Matter of Schwartfigure v. Hartnett

In Matter of Schwartfigure v. Hartnett (83 N.Y.2d 296 [1994]), the petitioner had applied for unemployment benefits and was found qualified to receive them. Thereafter, the Unemployment Insurance Appeal Board (the Board) reversed the decision due to no fault of petitioner, resulting in an overpayment of $ 2,112. Two years later, petitioner filed for unemployment benefits and was again found qualified. However, based on its long-standing policy, the Department of Labor (DOL) withheld 50% of the benefits to recoup the previous overpayment and summarily rejected petitioner's request to repay the overpayment in smaller installments. While acknowledging the DOL's common-law right of setoff, the Schwartfigure court held that the DOL had erred in the manner in which it had implemented the policy, stating (at 301) that "Respondent's 50% set-off policy for nonwillful overpayments is a rigid, numerical policy invariably applied across-the-board to all claimants without regard to individualized circumstances or mitigating factors, and as such falls plainly within the definition of a 'rule' . . . ."