Unemployment Benefits Cannot Be Denied After “Compelled Resignation”

The Appellate Division of the New Jersey Superior Court recently ruled in favor of a man who claimed his supervisor “forced” him to resign. The ruling, which overturned the decision of the Department of Labor denying benefits to the employee, is significant for the thousands of New Jerseyans who are seeking unemployment insurance benefits now or will be in the future.

This matter involved Mr. Talmage Lord, who was employed by a company to reset merchandise at retail stores in New Jersey and Pennsylvania. Mr. Lord’s job required that he use his own car to travel to different retail stores to perform his work. On June 3, 2009, Mr. Lord’s car broke down while he was driving and it had to be towed to a garage. Mr. Lord immediately informed his supervisor of his situation. The supervisor allowed Mr. Lord to take off of work the next day. Mr. Lord then learned that his transmission was shot. He could not afford the repair. Mr. Lord attempted to find alternative transportation to work, but he was unsuccessful. When Mr. Lord called his supervisor and told him that he was not sure if he would have a car on Monday, his supervisor told Mr. Lord that he had to resign effective immediately. Mr. Lord considered himself “terminated” and he filed for unemployment compensation that same day.

The Division of Unemployment Compensation denied Mr. Lord’s claim on the ground that he left his employment voluntarily and without good cause. The Appeal Tribunal agreed and stated in their opinion that “claimant left work because he was unable to obtain transportation to perform his job…[which was] a personal reason…not attributable to the work.” The Board of Review, the final level of appeal within the Division, affirmed this decision.

The Appellate Division reversed. The Court reasoned that a decision to leave employment is considered voluntary within the statutory framework only if the decision at the time lay with the worker alone. The Court stated that when Mr. Lord’s supervisor told him that he “had to resign” because he had no transportation, it was essentially the same as telling him, “you’re fired.” Mr. Lord did not choose to leave the employment on his own, his employer did it for him. Therefore, the Court concluded that Mr. Lord was entitled to unemployment insurance benefits.

We believe this is a very favorable decision for recently unemployed individuals as it sends a message to the DOL that, even in these times of governmental austerity, the law must be followed. We have seen far too many employees denied benefits improperly over the last two years. Kudos to Mr. Lord and his attorneys for pursuing this matter all the way to the Appellate Division, and congratulations on this victory.