In Fornaro v. Flightsafety International Inc., Docket No. A-1295-14T2 (March 6, 2017), the Appellate Division ruled that unemployment compensation benefits do not offset back pay awarded by juries in actions involving the New Jersey Law Against Discrimination.  Plaintiff Rex Fornaro filed an action alleging disability discrimination and retaliatory discharge under the New Jersey Law Against Discrimination against his former employer, Flightsafety International, Inc.  The case proceeded to trial, and the jury found that defendant terminated plaintiff due to his disability and as reprisal for seeking accommodations for his disability.  Thus, the jury awarded back pay to plaintiff in the amount of approximately $83,000.00.

However, the trial judge reduced the back pay award by $14,000.00, representing fifty percent of the unemployment compensation received by plaintiff.  Plaintiff appealed this ruling, contending that the trial judge erred in offsetting his back pay award by fifty percent of his unemployment compensation.

The Appellate Division agreed with plaintiff, and held that unemployment compensation benefits may not be deducted from back pay awarded under the New Jersey Law Against Discrimination.  In so doing, the court found that “shifting the benefit of unemployment compensation from the wronged employee to the discriminating employer does not serve the LAD’s deterrent purpose.”  In addition, the court noted that model jury charge applicable to damages in cases involving the New Jersey Law Against Discrimination specifically provides that unemployment benefits are not deducted from back pay awards.

This case is a significant victory for plaintiffs in LAD cases given that there is now clear appellate case law authority on the issue of whether unemployment benefits compensation offset back pay awards for employees.   If you have any questions about the New Jersey Law Against Discrimination, please contact the Law Office of Frank A. Custode, LLC.