NJ Supreme Court Finds Workers Are Entitled To Unemployment Benefits

On April 29, 2019, the New Jersey Supreme Court in an opinion by Justice Albin, issued a decision in the matters of McClain v. Board of Review, and Blake v. Board of Review, finding that workers who voluntarily leave prior employment, are entitled to unemployment benefits upon accepting a subsequent position that is later rescinded, even without having actually started working in the subsequent position.

New Jersey’s Unemployment Compensation Law (UCL) generally requires that an employee who voluntarily leaves work without good cause, may only qualify for unemployment insurance (“UI”) benefits after working a certain number of weeks for a subsequent employer. However, the legislature in 2015 amended the law under N.J.S.A. 43:21-5(a), to address inequalities that arise in the circumstances when a longtime employee voluntarily leaves prior employment, to join another employer, but subsequently loses employment shortly after.

The amended language of the 2015 amendment therefore allows an employee to receive UI benefits even if she has not accrued sufficient time to normally qualify for benefits if she “voluntarily leaves work with one employer to accept from another employer employment which commences not more than seven days after the individual leaves employment with the first employer.”

Unfortunately, the employees in McClain and Blake faced circumstances where they did not even qualify for these amended conditions of qualification. In both McClain, and Blake, the employees in question had voluntarily left their prior employment and accepted an offer of employment from a second employer, only to later find that the offer was rescinded before the start date, due to no fault of their own.

In considering these cases, separate panels of the Appellate Division produced opposite findings. One panel in the McClain matter concluded that the acceptance of an offer of employment to commence within seven days after leaving the first employer triggered the unemployment insurance benefit protections, while another panel in Blake, concluded that the employee must actually begin working for the second employer within a seven-day period to be entitled to unemployment insurance benefits.

In re-evaluating, the Supreme Court found that the plain language of the statute could lead to two plausible interpretations: (1) that there was a requirement that an employee accept an offer of employment that was scheduled to commence not more than seven days after leaving employment with the first employer, or (2) that there was a requirement that an employee offer of employment which actually commences not more than seven days after leaving employment with the first employer. The Court further found that legislative history as to the amendment was also inconclusive as to the issue.

The Supreme Court eventually sided with the McClain panel’s decision, noting that the McClain panel’s decision was consistent with the remedial purposes of the UCL which was to be construed liberally in favor of allowance of benefits. The Court further disregarded the Blake panel’s concerns that such a ruling could allow an employee to potentially feign a rescinded offer to qualify for UI benefits, finding that such concerns would be revealed by an adversarial party, or by the inquiries of the Deputy Director of Unemployment Insurance, in the event such an issue would come into question.

Although these particular circumstances faced by McClain and Blake may be rare, it emphasizes that New Jersey’s unemployment insurance benefits are the result of remedial social legislation, and any such ambiguities that may arise while applying these laws will often be construed liberally in favor of allowance of benefits.