NJ Supreme Court gives workers further unemployment protection
On April 29, 2019, the New Jersey Supreme Court decided the consolidated cases of Patricia McClain v. Board of Review, Department of Labor and Cynthia Blake v. Board of Review, Department of Labor. 237 N.J. 445 (2019). Both appeals raised the question of whether a person who leaves one job to take a better job but, through no personal fault, is unable to start the second job, is precluded from unemployment benefits.
Under New Jersey’s Unemployment Compensation Law, a person who voluntarily leaves a job without good cause attributable to the work is disqualified from benefits. N.J.S.A. 43:21-5(a). For many years, the statute’s broad category of disqualifications for voluntary resignations unfairly penalized a particular group of unemployed workers: those who left one job to accept a better job (with better hours or pay) but became unemployed before working in the new job long enough to re-establish eligibility for unemployment benefits.
For example, consider a person who leaves a long-term job to take a higher-paying job but is let go, through no personal fault, a few weeks after starting the new job, and is then unable to access unemployment benefits because of voluntarily leaving the first job (the one under which eligibility for benefits were assessed), without good cause.
In an attempt to close that unfair “gap” in New Jersey’s unemployment system, in 2015, the Legislature carved out an exception to the “voluntary quit” disqualification for people in this precise situation. Under the amended statute, a person who leaves one job “to accept from another employer employment which commences not more than seven days after the individual leaves employment with the first employer” is no longer disqualified from benefits. In that case, even if the person loses the second job before working long enough to establish eligibility for unemployment benefits, he or she will still be eligible for benefits, despite having left the first job voluntarily.
The 2015 legislative amendment was a significant improvement to the unemployment statute, but it left open the question of what happens when a person leaves one job to take a better job but is unable (through no fault of their own) to start the second job. Both McClain and Blake presented this very scenario. In McClain, the claimant resigned from one teaching job to accept a better one that was to begin within the requisite seven-day period. The day after she resigned, however, the new job rescinded the offer because the position was no longer available. Similarly, in Blake, the claimant resigned her health care job to accept a better job that was to begin within seven days, but the new employer called days before the scheduled start date to rescind the offer. Now left without any employment, both McClain and Blake applied for unemployment benefits.
The Board of Review of the New Jersey Department of Labor held both claimants disqualified from benefits for voluntarily leaving the first jobs without good cause. The Board reasoned that the claimants did not meet the statute’s “commencement” requirement because they never actually started the new jobs. Both claimants, represented by South Jersey Legal Services, appealed to the Appellate Division. Surprisingly, in two published decisions, the Court issued two diametrically opposite opinions. The McClain panel held the claimant entitled to benefits, reasoning that it was the act of acceptance―not actual commencement―that determined entitlement to benefits under the amended statute. The Blake panel, on the other hand, held the claimant disqualified from benefits, reasoning that entitlement under the amended statute requires actual commencement, not just acceptance of the new job.
Upon further appeal, the New Jersey Supreme Court agreed with the Appellate Divisions’ analysis in McClain. The Court affirmed that it is the act of acceptance―not actual commencement―that determines entitlement to benefits under the amended statute. In reaching its decision, the Court pointed out the absurd result reached where one claimant, who is unable to start the new job through no fault of her own, is denied the safety net of unemployment benefits, while another, who is fired after one day on the new job, is deemed entitled to benefits. The Court’s analysis was guided by the remedial and humanitarian goals underlying the Unemployment Compensation Law. Its decision is a victory for New Jersey’s workers and furthers the Legislature’s goal of protecting those who become unemployed through no fault of their own.
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