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New Jersey Court Invalidates Regulation Defining ‘Simple Misconduct’ Under Unemployment Law

Author: Michael J. Riccobono (Morristown)

Published Date: September 6, 2017

The Superior Court of New Jersey, Appellate Division, recently invalidated a regulation of the New Jersey Unemployment Compensation Act (UCA) that attempted to define, for the first time in codified form, the concept of “simple misconduct” by an employee that can limit his or her eligibility for unemployment benefits under the UCA. By way of background, the UCA (per N.J.A.C. 12:17-2.1, which was adopted in April 2015) established three “tiers” of misconduct to determine an employee’s eligibility for unemployment benefits: (1) gross misconduct; (2) severe misconduct; and (3) simple misconduct (defined as neither “severe misconduct” nor “gross misconduct” and which is an act of wanton or willful disregard of the employer’s interest, a deliberate violation of the employer’s rules, a disregard of standards of behavior that the employer has the right to expect of his or her employee, or negligence in such degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of the employer’s interest or of the employee’s duties and obligations to the employer).

The Appellate Division found that the regulation’s “simple misconduct” definition “confusingly mixes in concepts of ‘negligence’ with intent-based concepts such as ‘willful disregard,’ ‘evil design,’ ‘wrongful intent,’ and similar states of mind,” and invalidated the regulation as “arbitrary and capricious.” However, to avoid disruption in the statewide administration of the unemployment benefits program, the Appellate Division issued a stay of its decision for a 180-day period to enable the New Jersey Department of Labor and Workforce Development to take appropriate corrective action or, alternatively, pursue further review in the Supreme Court of New Jersey.

Michael J. Riccobono  (Morristown)

Michael J. Riccobono
Michael J. Riccobono is an employment litigator who regularly defends employers against single- and multi-plaintiff discrimination, harassment, whistleblower, retaliation, and non-competition/non-solicitation matters before both state and federal courts and government agencies. He has represented employers of all sizes and from a number of different industries, ranging from international Fortune 500 corporations to closely-held and family businesses, in the financial, pharmaceutical,...