New Jersey Employment Law: Involuntary Resignation Akin to Termination for Purposes of Unemployment Insurance
New Jersey employers should be aware of a recent New Jersey employment law decision, which clarified that telling an employee he must resign is essentially the same as firing him. Moreover, in these cases, the employee is not barred from collecting unemployment compensation.
The Facts of the Case
In Lord v. Board of Review, the petitioner/employee, Talmage Lord was told by his supervisor that he "had to resign" from his job "effective immediately," after informing the supervisor that car troubles would keep him from work. Lord testified that he did not want to leave his job, but felt he "had no choice." Since Lord considered himself to have been "terminated," he subsequently filed a claim for unemployment benefits. The Division of Unemployment Compensation denied his claim, finding he had left his employment voluntarily.
Under N.J.S.A. 43:21-5(a), an employee who "has left work voluntarily without good cause attributable to such work" is ineligible for unemployment compensation benefits. In this case, if Lord’s separation from employment were voluntary, he would be eligible for unemployment compensation benefits only if that separation was for "good cause attributable to the work."
The Court’s Decision
The Appellate Division found that Lord’s separation from his employment was not voluntary and, therefore, he was not disqualified from receiving unemployment compensation. The Court cited Campbell Soup v. Board of Review, 13 N.J. 431 (1953), in which the Supreme Court stated that leaving a job is voluntary only if "the decision whether to go or to stay lay at the time with the worker alone."
"The undisputed facts show that the decision that appellant 'had to resign' was [the supervisor’s] alone, and therefore, there was nothing 'voluntary' about appellant's separation from his employment," wrote Appellate Division Judge Stephen Skillman.
Skillman further noted, “If the supervisor had said, ‘you're fired,’ there would be no dispute that appellant's separation from employment was involuntary. There is no basis for reaching a different conclusion simply because the supervisor chose to tell appellant that he ‘had to resign.’ The import of the words was the same: the employer was discharging appellant because he could not give the supervisor assurance that he would have a car available to perform his job the following week.”
The Message for Employers
As this case highlights, employee terminations can result in costly lawsuits. Therefore, it is imperative to have policies and procedures in place to ensure that all terminations comply with existing state and federal employment laws. For advice, we recommend consulting with an experienced New Jersey employment attorney.