The New York Appellate Division of the Supreme Court recently ruled on a case involving unemployment insurance benefits that affects individuals who have received severance payments. The court decided to send the case back to the Unemployment Insurance Appeal Board for further consideration. This decision is important for those navigating unemployment claims, especially after receiving severance payments.

The case, titled Matter of Facciolo (Commissioner of Labor), was filed under docket number CV-25-1344. The appellant, Francis Facciolo, represented himself in the appeal. The Commissioner of Labor was the respondent, represented by Attorney General Letitia James and counsel Dennis A. Rambaud. The ruling was entered on November 5, 2026, following a calendar date of October 19, 2026.

Background

The dispute began when Francis Facciolo's employment ended on August 31, 2022. Following his termination, he received a severance package that was paid in two lump sum payments. The first payment was made on September 30, 2022, and the second on January 13, 2023. Facciolo filed a claim for unemployment insurance benefits on September 18, 2023, after the severance payments had been made.

Upon receiving Facciolo's claim, the New York Department of Labor issued a preliminary Monetary Benefit Determination. This determination set his basic base period from April 1, 2022, to March 31, 2023, and an alternate base period from July 1, 2022, to June 30, 2023. However, on October 13, 2023, the Department of Labor issued a Notice of Determination of Dismissal/Severance Payments, declaring Facciolo ineligible for benefits due to the severance payments he received.

The Ruling

The Appellate Division ruled that Facciolo's challenges to the Department's October 2023 determination were not properly before the court. This was because he failed to request a hearing to contest the determination. The court noted, "Initially, claimant's challenges on appeal to the Department's October 2023 Notice of Determination of Dismissal/Severance Payments determination...are not properly before this Court."

Furthermore, the court rejected Facciolo's argument that his severance payments should be considered as weekly remuneration payments that would qualify him for benefits. The court referenced Labor Law § 517 (2) (h), which explicitly excludes dismissal payments from the definition of remuneration. Facciolo also contended that his September 18, 2023 claim was a valid original claim under Labor Law § 527.

Ultimately, the court found that Facciolo's February 2024 claim for unemployment benefits, which was filed after the ineligibility period ended, superseded his initial September 2023 claim. The court stated, "the issue of whether claimant's September 2023 claim is to be considered his 'valid original claim' must be addressed by the Board." As a result, the court remitted the matter back to the Unemployment Insurance Appeal Board for further consideration.

Impact

This ruling has significant implications for individuals who have received severance payments and are seeking unemployment benefits. It highlights the complexities surrounding eligibility for unemployment insurance, particularly when severance payments are involved. The court's decision to remit the case back to the Board indicates that there may be further opportunities for claimants to clarify their eligibility.

The outcome of this case could also set a precedent for similar cases in the future. Claimants who find themselves in situations similar to Facciolo's may look to this ruling as a guide on how their claims may be treated. It emphasizes the importance of understanding the nuances of unemployment law, especially regarding severance payments.

What's Next

The Unemployment Insurance Appeal Board is now tasked with issuing a new decision within 60 days, as directed by the court. It remains to be seen how the Board will address the issue of Facciolo's September 2023 claim and whether it will ultimately grant him the benefits he seeks. There is also the possibility that this case could be appealed further, depending on the outcome of the Board's new decision.