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Superior Court of New Jersey, Appellate Division.


DOCKET NO. A–1050–12T2

    Decided: April 04, 2014

Before Judges Harris and Guadagno.Matthew J. Bozek, appellant pro se. John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review (Lewis A. Scheindlin, Assistant Attorney General, of counsel;  Arupa Barua, Deputy Attorney General, on the brief).   Respondent Morgan Stanley & Co., Inc., has not filed a brief.

Claimant Matthew J. Bozek appeals from a final decision of the Board of Review (Board) denying his claim for disability during unemployment (DDU) benefits and finding him liable to refund benefits paid totaling $5,382.   We affirm.

Bozek was employed by Morgan Stanley & Co. Inc.1 from July 2006 until May 24, 2010, when he was terminated.   Bozek remained on the Morgan Stanley payroll after his termination and continued to receive wages and benefits until June 25, 2010.   Following his separation, Bozek received sixty days of severance pay from Morgan Stanley totaling $23,013.

Bozek filed a claim for unemployment benefits on June 27, 2010, and received a weekly payment of $600 for twenty-six weeks until the maximum benefit amount of $15,600 was received.

In September 2011, Bozek underwent shoulder surgery and filed a claim for temporary DDU benefits on September 4, 2011.   See N.J.S.A. 43:21–4(f).  Bozek received a weekly payment of $598 from September 10, 2011, through November 5, 2011, totaling $5,382.

On November 30, 2011, a Notice of Invalid Determination was sent to Bozek advising him that his claim had been redetermined to be invalid.   Subsequently, a demand for return of improperly paid benefits was made pursuant to N.J.S.A. 43:21–55 and Bozek was asked to return $5,382.

Bozek appealed these determinations and a hearing was held before an Appeal Tribunal.   The appeals examiner affirmed the determination of ineligibility and the demand for return of benefits.   Bozek appealed and the Board affirmed the decision of the appeals examiner.

On appeal, Bozek argues:

failure by board to include severance payments made as required by federal law (warn) as wages for unemployment in quarter ending september 30, 2010 is inconsistent with precedents under new jersey law.

failure to provide notice to claimant of mitigation of liability required under N.J.S.A. 43:21–55.1(b) prohibits collection of overpayments.

under N.J.S.A. 43:21–55.1(b) overpayments made solely as a result of agency error are only subject to [partial] recovery.

The unemployment compensation law requires that a claimant be available to work in order to qualify for benefits.  N.J.S.A. 43:21–4(c).  However, the statute makes an exception for persons who become disabled and unable to work while they are receiving unemployment benefits.  Ibid.;  N.J.S.A. 43:21–4(f).  This exception requires that, apart from the disability, the person must be otherwise eligible for unemployment benefits:

The individual has suffered any accident or sickness not compensable under the workers' compensation law, ․ and resulting in the individual's total disability to perform any work for remuneration, and would be eligible to receive benefits under this chapter ․ except for the inability to work and has furnished notice and proof of claim to the division, in accordance with its rules and regulations, and payment is not precluded by the provisions of R.S. 43:21–3(d);  provided, however, that benefits paid under this subsection (f) shall be computed on the basis of only those base year wages earned by the claimant as a “covered individual,” as defined in [N.J.S.A. 43:21–27].

[N.J.S.A. 43:21–4(f).]

The temporary disability benefits law was enacted to fill a gap in protection for unemployed workers.  Butler v. Bakelite Co., 32 N.J. 154, 160–61 (1960).   To qualify for benefits under that law, a person must be unable to work due to a disability but must also meet the eligibility requirements for receiving unemployment benefits.  Ibid. The Board concedes that Bozek satisfied the base period earnings requirement.   However, Bozek filed a successive benefit claim upon expiration of the initial benefit year, and was required to satisfy the relevant eligibility requirements found in N.J.S.A. 43:21–4(e)(6):

The individual applying for benefits in any successive benefit year has earned at least six times his previous weekly benefit amount and has had four weeks of employment since the beginning of the immediately preceding benefit year.   This provision shall be in addition to the earnings requirements specified in paragraph (4) or (5) of this subsection, as applicable.

Although Bozek failed to obtain employment since filing his initial benefits claim on June 27, 2010, he argues that the severance pay received from Morgan Stanley after his separation should count as wages earned during the second benefit year within the meaning of N.J.S.A. 43:21–4(e)(6).   We disagree.

Bozek relies on our decision in Dingleberry v. Board of Review, 154 N.J.Super.   415 (App.Div.1977), reversing a determination by the Board that held appellant's severance pay did not count toward her earned wages.  Id. at 417–19.   In Dingleberry, an employee was denied unemployment benefits after it was determined that she had not worked a sufficient number of base weeks or earned sufficient wages in the base year to be eligible for benefits.  Id. at 417–19.   We determined that severance pay should be treated as monies “earned” either during the employee's base year or during her ten prior years of service.  Id. at 418.

We find the holding in Dingleberry distinguishable.  “[S]everance pay, has often been said to be in the nature of deferred compensation, in lieu of wages, earned in part each week the employee works, and payable at some later time.”   Id. at 419.   Any severance pay “earned” by Bozek was for his past services, which were terminated on May 24, 2010.   We find no merit in Bozek's claim that the severance pay he received constituted earnings “for the quarter ending September 30, 2010[.]”  Bozek was disqualified from benefits for failure to work at least four weeks since establishing his claim on June 27, 2010.

“Unemployment benefits are not allowable unless the claimant meets the conditions for ‘eligibility’ provided in [N.J.S.A.] 43:21–4.”  Krauss v. A. & M. Karagheusian Inc., 13 N.J. 447, 454–55 (1953).   We conclude that the Board correctly determined that Bozek failed to fulfill the requirements to establish eligibility for DDU benefits.   We are satisfied that the Board's decision is based upon “sufficient credible competent evidence in the record,” and, therefore, we must uphold that decision.   See Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 587 (1988).



FN1. In 2009, Morgan Stanley & Co., Inc. acquired Smith Barney and the joint venture became known as Morgan Stanley Smith Barney, LLC. We refer to the entities collectively as Morgan Stanley..  FN1. In 2009, Morgan Stanley & Co., Inc. acquired Smith Barney and the joint venture became known as Morgan Stanley Smith Barney, LLC. We refer to the entities collectively as Morgan Stanley.


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