On March 29, 2018, the New Jersey Appellate Decision issued an opinion which clarifies and expands rights to unemployment benefits to certain employees who voluntarily resign from their positions in the face of imminent employment termination. Previously, if an employee voluntary quit his or her job in New Jersey, then that employee was not eligible to receive unemployment compensation benefits. However, the court’s decision in Cottman v. Board of Review, et al. held that the law is not so straightforward.

Cottman worked as a group home consultant and was a mother of three special needs children younger than thirteen years old. On one occasion, Cottman’s babysitting arrangements fell through and she was faced with the prospect of either missing her shift or leaving her children unattended. After attempting unsuccessfully to find a colleague to cover her shift, she explained to the supervisor her situation. The supervisor replied that if she did not come in for her shift, “you might be fired. I wouldn’t play with your time.” Feeling that she did not have the option of leaving her children, Cottman resigned rather than be terminated in accordance with her supervisor’s threat.

Cottman’s subsequent application to the state for unemployment benefits was denied by the Department of Labor and Workforce Development, which held that she had “voluntarily quit” and that the state’s unemployment statute disqualifies those who leave their work voluntarily. This was upheld on administrative appeal by the Board of Labor Review. The court however, in ruling in favor of Cottman, invoked a provision of the unemployment statute that allows employees who know that they are imminently going to be fired to preemptively quit without losing their benefits. While cautioning that the law generally requires an employee to actively attempt to preserve his or her employment to maintain eligibility for unemployment benefits, the court held that in the face of imminent termination of employment, New Jersey law does not require that employee to sit around and wait to be fired. The court deemed the statement attributed to Cottman’s supervisor sufficient to allow her to conclude that she would be fired if she skipped her shift, reasoning that though the “use of the word ‘might’ conveys some uncertainty, she obviously interpreted it as a near-certainty.”

In light of Cottman, employers ought to communicate clearly when discussing potential discipline, up to and including termination. With the Cottman decision in hand, employees may see an avenue to resigning at the first sign of trouble followed by claims that their employment terminations were imminent.