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New Jersey Court Finds the Board of Review Again Misapplies Severe Misconduct Standard

For the second time this year, the New Jersey Appellate Court has reverse and remanded a Board of Review decision disqualifying a claimant from receiving New Jersey unemployment benefits on the basis of severe misconduct. This is yet another reminder how necessary it is for the New Jersey legislature to enact a clear definition of what constitutes severe misconduct under New Jersey unemployment law.

In 2010, the New Jersey legislature created a new classification of misconduct called severe misconduct. Prior to 2010, there were only two types of misconduct, which were gross misconduct and misconduct (which was changed to simple misconduct with the enactment of severe misconduct). Gross misconduct occurs when an individual is terminated because they committed a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice. Simple misconduct occurs when an individual is terminated because he or she committed an act that is “improper, intentional, connected with one’s work, malicious, and within the individual’s control, and is either a deliberate violation of the employer’s rules or a disregard of standards of behavior which the employer has the right to expect of an employee.”

In creating the new classification, the legislature did not define “severe misconduct.” Instead, the 2010 amendment sets forth a list of examples of what constitutes severe misconduct, which includes the catch-all example, “where the behavior is malicious and deliberate but is not considered gross misconduct.” This “malicious and deliberate” catch-all example is, in fact, a lesser standard than the definition of simple misconduct, which has been the cause of the Department of Labor’s confusion and as to how to apply the law for over the last three years.

The issue was finally analyzed by the Appellate Division in the case Silver v. Board of Review, decided in March 2013. In that case, the Appellate Division found that the legislature intended for severe misconduct to include conduct more egregious than simple misconduct. The Appellate Division described the two-prong standard for misconduct as follows: “First, the conduct must be improper, intentional, connected with the work, malicious, and within the employee’s control. Second, the conduct must also be either a deliberate violation of the employer’s rules or a disregard of the standards of behavior which the employer as the right to expect.” Silver, supra, 430 N.J.Super. at 53.

Despite the guidance provided by the Appellate Division in Silver, the misinterpretation of severe misconduct continues.

In the case Tarnowski v. Board of Review, decided September 9, 2013, the Board of Review originally found the claimant disqualified to receive unemployment benefits without first applying the two-prong test set forth in Silver. The claimant in Tarnowski was terminated while he was on an emergency leave of absence from work as a result of receiving a call informing him that his cousin in South Carolina was on life support. The claimant had previous attendance problems, and alleged that he was unable to get in contact with anyone from his company for the week during his leave. The Board of Review found that, based upon these facts, the claimant had been terminated for severe misconduct. In reversing the Board of Review’s decision, the Appellate Division noted that the Board of Review did not consider the threshold issue of whether the claimant’s actions were intentional, malicious or deliberate. As a result, the decision was reverse and the case was remanded.

As we have previously mentioned in this employment law blog, there is a bill pending that would amend the New Jersey Unemployment law to include clear definitions for both simple misconduct and severe misconduct. Until this bill or a similar bill is passed, the Tarnowski decision reminds all claimants, employers and unemployment examiners to follow the standard articulated in Silver in determining whether a claimant was terminated for severe misconduct.