How many times have we heard it?  “They told me that I had to resign or I’d be fired.”  As if they were doing you some big favor.  So the employee submits a letter of resignation, presumably to avoid the stigma attached to being fired.

The comes the application for unemployment, and the frequent denial of benefits, since unemployment is not available to those who voluntarily quit a job.

The law in NJ has recently been clarified by the decision of the Appellate Division in Lord v. Board of Review.  The facts were simple.  Lord, the applicant for benefits, needed his car to do his job.  One day his transmission broke, and he did not have the money needed to repair it or obtain other transportation.  He notified his supervisor, saying that he would not be able to return to work on Monday.  The supervisor then told him that he “had to resign . . .  effective immediately.”

Lord’s application for unemployment benefits was denied, as the Division of Unemployment Compensation decided that he had left his employment voluntarily without good cause attributable to the work.  The Appeal Tribunal upheld the initial decision.

The Appellate Division (NJ’s second-highest court) reversed, finding that Lord’s separation from employment was not voluntary.   Rather, it found that the termination was initiated by the employer, not the employee, and there was involuntary. 

As with most cases involving unemployment benefits, there are some factual nuances in the decision which make it impossible to say that Lord v. Board of Review establishes a sweeping rule that can be applied to every situation.  Nonetheless, it is good news for employees.  Employers need to be aware of this ruling as well, to ensure that “resignations” are just that, and not disguised firings.