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                                NOT FOR PUBLICATION WITHOUT THE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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