Preeti Gundecha v. Board of Review and Db Services New Jersey, Inc.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3128-13T1
PREETI GUNDECHA,
APPROVED FOR PUBLICATION
Appellant,
June 26, 2015
v.
APPELLATE DIVISION
BOARD OF REVIEW and
DB SERVICES NEW JERSEY, INC.,
Respondents.
___________________________________________
Submitted May 12, 2015 – Decided June 26, 2015
Before Judges Reisner, Higbee, and Currier.
On appeal from the Board of Review,
Department of Labor and Workforce
Development, Docket No. 417,546.
Preeti Gundecha, appellant pro se.
John J. Hoffman, Acting Attorney General,
attorney for respondent Board of Review
(Lewis A. Scheindlin, Assistant Attorney
General, of counsel; Robert M. Strang,
Deputy Attorney General, on the brief).
Respondent DB Services New Jersey, Inc., has
not filed a brief.
The opinion of the court was delivered by
CURRIER, J.S.C. (temporarily assigned).
In this case of first impression, claimant Preeti Gundecha
(Gundecha) appeals from the February 18, 2014 final decision of
the Board of Review (Board) affirming the decision of the Appeal
Tribunal denying her claim for New Jersey unemployment benefits
pursuant to N.J.S.A. 43:21-19(i)(2). We affirm, because
although Gundecha was employed by the company's New Jersey
office, she performed all of her work in North Carolina.
Therefore, she was entitled to unemployment benefits in North
Carolina, not New Jersey.
Gundecha began working for Deutsche Bank (DB) in 1999.
After working briefly in DB's London office, she was transferred
to New York and worked there until 2007. In 2008 Gundecha began
working in a New Jersey office but left on maternity leave in
April 2009. The next month she moved to North Carolina. She
remained on maternity leave until December 2009. At that time,
Gundecha returned to work for DB, telecommuting out of her home
in North Carolina. She worked in that manner throughout 2010.
In January 2011 Gundecha became ill and was unable to work
for the next eighteen months. She was released by her doctor to
return to work in July 2012. She was laid off by DB in
September 2012 and given a year of severance pay.
In February 2013 Gundecha applied to New Jersey for
unemployment benefits.1 Her claim was denied. Claimant
1
Claimant alleges that she contacted the North Carolina
Department of Labor and checked its website in September 2012
(continued)
2 A-3128-13T1
appealed the agency's determination. After a telephone
interview, the Appeal Tribunal affirmed the prior decision
noting that claimant had not established the required base weeks
or earnings within New Jersey and was therefore not eligible for
benefits under N.J.A.C. 12:17-5.1.
Gundecha appealed the Tribunal's decision on the grounds
that she had followed the instructions she had received from a
North Carolina representative to file for benefits in New
Jersey. The Board remanded the matter to the Appeal Tribunal
"for additional testimony from the claimant . . . as to whether
the claimant's services were localized in the state of New
Jersey or in the state of North Carolina . . . ."
Gundecha participated in a second telephone hearing,
following which the Appeal Tribunal rendered its decision.
Citing to N.J.S.A. 43:21-19 and the definition of "employment"
therein, the Tribunal found that "claimant worked most recently
for the above named employer [DB] out of her residence in North
Carolina as a project manager from 12/2009 until 1/28/11. The
claimant's regular work was in North Carolina. Therefore, the
employee's service was localized in North Carolina, the
(continued)
after being laid off. She states she was told that she had to
wait for her severance benefits to be exhausted before she could
file for unemployment benefits and that she should apply for
benefits in New Jersey.
3 A-3128-13T1
claimant's work was not in [']employment['] in accordance with
N.J.S.A. 43:21-19(i)(2) and the claim dated 2/17/13 is invalid."2
Gundecha appealed from that decision, and on February 18, 2014,
the Board affirmed the decision of the Appeal Tribunal. This
appeal followed.
On appeal, Gundecha argues that she was employed by a New
Jersey company and therefore should be considered a New Jersey
employee for purposes of unemployment benefits. She states she
was temporarily telecommuting from North Carolina and intended
to return to physically work in New Jersey.3
Our review of legal issues is de novo. Manalapan Realty,
L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995). However, we
generally defer to an agency's reasonable interpretation of its
enabling statute. See GE Solid State, Inc. v. Dir., Div. of
Taxation, 132 N.J. 298, 306 (1993); SJC Builders, LLC v. N.J.
Dep't of Envirl. Prot., 378 N.J. Super. 50, 54 (App. Div. 2005).
Historically, Congress encouraged the states to create
their own unemployment systems when it passed the Social
Security Act in 1935. In response, states set up systems where
2
The Appeal Tribunal also considered whether claimant qualified
for benefits under the alternate base year after disability
option but determined she did not under the same statutory
analysis. N.J.S.A. 43:21-19(c)(2).
3
As of the time she filed her appeal, claimant continued to
reside in North Carolina.
4 A-3128-13T1
employers contribute to the states' unemployment funds and under
the Federal Unemployment Tax Act, the excise tax paid by an
employer to a state unemployment fund is credited toward the
employer's tax liability. Beverly Reyes, Note, Telecommuters
and Their Virtual Existence in the Unemployment World, 33
Hofstra L. Rev. 785, 789 (2004).
As the systems expanded, it became important for uniform
definitions to be used throughout the nation on the theory that
only one state would be liable for a claimant's unemployment
compensation benefits. Vale v. Gaylords Nat'l Corp., 127 N.J.
Super. 45, 47 (App. Div. 1974). A uniform definition of
"employment" was ultimately adopted by forty-six states
(including New Jersey) and the District of Columbia. Reyes,
supra, 33 Hofstra L. Rev. at 790. That definition remains in
effect today in N.J.S.A. 43:21-19(i)(2).
N.J.S.A. 43:21-19 requires that a claimant have employment
in New Jersey to be eligible for benefits. "Employment" is
defined at Section 43:21-19(i)(2) as:
[A]n individual's entire service performed
within or both within and without this State
if:
(A) The service is localized in this State;
or
(B) The service is not localized in any
state but some of the service is performed
in this State, and (i) the base of
5 A-3128-13T1
operations, or, if there is no base of
operations, then the place from which such
services is directed or controlled, is in
this State; or (ii) the base of operations
or place from which such service is directed
or controlled is not in any state in which
some part of the service is performed, but
the individual's residence is in this State.
[N.J.S.A. 43:21-19(i)(2).]
The statute thus contains four tests to be applied
successively to determine the appropriate state for the filing
of unemployment benefits. The first test is the localization
test. It is defined at N.J.S.A. 43:21-19(i)(5) as:
[s]ervice shall be deemed to be localized
within a state if:
(A) The service is performed entirely within
such state; or
(B) The service is performed both within and
without such state, but the service
performed without such state is incidental
to the individual's service within the
state; for example, is temporary or
transitory in nature or consists of isolated
transactions.
[Ibid.]
If the first test reveals a single state in which the
services are performed, then the state unemployment agency need
not apply the other tests. See Vale, supra, 127 N.J. Super. at
48.
Thus, the primary issue before us is whether claimant's
services were "localized" in New Jersey. New Jersey courts have
6 A-3128-13T1
not considered the "localization" requirement in over forty
years. See Vale, supra, 127 N.J. Super. 45. Telecommuting was
not a part of the employment landscape until recently but it has
become a normal way of working for many employees.4 Thus, the
issue before us is how the localization rule should be applied
to telecommuters.
One jurisdiction that has addressed the issue of
"localization" as it respects telecommuters is New York. In In
re Claim of Allen, 794 N.E.2d 18 (N.Y. 2003), a case with
similar circumstances, the claimant employee worked in the
employer's New York office for several years. When she
relocated to Florida she was permitted to "telecommute" to her
office in New York. After her employer ended the telecommuting
arrangement, the claimant filed for unemployment benefits in New
York.
The New York court applied the localization test and held
that "physical presence determines localization for purposes of
4
Between 2005 and 2010 there was an increase in home-based work.
"During this time, the number of home-based workers went from
7.8 percent of all workers to 9.5 percent, an increase of about
2 million." Peter J. Mateyka, Melanie A. Rapino, and Liana
Christin Landivar, Home-based Workers in the United States:
2010, U.S. Census Bureau 3 (2012), available at
http://www.census.gov/prod/2012pubs/p70-132.pdf.
7 A-3128-13T1
interpreting and applying Section 5115 to an interstate
telecommuter. Because the claimant was regularly physically
present in Florida when she worked for her employer in New York,
her work was localized in one state — Florida." Id. at 22.
Accordingly the claimant was found ineligible for unemployment
benefits from New York.
As was explained by the New York Court of Appeals, "the
uniform rule was intended to promote efficiency, and to ensure
that unemployment benefits are paid by the state where an
unemployed individual is physically present to seek new work.
Unemployment has the greatest economic impact on the community
in which the unemployed individual resides . . . . In our view,
physical presence is the most practicable indicium of
localization for the interstate telecommuter who inhabits
today's 'virtual' workplace linked by Internet connections and
data exchanges." Ibid. We agree.
The localization rule continues to be the simplest and most
efficient method for determining jurisdiction for unemployment
benefits. And despite the modern technology advances that could
not have been imagined when the states adopted the localization
test, the theory behind the definition of "employment" still
holds true today. It remains feasible and most practicable for
5
This is identical to N.J.S.A. 43:21-19(i)(2).
8 A-3128-13T1
the employee's physical presence to be the determinative factor
in determining "localization." It continues to be a
straightforward solution for an employee to know where to file
for benefits and for each state to know its responsibilities.
Of course, if the employee's service does not fit within the
definition, the remaining tests set forth in the statute are
analyzed. See Vale, supra, 127 N.J. Super. at 48.
In this case claimant lives in North Carolina. Although
she was employed by and provided services to the DB office
located in New Jersey, she was physically present in North
Carolina at all times that she was working. Therefore her work
and employment was localized in North Carolina and that is the
state responsible for her benefits.
If claimant was given advice by North Carolina's Labor
Department that she should pursue her benefits in New Jersey
that advice was incorrect. Gundecha must pursue her remedies in
North Carolina. We find that the Board's decision holding
claimant ineligible for unemployment benefits under N.J.S.A. 43-
21-19(i)(2) is correct.
We affirm.
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