New Jersey Appellate Division: Unemployment Benefits Do Not Offset Damages for Employment Discrimination

Employment Attorneys Serving Northern and Central New Jersey

Before choosing to proceed with litigation for employment discrimination, our clients often ask us whether the litigation will impact their receipt of unemployment benefits. While the answer to that question is clearly no, whether defendants could later seek an offset of unemployment benefits received against damages recovered by prevailing plaintiffs in employment discrimination litigation has remained somewhat unclear. Until yesterday.

In it's March 6, 2017 written opinion, New Jersey's Appellate Division confirmed in Acevedo v. Flightsafety Int'l, Inc. that damages awarded to a plaintiff in employment discrimination cases under the New Jersey Law Against Discrimination ("NJLAD") cannot be reduced for unemployment benefits previously received by the plaintiff. Defendants in Acevedo argued that N.J.S.A. 2A:15-97, a New Jersey statute requiring reduction of personal injury damages based on benefits received from another source related to the injury, should apply to NJLAD cases. However, the Appellate Division disagreed, finding that nothing in that statute's language, history, or purpose indicated that it should be applied to NJLAD cases. Rather, the Court followed decisions under Title VII of the Civil Rights Act of 1964 and the National Labor Relations Act, which have repeatedly held that unemployment compensation is not to be deducted from back pay in discrimination and unfair labor cases brought under those statutes. Most significantly, the Appellate Division considered the purpose of NJLAD in deterring discrimination in employment and held that offsetting for unemployment compensation would frustrate that purpose and be inconsistent with the purpose of unemployment benefits, which is not "to discharge any liability or obligation of [employers], but to carry out a policy of social betterment for the benefit of the entire state."  

Contact an attorney from Green Savits, LLC today at (973) 695-7777 for a full assessment of your potential claims.