Schock v. Board of Review, Division of Employment Sec., Dept. of Labor and Industry

• Decision Date: 21 October 1965
• Docket Number: No. A--68,A--68
• Citation: 89 N.J.Super. 118,214 A.2d 40
• Parties: Robert C. SCHOCK, Plaintiff-Appellant, v. BOARD OF REVIEW, DIVISION OF EMPLOYMENT SECURITY, DEPARTMENT OF LABOR AND INDUSTRY, State of New Jersey, and Public Service Electric & Gas Company, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 118

89 N.J.Super. 118

214 A.2d 40

Robert C. SCHOCK, Plaintiff-Appellant, v. BOARD OF REVIEW, DIVISION OF EMPLOYMENT SECURITY, DEPARTMENT OF LABOR AND INDUSTRY, State of New Jersey, and Public Service Electric & Gas Company Defendants-Respondents.

No. A--68.

Superior Court of New Jersey Appellate Division.

Argued Oct. 4, 1965.

Decided Oct. 21, 1965.

George Duggan, Newark, for appellant.

Edward A. Kaplan, Jersey City, for respondent Board of Review, Division of Employment Security, Department of Labor and Industry.

Luke A. Kiernan, Jr., Newark, for respondent Public Service Electric & Gas Co.

Before Judges CONFORD, KILKENNY and LEONARD.

The opinion of the court was delivered by

KILKENNY, J.A.D.

Claimant Robert C. Schock appeals from a final decision of the Board of Review, Division of Employment Security, holding that he is disqualified under N.J.S.A. 43:21--5(b) from receiving unemployment benefits for the period between March 10, 1964 and April 18, 1964 because he was discharged on March 10, 1964 for violation of the rules of his employer, Public Service Electric and Gas Company, presumably known by him, in that he left his employer's truck with the motor running unattended on a public street and was found by his supervisor in a nearby tavern drinking beer with a co-worker at a time when he should have been on the outside working on his job assignments.

N.J.S.A. 43:21--5(b) provides:

'An individual shall be disqualified for benefits:

(b) for the week in which he has been Discharged for misconduct connected with his work, and for the 5 weeks which immediately follow such week (in addition to the waiting period), as determined in each case.' (Italics ours)

Claimant contends that this disqualifying provision of the statute is not applicable herein because he was not finally and absolutely 'discharged,' but merely subjected, after an arbitration hearing, to a 'disciplinary lay off' for this misconduct connected with his work. This contention is based upon the fact that, following his discharge, Schock challenged the right of his employer to discharge him, claiming that the discharge was not 'for just cause,' as required under the terms of the collective bargaining agreement between the Gas Workers Union, Inc., of which he was a member, and his employer, Public Service Electric and Gas Company.

Schock's claim of wrongful discharge was processed, pursuant to the grievance procedure set forth in the labor agreement, to a hearing before an arbitrator. Schock admitted leaving the company truck across the street from a tavern, unattended and with its motor running, and going into the tavern at 2:30 P.M. when he should have been working, and having a beer there. However, he asserted by way of defense or mitigation that he was having trouble with the motor and the company mechanic had advised him to leave the motor running, and that his going into the tavern was to borrow a time sheet from a co-worker, who was in the tavern eating a sandwich and who bought him a beer which he drank. He was doing this while waiting for the co-worker to go out to his truck for the time sheet. The arbitrator decided that Schock's deficiencies did not warrant a discharge, but that a suspension or disciplinary lay-off for the three months while the grievance procedure was pending was a severe and 'more appropriate penalty' and would serve as a warning to Schock that 'he must be careful in the future to live up to the letter of the rules and regulations of the Company and that any further infractions of the rules may well lead to his discharge.' The arbitrator directed that Schock 'be reinstated one week from the receipt of the award,' which was dated June 13, 1964.

If the word 'discharged' in N.J.S.A. 43:21--5(b) was intended by the Legislature to mean only an absolute final termination of the employment relationship, it is clear that Schock was not discharged within that limited meaning. The pronouncement by the employer that Schock was discharged did not make his discharge a binding finality. The grievance procedure under the collective bargaining procedure, whereby Schock's dismissal was subject to review, reversal or modification by an arbitrator, represented a contractual surrender by the employer of the absolute right to make the discharge of an employee conclusive by its own unilateral action. Donnelly v. United Fruit Co., 40 N.J. 61, 95, 190 A.2d 825 (1963). See also William J. Burns International Detective Agency, Inc. v. New Jersey Guards Union, Inc., 64 N.J.Super. 301, 165 A.2d 844 (App.Div.1960). The arbitrator's decision directing Schock's reinstatement, binding by contract upon the employer, demonstrates the lack of finality in the employer's qualified right to discharge.

At most, the employer's discharge of Schock on March 10, 1964 was inchoate. It would not become consummate unless Schock elected not to challenge it under the grievance procedure of the labor agreement, or, having pursued that remedy, the matter was resolved by the arbitrator in favor of the employer. In the instant case the arbitrator reversed the penalty of an absolute discharge, substituted a disciplinary lay-off for three months, and directed Schock's reinstatement. Hence, Schock's employment relationship with Public Service Electric and Gas Company was only temporarily discontinued. It was not permanently terminated without any right to reinstatement, within the literal meaning of the word 'discharged.'

The Board and the employer contend that the Board is not 'bound' by the arbitrator's determination but 'must reach its own decision on the evidence adduced at the hearing and the law.' No one disputes those propositions. The arbitrator's ruling is not a quasi-judicial application of the Unemployment Compensation Act to which the Board must defer. But the arbitrator's ruling was a Fact which, under the collective bargaining agreement, called for the legal conclusion by the Board of Review in applying the statute, and by this court on review, that the claimant ultimately was not 'discharged.' The Board does not contend that it was not aware of the arbitrator's decision when it ruled.

Philadelphia Transportation Co. v. Unemployment Comp. Bd. of Rev.,186 Pa.Super. 142, 141 A.2d 410, 413 (Super.Ct.1958), and Pittsburgh Railways Company v. Unemployment Comp. Bd. of Rev., 190 Pa.Super. 342, 154 A.2d 328 (Super.Ct.1959), are cited by the Board as authority for the proposition that the arbitrator's decision is not binding upon it. Those cases held that the Unemployment Compensation Board of Review cannot delegate to another body its duty to find facts and apply the law in a proceeding for unemployment benefits. With due respect for the views expressed in those decisions, it is our view that the Board cannot find as a Fact that an employee was discharged, when in truth he was not discharged in the sense of a final termination of the employment relationship.

A deliberate violation by an employee of the employer's rules, a disregard of standards of behavior which the employer has the right to expect of his employee, as in the instant case, constitutes 'misconduct connected with his work' within the fair intendment of N.J.S.A. 43:21--5(b). 48 Am.Jur., Social Security, Unemployment Compensation, etc., § 38, at p. 541 (1943); Beaunit Mills, Inc. v. Board of Review, Division of Employment Security, 43 N.J.Super. 172, 183, 128 A.2d 20 (App.Div.1956).

Did the Legislature intend to disqualify an employee guilty of such misconduct from receiving unemployment benefits for the six weeks prescribed in N.J.S.A. 43:21--5(b) Only if he is absolutely Discharged because of such misconduct, but not to disqualify him if he is penalized for his wrongful conduct by a Temporary suspension or Disciplinary lay-off? This court does not have unanimity of opinion as to the answer to that question. A majority of the court feels that it would be in plain derogation of the spirit and policy of the law--protection against the hazard of Involuntary unemployment--to provide unemployment benefits for the prescribed period of six weeks to employees whose unemployment during that period was due to their own Voluntary misconduct.

We recognize that the Legislature used only the word 'discharged' in the disqualifying provision of the statute, and that word, in its strictly literal sense, means a total severance of the employment relationship. True, our interpretation of the statute goes beyond a literal application of the language used. But, in construing a statute, where 'a literal interpretation would lead to anomalous or absurd results, the spirit of the law controls the letter.' Giordano v. City Commission of the City of Newark, 2 N.J. 585, 594, 67 A.2d 454, 458 (1949). Chief Justice Weintraub clearly set forth this rule of statutory construction in New Capitol Bar & Grill Corp. v. Div. of Employment Sec., 25 N.J. 155, 135 A.2d 465 (1957), in the following words:

'It is frequently difficult for a draftsman of legislation to anticipate all situations and to measure his words against them. Hence cases inevitably arise in which a literal application of the language used would lead to results incompatible with the legislative design. It is the proper function, indeed the obligation, of the judiciary to give effect to the obvious purpose of the Legislature, and to that end 'words used may be expanded or limited according to the manifest reason and...