NEWARK — People who take buyouts so co-workers can keep their jobs cannot collect unemployment benefits, a state appellate court ruled today.
The 3-0 decision scrapped a 2003 state regulation that was challenged by Verizon New Jersey Inc., the state's dominant provider of local telephone service.
The panel said the regulation is invalid because it contradicts a state law and a state Supreme Court ruling on that law.
The regulation was crafted by the state Department of Labor and Workforce Development. It was reviewing the decision and would have no comment Wednesday, spokeswoman Marcela Ospina said.
Workers and employers in New Jersey contribute to the state's unemployment compensation fund. The amount that employers pay is based on how many former workers get jobless benefits.
Verizon spokesman Richard J. Young said, "The court confirmed that individuals who voluntarily leave their employment are not entitled to unemployment benefits. This decision is clearly consistent with the statutory framework for the granting of unemployment benefits in the state of New Jersey.''
More than 20,000 workers around the country left Verizon in 2003 with early retirements, of which about 1,200 attempted to collect unemployment in New Jersey, Young said. The company opposed that effort.
Verizon maintained that the policy of the New Jersey Legislature has been to reserve jobless benefits for workers who are involuntarily terminated.
The Labor Department asserted that it is entitled to broad discretion in administering unemployment compensation. It also argued that the regulation was a practical response to job losses caused by corporate downsizing.
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