Matter of Woody (Roberts)
139 A.D.2d 879 (3d Dep’t 1988)
Appellate Division, Third Department · April 28, 1988
What the court decided
Severance pay is not "remuneration" under the unemployment insurance law. "[P]ursuant to Labor Law § 517 (2) (h), dismissal pay is excluded as remuneration," and the employer’s treatment of the payments as wages did not control.
Who won
The claimant lost on the facts before the court, which turned on how his weeks of employment were counted; the Appeal Board’s decision was affirmed.
Why it matters for salespeople
This short decision is the foundation for an argument that matters to anyone who collects benefits while a severance agreement is being negotiated. The rule that protects benefits already paid from being clawed back has one exception — a "retroactive payment of remuneration" — and severance, under this case and the statute, is not remuneration. No court has yet connected the two points, so it is an argument rather than a holding.
Key passage: 139 A.D.2d 879 (3d Dep’t 1988) at 880.
Read the decision (PDF) Marked with official reporter pages for citation.
Source of the text: Caselaw Access Project, Harvard Law School Library (scan of the official Appellate Division Reports) — https://case.law/caselaw/?reporter=ad2d&volume=139&case=0879-01. This page summarizes the decision in plain language; the court’s own words are in the opinion below.
Where this case comes up in the guide
The opinion
Red markers such as [139 AD2d 000] show where each page of the official reporter begins. Gray markers such as [*2] are the slip opinion's own page markers.
[139 AD2d 879] —Mikoll, J.
Appeal from a decision of the Unemployment Insurance Appeal Board, filed January 21, 1987, which ruled that claimant was ineligible to receive benefits because he was not employed a sufficient number of weeks during his base period.
Claimant was employed as a purser by a steamship line. The employer discontinued the use of pursers and, in an agreement with claimant’s union, paid claimant severance pay from January 1986 to June 1986. Claimant ceased working on July 15, 1985 and filed an original claim for benefits effective July 21, 1986, thus establishing a base period from July 22, 1985 through July 20, 1986. Claimant received $11,031.12 in [139 AD2d 880] severance payments in 1986. Claimant sought unemployment insurance benefits which were denied by the Commissioner of Labor. This denial was affirmed by the Unemployment Insurance Appeal Board, which held that claimant was ineligible to receive benefits effective July 21, 1986 because he failed to file a valid original claim in that he had no weeks of employment during his base period.
The issue here is whether severance pay constitutes remuneration in the year it is received, thus giving claimant the necessary weeks of employment in his base period. Claimant urges that the agreement between the employer and his union to denominate these severance payments as wages should be controlling on the issue. We disagree (see, Matter of Politzer [Catherwood], 11 AD2d 839). Further, pursuant to Labor Law § 517 (2) (h), dismissal pay is excluded as remuneration. Relevant to the issue also is Labor Law § 524, which defines a "week of employment” as a week in which an employee did some work for his employer. Claimant had done no work for the employer in his base period.
The decision of the Board is thus supported by substantial evidence and should be affirmed.
Decision affirmed, without costs. Mahoney, P. J., Weiss, Mikoll, Yesawich, Jr., and Levine, JJ., concur.