Quitting For Lack of Childcare May Not Disqualify Unemployment Benefits

Employers, for various reasons may choose to contest the eligibility of a former employee for unemployment benefits.  But beware, on March 29, 2018, the New Jersey Superior Court Appellate Division clarified that employees who voluntarily quit because of reasons related to childcare may not actually be disqualified for unemployment benefits in Cottman v. Bd. of Review, Dep’t Labor & Workforce Development and Quality Mgmt. Co.

Typically, if an employee voluntarily quits their job without good cause, they are disqualified from obtaining unemployment benefits.  However, in this case, Ms. Cottman’s babysitter unexpectedly quit right before she was due for her shift.  The employer’s policy required her to find a co-worker to cover her shift, but after contacting everyone on the list, no one was available.  She explained her situation to her supervisor, who warned her that she might be terminated if she did not show up for her shift, especially since she just finished her probationary period, and that she should not “play with her time.”  Ms. Cottman decided to resign from her employment.

When Ms. Cottman applied for unemployment benefits, she was denied for voluntarily leaving her job without good cause under statutory and regulatory law which expressly provided that childcare was not good cause for quitting.  Typically, if an employee voluntarily resigns, they are ineligible for unemployment benefits and voluntarily leaving for personal reasons does not fit within the good cause exception to ineligibility.

However, the Appellate Division recognized a competing principle: if an employee knows that they are about to be fired, they can resign instead without disqualifying themselves from unemployment.  These circumstances must be “so compelling as to indicate a strong probability that fears about the employee’s job security will in fact materialize, that serious impending threats to his or her job will be realized, and that the employee’s belief that his or her job is imminently threatened is well founded.”  The Appellate Division determined that the agency overlooked this crucial fact – that Ms. Cottman told her supervisor of the position she was in, and the supervisor warned her that she might be terminated if she did not appear for her shift, that she just finished her probationary period, and that she should not “play with her time.”

The Appellate Division also focused on another section of the unemployment benefits statute – that if an employee is terminated for an unauthorized absence from work, good cause for the absence includes personal circumstances and would permit unemployment benefits.  Therefore, had Ms. Cottman let the termination occur as she was warned it likely would anyway, she would have been eligible for unemployment benefits, but because she resigned instead to avoid having a termination on her employment history, she was suddenly disqualified.  The Appellate Division indicated that it simply could not uphold such a result.  Therefore, it overturned the Board of Review and determined that Ms. Cottman was eligible for unemployment benefits.

Given the above, under these circumstances, when faced with the threat of termination, childcare may constitute good cause for voluntarily resignation, and the employee may be eligible for unemployment benefits.

If you have a former employee claiming unemployment benefits, and you have questions about the process or you are unsure of whether to contest their eligibility, please contact Ashley M. LeBrun, Esquire at alebrun@archerlaw.com or any other member of Archer & Greiner’s Labor & Employment Group in Haddonfield, N.J., at (856) 795-2121, in Princeton, N.J., at (609) 580-3700, in Hackensack, N.J., at (201) 342-6000, in Philadelphia, Pa., at (215) 963-3300, or in Wilmington, Del., at (302) 777-4350.