employee must base his or her “subjective fear” of being laid off, upon “definite objective facts.” Having presented no facts to support her belief that her job would actually be eliminated in the impending work reduction, the Tribunal would not rule in her favor. Case law holds that “an employee’s acceptance of a ‘severance package’ or ‘early retirement incentive package’ bars him from receiving unemployment benefits unless he shows that he accepted the package because of a real, imminent, and substantial risk of losing his job.” Therefore, being notified that a restructuring is about to take place and that positions are about to be lost, without being definitively told that the position was about to be eliminated, does not entitle an employee to collect unemployment benefits.

Similarly, other case law suggests that a claimant must establish with definitive objective facts, that he or she would “suffer a substantial loss by not accepting early retirement,’ in addition to “a well-grounded fear of imminent layoff.” The question is not whether an appellate court would come to the same conclusion as the original fact-finder, but whether there is credible evidence in the record to support the original decision. A holding can be overturned only if the original conclusion was “arbitrary, capricious, or unreasonable.” Applying this standard of review, the Appellate Division upheld the denial.


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