Opinion
DOCKET NO. A-2091-12T4 DOCKET NO. A-3101-12T4 DOCKET NO. A-3102-12T4 DOCKET NO. A-3103-12T4 DOCKET NO. A-3121-12T4 DOCKET NO. A-3175-12T4 DOCKET NO. A-3286-12T4
04-27-2015
DOLORES SINCLAIR, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents. SHAWNDA A. JACOBS, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents. VINCENT H. FEDOR, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents. JOANNE KNIGHT, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents. GLORIA HOWARD, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents. LINDA M. VEVERKA CALIENNI, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents. ROSEMARIE KAUFELER, Appellant, v. BOARD OF REVIEW and BAYONNE MEDICAL CENTER, Respondents.
Michael A. Bukosky argued the cause for appellants (Loccke Correia Limsky & Bukosky, attorneys; Leon B. Savetsky, of counsel and on the brief). Christopher M. Kurek, 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; Mr. Kurek, on the brief). Clifton Budd & DeMaria, LLP, attorneys for respondent Bayonne Medical Center (Scott M. Wich, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Reisner and Haas. On appeal from the Board of Review, Department of Labor, Docket Nos. 223,025; 223,023; 223,029; 223,024; 223,028; 223,026; and 223,030. Michael A. Bukosky argued the cause for appellants (Loccke Correia Limsky & Bukosky, attorneys; Leon B. Savetsky, of counsel and on the brief). Christopher M. Kurek, 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; Mr. Kurek, on the brief). Clifton Budd & DeMaria, LLP, attorneys for respondent Bayonne Medical Center (Scott M. Wich, on the brief). PER CURIAM
In these seven consolidated matters, appellants appeal from the November 27, 2012 decisions of the Board of Review (Board), finding them liable to refund the unemployment compensation benefits they each received for various periods between May and August 2008. We affirm.
In April 2008, appellants' employer, Bayonne Medical Center (the hospital), laid off twenty-five employees, including the seven appellants. Pursuant to the union contract in effect at that time, each appellant was entitled to severance pay, which was equal to one week's salary for each year the individual was employed. Appellants began collecting their severance pay, and also filed claims for unemployment benefits, which were granted.
Appellants' union filed a grievance against the hospital, alleging that the layoffs were not conducted in accordance with the provisions of the contract, and the matter was submitted to an arbitrator. On July 24, 2008, the hospital and the union entered into a consent award, under which the hospital agreed to restore all twenty-five employees to their former positions. According to the hospital's vice-president of human resources, the purpose of the agreement was to make the employees "whole" by returning all of their terminal benefits. Thus, each employee had his or her seniority status restored, together with any unpaid and unused paid time off, extended illness benefits, holiday and sick time, and any other benefits the employees would have accrued during the period of their layoff.
In addition, because the employees had been restored to employment, and their "severances" rescinded, the agreement specifically required the employees to repay all of the unemployment benefits they received during the layoff. The vice-president of human resources testified that, at the time of the agreement, the hospital believed it was "self-funded with our unemployment insurance" and, therefore, the agreement required the employees to repay these benefits directly to the hospital. The consent award permitted the employees to repay the benefits in a lump sum, or through payroll deductions.
Appellants were the only employees who decided to return to their former positions. Five of the appellants had not exhausted their severance pay by the time they resumed work. Two appellants had exhausted their severance pay by that time. Thus, to make everyone "whole," the hospital agreed in the consent award to pay these two appellants "100% back pay" for any period of time for which they had not already been paid. Therefore, all seven appellants were fully compensated for the time they were out of work.
The vice-president of human resources testified that, because the employees were returned to their former positions, with a complete restoration of their seniority and other benefits, the "severance pay" appellants received after they were laid off became "back pay." The union representative who appeared at the Appeal Tribunal hearing disputed that appellants received any "back pay." However, he conceded that "severance pay" was an issue covered by the union's contract with the hospital and that employees, including appellants, would be eligible to receive severance pay in the future in accordance with the terms of the contract in effect at that time. He also conceded that the consent award required the appellants to repay the unemployment benefits they received.
After going through a bankruptcy proceeding, ownership of the hospital changed hands and the new management team learned that it was not self-funded for unemployment compensation. The vice-president of human resources then contacted the Division of Unemployment Insurance (the Division) to report that the consent award had been entered and that appellants had agreed to repay the unemployment benefits they received. A Division investigator testified that, because all seven appellants had been returned to their former positions with full back pay and benefits for the period of the layoff, they were not eligible for unemployment benefits and had to return them. The Division sent each appellant a written notice setting forth the amount each appellant was required to return.
Appellants appealed these determinations to the Appeal Tribunal, which held a hearing on May 11, 2010. In its May 19, 2010 decisions, the Appeal Tribunal found appellants eligible for benefits because the consent award did not specifically state that the severance pay had been converted to back pay. Based upon this conclusion, the Appeal Tribunal ruled that appellants did not have to repay the unemployment benefits they received, despite their agreement to do so in the consent award.
The Bureau of Benefit Payment Control (the Bureau) appealed this determination to the Board. The Bureau stated:
We believe that [appellants] were "made whole" by virtually being restored and/or reinstated to their jobs with their seniority, bumping rights, healthcare and accrued vacation time. We also believe that for accounting convenience, the severance pay originally paid to [appellants] were offset by their back wages when they were all restored to their respective job[s].The Bureau relied upon N.J.S.A. 43:21-5(b) which, in pertinent part, states:
In the event the discharge should be rescinded by the employer voluntarily or as a result of mediation or arbitration, . . . an individual who is restored to employment with back pay shall return any benefits received . . . for any week of unemployment for which the individual is subsequently compensated by the employer.
On November 16, 2010, the Board remanded all seven cases to the Appeal Tribunal "for additional testimony from [appellants] and the employer as to whether or not [appellants] reimbursed the employer for the unemployment benefits received during the period they received other compensation as a result of their settlement agreement." With particular significance to the present appeals, the Board also ordered "that a copy of any new Decision or Order resulting from this remand shall, immediately upon issuance, be transmitted to the Executive Secretary of the Board of Review."
On remand, the Appeal Tribunal conducted hearings on May 16 and 17, 2011. On June 17, 2011, the Appeal Tribunal issued decisions, finding that the five appellants who had not exhausted their severance payments prior to their return to employment were eligible for benefits and, therefore, not required to refund them to the Division. However, on June 21, 2011, the Appeal Tribunal ruled that the other two appellants, who had exhausted their severance pay prior to their return to work, but who, like the other five appellants, were still fully compensated for the entire time they were out of work under the terms of the consent award, were not eligible for benefits and, therefore, required to refund all the unemployment benefits they received.
As noted above, the Board's November 26, 2010 remand order specifically provided that the entire case was to be returned to it upon completion of the Appeal Tribunal proceeding. Nevertheless, the two appellants who were found ineligible for benefits filed written appeals to the Board. Neither the Bureau or the hospital filed appeals concerning the five other appellants.
In March 27, 2012 decisions, the Board again remanded the entire matter to the Appeal Tribunal, stating:
Because we believe that all these cases should be decided in the same manner, we
have requested the Appeal Tribunal to reopen [all seven cases] for the matter of conformity.
The Board is satisfied that all seven cases should be decided in the same fashion, in that the issue is not so much whether the severance pay all the [appellants] received was back pay, but who is to reimburse the department for the unemployment benefits that were paid, the [appellants] or the employer.
The matter is remanded to the Appeal Tribunal for a new hearing and decision.
On remand, the Appeal Tribunal conducted additional hearings on March 28, 2012, and May 3, 2012. The Appeal Tribunal then issued decisions finding all seven appellants ineligible for benefits. The Appeal Tribunal reasoned that appellants were fully compensated by the hospital for the time they were out of work; the payments they received constituted "back pay" within the intendment of N.J.S.A. 43:21-5(b); and appellants were required to refund the benefits they received during the period of time they were out of work.
All seven appellants appealed this determination to the Board. The five appellants who the Appeal Tribunal had held were eligible for benefits in its June 2011 decisions, argued that the Board lacked jurisdiction to consider their cases because neither the Bureau nor the hospital had appealed the June 2011 decisions to the Board. They asserted that, because there was no appeal, the Appeal Tribunal's decisions finding them eligible became the agency's final decisions in their cases.
In its November 27, 2012 decisions, the Board rejected this contention and affirmed the Appeal Tribunal's determination that none of the appellants were eligible for benefits and that all were required to refund the benefits they received because the hospital fully compensated them for the time they were out of work. In rejecting the five appellants' jurisdictional argument, the Board stated:
While the two [appellants] adversely affected by the Appeal Tribunal's [June 2011] decision had appealed promptly, a crushing workload caused by economic conditions prevented the Board from reviewing the matter until early in 2012. Because the matter had been before us on a prior occasion as a mass hearing, we examined all seven decisions and found them all to be woefully deficient. The provisions of the consent award were not examined carefully and no legal precedent was cited. Consequently, on March 20, 2012, the Board sent a memorandum to the appeals examiner requesting that he reopen the five cases that had not been appealed, citing lack of uniformity and failure to consider precedent. What followed was a reopening of those five cases by the appeals examiner as of March 13, 2012 and a remand of the two other cases on March 29, 2012 by the Board for uniform Appeal Tribunal decisions. The upshot was that after further hearings, the Appeal Tribunal held all of the [appellants] liable to refund.
The point to be made here is that the Board of Review did not reopen any case; what occurred was a reopening by the appeals examiner. And the authority of administrative bodies to reopen cases in appropriate circumstances is well established . . . . Consequently, the Board of Review has jurisdiction to rule on all seven cases involved in this mass appeal.
In concluding that all seven appellants were liable to refund the benefits they received, the Board stated:
The starting point of any analysis of these cases must be the consent award. With respect to the seven [appellants], this document sought to achieve two objects, the first of which was to make the [appellants] whole for their lost wages. How was this accomplished?
It seems clear that the method designed to ensure that the claimants were compensated for the time they were out of work was by allowing them to retain the separation pay they received. The problem with this arrangement was that two of the [appellants] did not qualify for sufficient separation pay to cover the wages lost. This difficulty was remedied by the employer making payments to these two [appellants] to cover the shortfall. Thus, it can be seen that the consent award effectively transformed the separation pay into the lost wages, that is, into back pay.
The second aim of the settlement was to reimburse the Division for the unemployment benefits paid the [appellants]. Who was to be responsible for the repayment? In no uncertain terms[,] the consent award placed that obligation squarely on the [appellants]. The original scheme was that the [appellants] would satisfy that duty by passing on the money to the employer, either
by payroll deduction or direct payments. The employer would then reimburse the Division. This plan was upended by the change in the employer's ownership which resulted in the employer no longer able to act as a conduit for reimbursement.This appeal followed.
With the employer no longer available to pay the Division, the [appellants] seek to abrogate the consent award, to retain both their separation pay and the unemployment benefits they promised to give back to the [S]tate. We say that this is unjust. The [appellants] may not have their cake and eat it too. The [appellants] received back pay and pursuant to N.J.S.A. 43:21-5(b), they are liable to refund the unemployment benefits received.
On appeal, the seven appellants do not contest the Board's holding that, under the circumstances of this case, the severance payments they received were the equivalent of a back pay award under N.J.S.A. 43:21-5(b). Instead, the five appellants who the Appeal Tribunal found eligible for benefits in its June 2011 decisions continue to argue that the Board lacked the jurisdiction to review those decisions. These appellants point to N.J.S.A. 43:21-6(c), which states that a decision of the Appeal Tribunal "shall be deemed to be the final decision of the [Board], unless further appeal is initiated . . . within 20 days after the date of notification or mailing of such decision. . . ." Because neither the Bureau nor the hospital filed a timely appeal to the Board from the June 2011 decisions, the five appellants contend the Appeal Tribunal's decisions in their cases became the final agency decisions and, therefore, they are not liable to return any of the benefits they received. We disagree.
In its initial order of November 16, 2010, the Board remanded all seven cases to the Appeal Tribunal for a new hearing and decision. However, the Board retained jurisdiction of the entire matter and specifically ordered "that a copy of any new Decision or Order resulting from this remand shall immediately upon issuance, be transmitted to the Executive Secretary of the Board of Review." Thus, the Board made clear that, once the Appeal Tribunal issued its new decisions, the entire matter was to be returned to the Board for further review.
This remand order and the Board's decision to retain jurisdiction pending the completion of the proceedings before the Appeal Tribunal, were specifically authorized by N.J.A.C. 1:12-14.3(c), which states:
The Board of Review, in its discretion, may remand any claim or any issue involved in a claim to an appeal tribunal for the taking of such additional evidence as the Board of Review may deem necessary. Such testimony shall be taken by the appeal tribunal in the manner prescribed for the conduct of hearings on appeals before appeal tribunals. Upon the completion of the taking of evidence by an appeal tribunal
pursuant to the direction of the Board of Review, the claim or the issue involved in such claim shall be returned to the Board of Review for its decision upon the entire record, including the evidence before the appeal tribunal and such additional evidence and such oral argument as the Board of Review may permit before it.Thus, pursuant to N.J.A.C. 1:12-14.3(c), no appeal by any party was necessary to bring the entire matter back to the Board for its consideration. Instead, the Appeal Tribunal was to immediately notify the Board of its new decisions so that the Board could review them. This is exactly what occurred in this case. Therefore, the jurisdictional arguments presented by the five appellants must be rejected.
Appellants next argue that, in its March 27, 2012 decisions, the Board improperly told the Appeal Tribunal "that all seven cases should be decided in the same fashion. . . ." We again disagree. All of the appellants were similarly situated. Pursuant to the terms of the consent award, the hospital fully compensated each of them, and restored all of their employment benefits. All seven agreed to repay the unemployment benefits they received. Yet, the Appeal Tribunal found that only two of the appellants were ineligible for benefits and required to refund them.
Contrary to appellants' contention, the Board did not order the Appeal Tribunal to reach a specific decision in these cases. Instead, the Board merely stated that whatever decision the Appeal Tribunal reached should be consistent in all of the matters because all seven appellants were similarly situated. Under these circumstances, we discern no impropriety in the Board's direction to the Appeal Tribunal.
Finally, the two appellants, who exhausted their severance pay prior to being reinstated to their jobs under the consent award, argue that they should have been able to retain the unemployment benefits they received for the period of time they were receiving the severance payments. This argument lacks merit.
As the Board found, all seven appellants, including the two involved here, received full back pay for the entire period of time they were out of work. There is ample evidence in the record, including the testimony of the hospital's vice-president of human resources, and the express language of the consent award, to support the Board's determination that, because they were restored to employment and paid for the entire period they were out of work, all seven appellants were required to honor their agreement to return the unemployment benefits they received. N.J.S.A. 43:21-5(b); see Brady v. Bd. of Review, 152 N.J. 197, 210-11 (1997) (noting that we are obliged to defer to a Board decision that is based upon an accurate view of the facts, is legally correct, and bears no indicia of arbitrariness, caprice, or unreasonableness).
Appellants are not prohibited from seeking a "waiver of recovery of benefit overpayment" pursuant to N.J.A.C. 12:17-14.2. However, we express no view as to the merits of any such application.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION