BAHIG TAWFELLOS VS. BOARD OF REVIEW (DEPARTMENT OF LABOR)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1837-19
BAHIG TAWFELLOS,
Appellant,
v.
BOARD OF REVIEW,
DEPARTMENT OF LABOR,
and HONEYWELL
INTERNATIONAL, INC.,
Respondents.
__________________________
Submitted June 8, 2021 – Decided June 30, 2021
Before Judges Yannotti, Haas, and Mawla.
On appeal from the Board of Review, Department of
Labor, Docket No. 187,577.
Bahig Tawfellos, appellant pro se.
Gurbir S. Grewal, Attorney General, attorney for
respondent Board of Review (Donna Arons, Assistant
Attorney General, of counsel; Christopher J. Hamner,
Deputy Attorney General, on the brief).
PER CURIAM
Bahig Tawfellos appeals from a final determination of the Board of
Review (Board), which upheld the reduction of his unemployment compensation
benefits from $696 to sixty dollars per week, pursuant to N.J.S.A. 43:21-5a and
N.J.A.C. 12:17-8.2. We affirm.
I.
We briefly summarize the pertinent facts and procedural history. On
January 3, 2019, Honeywell International, Inc. (Honeywell) terminated
Tawfellos from his position as staff engineer. He was sixty-five years old at the
time. On June 9, 2019, Tawfellos filed a claim for unemployment benefits,
which established a weekly benefit rate of $696, based on his earnings at
Honeywell. On July 1, 2019, he began to receive a pension in the amount of
$2,754.46 per month.
By notice mailed on July 10, 2019, the Director of Unemployment
Insurance in the State's Department of Labor and Workforce Development
(DOL) informed Tawfellos that he was eligible for benefits as of July 7, 2019,
but his weekly benefit rate was being reduced to sixty dollars pursuant to
N.J.S.A. 43:21-5a because "the employer on which [his] claim is based was the
sole contributor to [his] pension." The notice stated that the benefits were being
reduced by the full amount of his weekly pension payment.
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Tawfellos appealed the Director's decision to the Appeal Tribunal. He
asserted, among other contentions, that the statute unfairly discriminates against
individuals who collect a pension in periodic payments rather than a lump sum.
He stated that not every individual who receives a pension has the option to
receive a lump sum payment rather than periodic payments, and that persons
who are entitled to periodic pension payments could delay receiving those
payments until the unemployment benefits have been exhausted.
On October 7, 2019, Tawfellos appeared for a hearing before the Appeal
Tribunal. He testified that his objection to the reduction of benefits was based
on the law, which he believed to be discriminatory. He did not call any
witnesses. On October 8, 2019, the Appeals Examiner issued a written decision
finding that the reduction in benefits was required by N.J.S.A. 43:21-5a and
N.J.A.C. 12:17-8.2.
Tawfellos appealed the decision of the Appeal Tribunal to the Board. He
asserted that he was "baffled" because the law was unfair, and he did not
understand the "rationale behind its existence." He stated that he had been trying
to learn the reason for the law's existence and he had made inquiries to his local
legislators, who advised him to contact his representative in the United States
Congress. He said he had done so, but the staff for his representative had been
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unable to provide any answers. He asserted that if the DOL is enforcing the law,
it should be able to provide the rationale for its "existence."
The Board issued a final decision on November 21, 2019. The Board
found that the Appeal Tribunal had provided Tawfellos a full and impartial
hearing, and he had been provided the opportunity to present all relevant
evidence. The Board affirmed the Appeal Tribunal's decision. This appeal
followed.
II.
On appeal, Tawfellos argues that the Board's final decision should be
reversed. He apparently recognizes that N.J.S.A. 43:21-5a applies to him. He
argues, however, that the statute is discriminatory and unconstitutional. We
disagree.
The scope of our review of a final decision of an administrative agency is
strictly limited. In re Carter, 191 N.J. 474, 482 (2007). We will reverse an
agency's decision only if it is arbitrary, capricious, or unreasonable. In re
Proposed Quest Acad. Charter Sch. of Montclair Founders Grp., 216 N.J. 370,
385 (2013). Therefore, our review of an agency's decision is limited to
considering
(1) whether the agency's action violates express or
implied legislative policies, that is, did the agency
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follow the law; (2) whether the record contains
substantial evidence to support the findings on which
the agency based its action; and (3) whether in applying
the legislative policies to the facts, the agency clearly
erred in reaching a conclusion that could not reasonably
have been made on a showing of the relevant factors.
[Id. at 385-86 (quoting Mazza v. Bd. of Trs., 143 N.J.
22, 25 (1995)).]
We must affirm an agency's findings of fact if "supported by adequate,
substantial and credible evidence . . . ." In re Taylor, 158 N.J. 644, 656-57
(quoting Rova Farms Resort, Inc. v. Inv.'s Ins. Co. of Am., 65 N.J. 474, 484
(1974)). We also must "give due deference to the view of those charged with
the responsibility of implementing legislative programs." In re Reallocation of
Prob. Officer, 441 N.J. Super. 434, 444 (App. Div. 2015) (quoting In re N.J.
Pinelands Comm'n Resol. PC4-00-89, 356 N.J. Super. 363, 372 (App. Div.
2003)).
Here, the Appeal Tribunal and the Board found that Tawfellos's
unemployment benefits must be reduced pursuant to N.J.S.A. 43:21-5a and
N.J.A.C. 12:17-8.2. The statute provides in pertinent part:
the amount of benefits payable to an individual for any
week which begins in a period with respect to which
such individual is receiving a governmental or other
pension, retirement or retired pay, annuity, or other
similar periodic payment which is based on the
previous work of such individual shall be reduced, but
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not below zero, by an amount equal to the amount of
such pension, retirement or retired pay, annuity, or
other payment, which is reasonably attributable to such
week; provided that such reduced weekly benefit rate
shall be computed to the next lower multiple of [one
dollar] if not already a multiple thereof and that any
such reduction in the weekly benefit rate shall reduce
the maximum total benefits of the individual during the
benefit year . . . .
[N.J.S.A. 43:21-5a.]
In addition, the regulation states in pertinent part that if a claimant's
pension payment
is made under a plan to which the individual did not
contribute, the weekly and maximum amount of
benefits payable to the individual shall be reduced by
an amount equal to the amount of the pension . . . which
is reasonably attributable to such week provided that
the reduced weekly benefit amount shall be computed
to the next lower multiple of [one dollar] if not already
a multiple thereof.
[N.J.A.C. 12:17-8.2(a)(1).]
The Appeal Tribunal found Tawfellos was receiving monthly pension
payments of $2,754.46. Moreover, Tawfellos's claim for unemployment
benefits was based on his earnings at Honeywell, and he had not contributed to
his pension. The Appeal Tribunal therefore reduced Tawfellos's weekly
unemployment benefits by the full amount of his pension payments, from $696
to sixty dollars pursuant to N.J.S.A. 43:21-5a and N.J.A.C. 12:17-8.2(a)(1).
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The Board accepted the Appeal Tribunal's decision. There is sufficient
credible evidence in the record to support the Board's findings of fact and its
decision is consistent with N.J.S.A. 43:21-5a and N.J.A.C. 12:17-8.2(a)(1).
III.
Tawfellos argues, however, that N.J.S.A. 43:21-5a is discriminatory and
unconstitutional because the statute applies to persons who receive a pension,
annuity, or "other similar periodic payment" but not to persons who receive such
payments in a lump sum. He contends the statute unlawfully discriminates
against persons who are involuntarily terminated before the date they may retire
with a full pension.
He further argues that N.J.S.A. 43:21-5(a) unlawfully discriminates
against older persons because it ties the reduction in unemployment benefits to
the date the claimant retires with a full pension. He claims older persons are
more likely to retire with a full pension and opt for monthly pension payments
rather than a lump sum payment.
We note that in McKay v. Horn, 529 F. Supp. 847, 849 (D.N.J. 1981), the
plaintiffs challenged the constitutionality of 26 U.S.C. § 3304(a)(15) and
N.J.S.A. 43:21-5a, which both provide for the reduction of unemployment
benefits payable to persons who simultaneously receive pension benefits or
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other periodic payments attributable to the individual's prior work history.
Among other claims, the plaintiffs in McKay alleged the federal statute and
N.J.S.A. 43:21-5a denied them equal protection under the law in violation of the
United States Constitution and the New Jersey Constitution, because these
measures treat unemployment claimants who receive pension income more
harshly that claimants who receive other forms of income. Id. at 859.
In addressing these claims, the federal district court applied the rational
basis test. Id. at 860. The court noted that "the federal and state unemployment
compensation [statutes] . . . impinge upon no fundamental interest, and do not
create any classification which the Supreme Court has recognized to be 'suspect'
. . . ." Ibid. (citations omitted).
The court found that 28 U.S.C.A. § 3304(a)(15) and N.J.S.A. 43:21-5a
advance several rational legislative goals. Id. at 861-62. The federal and state
statutes: (1) promote the financial integrity and viability of the unemployment
compensation fund by reducing unnecessary expenditures; (2) eliminate
duplicative payment of unemployment benefits to persons who are receiving
adequate alternative wage-replacement income and are less likely to re-enter the
labor market; and (3) promote uniform treatment by the states in the
disqualification of income. Ibid.
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The court noted that the plaintiffs had not directly challenged the
legitimacy of the first two legislative goals. Id. at 862. They contended,
however, that the statutes irrationally distinguish between pension and other
sources of income by providing an offset for pensions but not for other types of
income. Ibid. The plaintiffs also claimed the statutes irrationally provide an
offset for periodic pension payments but not lump sum pension payments. Ibid.
The court rejected these claims, noting that imperfect line drawing "does
not, in and of itself, serve to invalidate the entire legislation." Ibid. The court
stated that, "[w]here the challenged drawing of lines involves the distribution of
government benefits, the Supreme Court has suggested that it is particularly
inappropriate for the courts to substitute their judgment or policy preferences
for those of the legislature." Id. at 863 (citing U.S. R.R. Ret. Bd. v. Fritz, 449
U.S. 166, 179 (1980)).
The court held the statutes fulfilled the purpose of eliminating duplicative
benefits to preserve the fiscal integrity of the unemployment compensation fund .
Ibid. The court stated that the federal statute reflected a determination by
Congress that persons receiving such income are less likely than others to return
to the workforce and therefore are "at some remove" from the primary purpose
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of the unemployment program, which is to provide economic assistance while
an unemployed worker seeks other employment. Ibid.The court observed that, while this assumption "may not be accurate in
every instance, it is nevertheless a reasonable one that Congress was entitled to
make." Ibid. (citing Fritz, 449 U.S. at 178). The court noted the federal statute
applied only to dual benefits funded by the same employer during the "base
period" upon which the unemployment benefits are measured. Ibid. The court
further found that promotion of uniform enforcement of the unemployment
program by participating states was "an additional goal which may legitimately
be pursued by Congress." Id. at 864.
We also note that in Moyer v. Board of Review, 183 N.J. Super. 543, 544-
45 (App. Div. 1982), this court rejected a constitutional challenge to N.J.S.A.
43:21-5a. In that case, the appellant applied for unemployment benefits, but his
application was denied because his "military pension entirely offset his weekly
unemployment benefit entitlement in accordance with N.J.S.A. 43:21-5(a)." Id.
at 545. The appellant argued that the offset provision was unconstitutional on
due process grounds because "contributions into a fund are required from which
an individual situated as he is receives no benefits" and on equal protection
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grounds because "only some paying into the fund entertain a "reasonable
expectation" of receiving benefits." Ibid.
We noted that "constitutional equal protection does not prohibit difference
in treatment between and among individuals in the area of social welfare." Id.
at 546 (citing Richardson v. Belcher, 404 U.S. 78, 81 (1971) and McKay, 529
F. Supp. at 847). We stated that:
[T]he right of all persons must rest upon the same rule
under similar circumstances, and that it applies to the
exercise of all the powers of the state which can affect
the individual or his property, including the power of
taxation. Louisville Gas & Electric Co. v. Coleman,
277 U.S. 32 (1928). . . . It is essential that the
classification itself be reasonable and not arbitrary, and
be based upon material and substantial distinctions and
differences reasonably related to the subject matter of
the legislation or considerations of policy, and that
there be uniformity within the class.
[Ibid. (alterations in original) (quoting Washington
Nat'l Ins. Co. v. Bd. of Rev., 1 N.J. 545, 553 (1949)).]
We held that N.J.S.A. 43:231-5(a) satisfied the rational basis test and was
constitutional. Ibid.We agree with the analysis in McKay and Moyer. We therefore conclude
that N.J.S.A. 43-21-5a rationally promotes the fiscal integrity of the
unemployment compensation program by eliminating duplicative wage-
replacement benefits. The statute does not irrationally distinguish between
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periodic pension payments and other forms of income. In addition, the statute
does not unlawfully discriminate against unemployment claimants on the basis
of age.
In this appeal, Tawfellos also argues: (1) the DOL had a duty to explain
the "existence" of the statute and its legislative history; (2) Honeywell
improperly took advantage of the statutory offset to avoid its "ethical
responsibilit[ies] towards its laid off employee"; (3) the law is vague and subject
to varying interpretations; and (4) the Board's "rationale" is based on "antiquated
socioeconomical circumstances" which are no longer "valid." These arguments
lack sufficient merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E).
Affirmed.
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