UNEMPLOYMENT COMPENSATION – Disqualification – Strikes

Bustard v. Board of Review et al., A-5365-05T2; Appellate Division; opinion by Kestin, J.A.D. (retired and temporarily assigned on recall); decided and approved for publication July 15, 2008. Before Judges Stern, C.S. Fisher and Kestin. On appeal from the Board of Review, New Jersey Department of Labor and Workforce Development, Docket No. 59,754, et al. DDS No. 25-2-1105 [13 pp.]

The Board of Review decision finding claimants disqualified for benefits is vacated and the matter remanded for a determination whether, under the newly adopted N.J.S.A. 43:21-5(d)(2), the work cessation resulted from a strike or a lockout.

John Bustard is the first named of some 891 claimants, all members of System Council U-3, International Brotherhood of Electrical Workers, employed by Jersey Central Power & Light Company. Claimants appeal from a decision of the Board of Review finding them disqualified from unemployment compensation benefits from Dec. 8, 2004, through March 15, 2005.

The collective-bargaining agreement between the union and JCP&L expired on Oct. 31, 2004. The parties twice extended it, through Dec. 7, 2004. Beginning at 12:01 a.m. on Dec. 8, claimants rendered no services to JCP&L until the labor dispute was resolved as of March 16, 2005.

They sought unemployment compensation benefits for this period.

Their claims were administratively denied on the basis that, under N.J.S.A. 43:21-5(d), they had been “involved in a stoppage of work caused by a labor dispute,” an unconditional disqualifying factor if a finding was made that a work stoppage had occurred.

Claimants appealed. Two days before the second day of the three-day hearing before the Appeal Tribunal, an amendment to 43:21-5(d) was enacted, adding an exception to the work-stoppage disqualification: no disqualification would apply if the individual was prevented from working by the employer even though his majority representative had directed the employees in the bargaining unit to work under the pre-existing terms and conditions of employment and the employees had not engaged in a strike immediately before being prevented from working.

The entire first day of the hearing before the Appeal Tribunal was devoted to eliciting evidence regarding the effect of the cessation of work on the employer’s business and operations. The second and third days dealt extensively with the newly added focus of the amended statute: whether the employees had withheld their labor or whether the employer had refused to accept their services. Despite the extent to which the parties concentrated on that issue, the presiding appeals examiner gave it short shrift when he disposed of the issue in a single sentence: “as the union did not direct the claimants to continue to work during the labor dispute, relief from disqualification under 43:21-5(d)(2) does not apply.”

The Board of Review gave the issue scarcely more attention. It stated that the new amendment did not allow the claimants to escape disqualification since JCP&L did not prevent them from working and the union did not instruct them to work under the existing contract.

Held: The board’s finding that a work stoppage had occurred is affirmed, but the matter is remanded because the board inadequately considered the newly enacted “no disqualification” legal standard in N.J.S.A. 43:21-5(d)(2), a focal issue in the matter, as framed by the parties and presented in the evidentiary record.

The panel says the issue was not as elemental as depicted by the decision-makers. In light of the new statutory provisions, the board was required to give adequate consideration to whether the cessation of work resulted, actually or effectively, from the claimants’ refusal to provide their services, a “strike”; or from the employer’s refusal to accept those services, a “lockout.”

The record provides ample support for the board’s determination that a work stoppage had occurred and the conclusions that followed were logical and well-supported by the authorities cited. But the board’s decision is wanting in sufficient basis regarding the newly enacted “no disqualification” legal standard in 43:21-5(d)(2). The parties were entitled to a more evaluative and reflective consideration of their proofs than they received.

Both parties provided conflicting evidence whether another extension was possible and was discussed or whether each party took a “no-contract/no-work” stance. The board did not resolve this factual dispute, as it was required to do by reason of the newly enacted terms of the statute. Given the new statutory exception to the disqualification standard, it was essential that the board decide, on the basis of the evidence in the record, which of the parties was primarily responsible for the work stoppage. There was no legitimate basis for the board to omit deciding the critical issue as a question of first impression.

In addition, it is important that, as the relevant administrative agency, the board’s insights be articulated on the interpretation of the new statutory standard.

The panel affirms the portion of the board’s decision finding that a work stoppage occurred. The board’s disposition of the matter is vacated and the matter is remanded for further consideration in accordance with the standards in 43:21-5(d)(2).

- By Judith Nallin

For appellants – Cohen, Leder, Montalbano & Grossman (David Grossman on the brief). For respondents: Jersey Central Power & Light Co. – Genova, Burns & Vernoia (Francis J. Vernoia and Celia S. Bosco on the brief); Board of Review – Anne Milgram, Attorney General (Patrick DeAlmeida, Assistant Attorney General, of counsel; Ellen A. Reichart, Deputy Attorney General, on the brief).