New Jersey Court Rules that Employee Who Voluntarily Resigned is Not Disqualified from Receiving Unemployment Benefits

On March 29, 2018, the Superior Court of New Jersey, Appellate Division held in Cottman v. Bd. of Review that an employee who voluntarily resigned from her job when she was facing imminent termination was eligible for unemployment benefits.

Plaintiff Tamyra Cottman worked as a residential counselor at a group home, which had a policy requiring its employees to find another employee to cover any missed shift. Just before one of her shifts, Cottman’s babysitter unexpectedly quit, leaving her with no childcare for her three special-needs children. Cottman called everyone on her work contact list, but no one was available to cover her shift.

Cottman said she told her supervisor about the situation, who threatened that Cottman might be fired if she did not come in. To avoid being terminated, Cottman quit, and later applied for unemployment benefits. Cottman’s application was denied on the basis that she voluntarily resigned. The denial was affirmed by the New Jersey Department of Labor Appeal Tribunal and the Board of Review.

On appeal, the Superior Court of New Jersey, Appellate Division, reversed. The court reasoned that, “when an employee knows that he or she is about to be fired, the employee may quit without becoming ineligible.” In Cottman’s case, her supervisor reminded her that she was just finishing a probationary period, and not to “play with her time” by not coming in. The court reasoned that Cottman interpreted this as a “near-certainty” that she would be fired if she failed to show up for her shift. So, rather than be terminated, which could hurt her future employment prospects, she resigned.

“[A]n employee need not wait to be fired when discharge is imminent. At that point, the employee may resign and still be eligible for benefits,” held the court.