Employees Not Required to Make Formal Complaint Before Resigning Due to Discrimination or Retaliation

Ty Hyderally, Esq., Jennifer Vorih, Esq.

December 17, 2018

In a decision issued today, the Appellate Division held that a woman who left her job due to sexual harassment, whistleblower retaliation and age discrimination was eligible for unemployment benefits. The Court also confirmed that an employee is not required to make a formal complaint of discrimination prior to resigning, in order to be eligible for benefits.

Sabrina Medina worked at McCloone’s, a restaurant in West Orange, from May 2013 to October 2016. In about May 2016, McCloone’s hired a new general manager, who treated Medina differently than other employees and advised Medina to act “b****ier” and “c***tier” to succeed as a woman in the restaurant industry. Medina complained about this treatment to the Executive Chef, who took no corrective action.

Also in about May 2016, there was a sewage backup in McCloone’s restaurant, which caused unsanitary and unsafe conditions for patrons and employees. Medina refused to serve food under those circumstances or to work in unsafe conditions. McCloone’s issued Medina a letter expressing its disappointment in her decision not to work as a result of the sewage backup, and thereafter excluded Medina from a promotion, gave her erratic shift schedules, and excluded her from meetings. McCloone’s asked Medina about her age when she interviewed for a promotion, and informed Medina that she had not received the promotion due to her gender and age.

The harassment, discrimination, and retaliation was very stressful for Medina, and negatively impacted her health and her ability to sleep.

After Medina left her position at McCloone’s, she applied for unemployment benefits. The Department of Labor’s deputy found that Medina had left work voluntarily, without good cause attributable to the work, and disqualified her from benefits. Medina appealed this decision to the Appeal Tribunal, which heard Medina’s testimony regarding the above facts, as well as that she had not wanted to leave her job but had to do so. Even though McCloone’s did not appear for the Appeal Tribunal hearing, and Medina’s testimony was thus uncontroverted, the Appeal Tribunal affirmed the Deputy’s determination that Medina had left her job voluntarily and without good cause attributable to the work, and was thus disqualified for benefits. The hearing examiner wrote that Medina’s health was not affected by the working conditions and that the new general manager’s treatment of Medina was not shown to be “abnormal,” but amounted to “mere animosity” between the two. The hearing examiner further stated that, “even if a cause which is good cause attributable to such work exists,” an employee cannot leave a position and be eligible for benefits, “unless she makes a reasonable effort to adjust that grievance.”  As Medina had complained to McCloone’s executive chef about the harassment, the Appeal Tribunal examiner appears to have required Medina to file a formal complaint. The Board of Review, Department of Labor, affirmed this decision.

The Appellate Division found that the Department of Labor acted “arbitrarily, capriciously, and unreasonably,” and also “misapplied the relevant legal standards” in denying Medina benefits. In so doing, the Court made clear that employees are not required to, “take some action” regarding unacceptable working conditions prior to resigning, in order to be eligible for benefits. Specifically, the Appellate Division held that, “Medina was not required to take action by filing a formal grievance or complaint against McCloone’s to be entitled to unemployment compensation benefits.”

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