Despite the constant influx of novel legal issues caused by the COVID-19 crisis, the New Jersey Appellate Division is still busy at work rendering decisions on all aspects of the law, including those related to labor and employment. Case in point: M.R. v. Board. of Trustees (PERS), No. A-6015-17T4, 2020 N.J. Super. Unpub. LEXIS 615, an unpublished decision where the Court was again asked to determine whether a settlement agreement in a disciplinary action providing for resignation precluded the subject employee from subsequent eligibility for disability retirement benefits. The Appellate Division previously addressed this issue by way of a published opinion in Cardinale v. Bd. of Trustees, 458 N.J. Super. 260 (App. Div. 2019). You can find our summary of that particular opinion here.

This new case, M.R. v. Board. of Trustees, involved a Judiciary employee who agreed to resign in connection with pending disciplinary charges alleging inappropriate conduct and violation of Judiciary policy. Prior to entering into that agreement, however, the employee filed an application for disability retirement with the Public Employment Retirement System (“PERS”) for a health condition that purportedly arose prior to the disciplinary action. The settlement agreement in the disciplinary action provided that the parties took no position on the impact of the settlement upon the employee’s pending disability retirement matter. In the subsequent disability retirement proceeding, the threshold issue was whether the settlement and resignation disallowed the processing of his disability claim. PERS ultimately entered a final decision holding that the settlement agreement and resignation precluded the employee from obtaining disability retirement benefits, leading to the appeal with the Appellate Division. Ultimately, the Appellate Division affirmed the decision of PERS and based its determination on the earlier Cardinale case.

In Cardinale, the court considered an application for disability benefits under the Police & Firemen’s Retirement System (“PFRS”). 458 N.J. Super at 262. The plaintiff in that matter, a former police officer, had voluntarily and irrevocably retired from his position under a settlement agreement after he was suspended for a positive drug test. Id. at 264-65. The Court held “that when a PFRS member—here a police officer—voluntarily irrevocably resigns from active service, such a separation from employment automatically renders the individual ineligible for ordinary disability benefits.” Id. at 263 (emphasis added). The Court found the plaintiff’s claimed disability “irrelevant to its holding that his irrevocable resignation made him ineligible for benefits in the first place.” Id. at 268.

The Court in Cardinale found that N.J.S.A. 43:16A-8(2) dictates that the process whereby a recipient recovers from his or her disability and returns to work is the only way the Board can cut off disability benefits. Id. at 271. If, on the other hand, a worker “irrevocably resigned” from his or her former position, that creates, “a practical problem that strains the workability of the system . . . . the Board cannot statutorily cease paying any approved disability benefits, once they have begun, for an individual who voluntarily resigns from duty to settle disciplinary charges and agrees never to return. [Id. at 270-73.] Consequently, the Court ruled that allowing an employee to seek disability benefits in a situation where he or she had irrevocably retired would prevent the State from ever cutting off disability benefits, even upon recovery, because the employee could never “return” to his or her former employment and that “such an outcome “would violate public policy, contravene the rehabilitation statute, and encourage abuse of the disability retirement system.” Id. at 273.

In the more recent matter, M.R. v. Board. of Trustees, the Court acknowledged that Cardinale involved a different pension scheme, namely, PFRS, rather than PERS. It determined, however, that a comparison of the statutes demonstrated that Cardinale’s logic applied with equal force to PERS given that the various pension schemes were designed to be “part of a harmonious whole.”

The employee in M.R. v. Board. of Trustees presented a novel argument and contended that he was eligible for the disability pension because the disciplinary settlement only barred him from reemployment with the Judiciary. He claimed he can return to employment in a different (non-judicial) branch of State government, and that there is nothing in the settlement agreement “to say that he couldn’t return to his former duties with a different employer.” He argued this possible return to service as a PERS member is consistent with N.J.S.A. 43:15A-44.

The Appellate Division was not persuaded, holding that the employee did not suggest what jobs, if any, outside the Judiciary would be akin to his former “duty” or would require similar responsibilities to his position. The Court held that he cited no cases to support the argument that N.J.S.A. 43:15A-44 envisions allowing an employee to return to “his former duty, just not his former employer” and concluded that the case law supports the contrary proposition, that an employee who retires due to disability and subsequently recovers must be rehired by his former employer in the same or similar position. Because the disciplinary settlement agreement barred that possibility, the Court affirmed the decision of PERS, thereby reaffirming its earlier ruling in Cardinale.

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Photo of Michael DeRose Michael DeRose

Michael P. DeRose is a shareholder at the firm and primarily focuses his practice in labor/ employment law and other aspects of civil litigation, such as contract disputes. He has litigated and tried hundreds of matters before the Superior Court of New Jersey…

Michael P. DeRose is a shareholder at the firm and primarily focuses his practice in labor/ employment law and other aspects of civil litigation, such as contract disputes. He has litigated and tried hundreds of matters before the Superior Court of New Jersey, the Office of Administrative Law and the New Jersey Public Employment Relations Commission on behalf of various labor unions and their members. Michael has extensive experience defending and fighting for members of law enforcement and other public employees facing adverse disciplinary action, such as termination or suspension from employment. He also frequently argues before New Jersey’s Appellate Division on behalf of his clients.

A large portion of his practice is also devoted to contract negotiations on behalf of union clients, representing such clients in grievance arbitration/ contract disputes, and otherwise advising union leaders on labor and employment matters.  Michael also has significant experience in the realm of interest arbitration on behalf of the firm’s law enforcement and firefighter unions. As a result of the firm’s robust labor and employment practice, Michael regularly appears before various state agencies, such as the New Jersey Civil Service Commission, the New Jersey Division of Pensions and Benefits, the State Health Benefits Commission, and NJ PERC. In addition to representing labor unions and active employees, Michael also represents retirees before the Division of Pensions in disability retirement applications, both ordinary and accidental disability retirement, in pension forfeiture actions, and in other miscellaneous pension disputes. He also counsels private business and their principals in contract and employment law, in addition to representing their interests in civil litigation. Michael has a track record of obtaining favorable outcomes for his clients and treats each everyone of them on an individual and particularized basis in accordance with their needs.

Before joining the firm in August of 2015, Michael was an associate counsel at a civil litigation firm out in Trenton, New Jersey, where he principally focused his practice around employment law and tort claims litigation. Prior to that, he served as a law clerk in the Superior Court of New Jersey for the Honorable F. Patrick McManimon, Mercer County Vicinage, from September of 2012 to August of 2013, where he attained significant experience in the realm of alternative dispute resolution having mediated well-over one-hundred cases, primarily related to commercial and residential landlord/ tenant disputes and contract/ business litigation. He earned his Juris Doctorate in 2012 after graduating from the Western Michigan University-Thomas M. Cooley School of Law. In 2007, he earned his Bachelor of the Arts in Criminal Justice and Public Administration from Kean University where he was a member of the Kean University baseball team and vice president of the Alpha Phi Sigma chapter of the National Criminal Justice Honor Society.

Michael is admitted to the New Jersey State Bar, the United States Federal Court for the District of New Jersey, and is a member of the Mercer County Bar Association.