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Employees Can Be Eligible For Unemployment When An Employer Changes the Conditions of Employment

New Jersey’s Unemployment Compensation Law provides financial assistance to eligible workers suffering the distress and dislocation caused by unemployment.  This law, also known as the Workers Compensation Act, was created to provide some income for the worker earning nothing, because he or she is out of work due to no fault or act of his/her own. However, under this law, a person is disqualified for benefits if the individual has left work voluntarily without good cause attributable to such work. This is important for both employers and employees to know. 

Early this year, a New Jersey Appellate Court agreed that an employee who claimed that her employer changed her conditions of work, which forced  her to resign, was entitled to unemployment benefits. In that case, called Damiano v. Board of Review, the employer challenged a New Jersey Department of Labor decision granting the unemployment benefits. She worked as a part-time attorney at a law office for several years before she was told by her employer that part-time positions were being “phased out.” She was offered a full-time position instead. The employee told her boss that she felt pressured to make a decision, because she was offered a full-time position despite the boss knowing that her childcare arrangements would not allow her to accept it.  

After going out on maternity leave and getting temporary disability benefits, as well as additional bonding time benefits, the young lawyer told the boss that she was resigning because her part-time position was eliminated and so she considered herself terminated. She then applied for unemployment benefits.

The employer claimed that she left voluntarily and without good cause attributable to the work. At the first hearing level, a decision was made disqualifying her for benefits.  It was found that her employer was not only flexible and understanding to initially allow her to work on a part-time basis due to her personal circumstances, but that the decision to have her return to work as a full-time lawyer was understandable, because of the business needs of the law firm.  Finally, the decision said that her rejection of the full-time position was due to “personal reasons” and not related to the working conditions.   

An appeal to the next level produced a decision in the young lawyer’s favor. The   employer then appealed and the Appellate Court held that because she was working part-time when the employer unilaterally changed the conditions of her employment by eliminating her part-time position and offering her a full-time position that she could not fulfill, her reasons for resigning were “entirely plausible.” The higher court considered the fact that she had three young children in her care and that the catalyst for her departure was actually the permanent elimination of her part-time position. 

In New Jersey, people who file for unemployment bear the burden of proof to show their right to the benefits. So an employee who leaves work voluntarily has to show that he or she did so with good cause attributable to work. Also, a person who leaves work for several reasons, one of which constitutes good cause attributable to such work, will not be disqualified for benefits. The test is one of “ordinary common sense and prudence and the decision to leave must be compelled by real, substantial and reasonable circumstances, not imaginary, trifling and whimsical ones.” Also, the employee must do what is necessary and reasonable to remain employed. 

In situations such as this, an employee may still be eligible for unemployment benefits after separation from his/her employer even if he/she voluntarily resigns if the decision constitutes good cause attributable to work.  This includes when an employer changes the conditions of an employee’s employment and forcing them to resign. Every case has different facts, but both employers and employees need to be very careful with decisions that lead to someone leaving their job, voluntarily or otherwise. 

Sadayah Q. DuRant is a recent graduate of Rutgers School of Law, where she was Editor of the Race and The Law Review Journal. We are pleased to introduce her as a new contributor. 

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