T.L. Macauley v. UCBR ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Terri L. Macauley, :
Petitioner :
:
v. : No. 858 C.D. 2017
: Submitted: March 13, 2019
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
PRESIDENT JUDGE LEAVITT1 FILED: January 28, 2020
Terri Macauley (Claimant), pro se, petitions this Court for review of an
adjudication of the Unemployment Compensation Board of Review (Board) that
affirmed the decision of the Referee to deny Claimant’s claim for unemployment
benefits on the ground that she was ineligible for benefits under Section 402(h) of the
Unemployment Compensation Law (Law).2 Claimant presents two issues for this
Court’s review: (1) whether the Board erred by affirming the Referee’s ruling that
Claimant was ineligible for benefits when Claimant appealed only the benefit
1
This matter was assigned to the authoring judge on September 19, 2019.
2
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(h)
(relating to self-employment).
amount; and (2) whether Claimant had proper cause for not appearing at the Referee
hearing.3 After review, we vacate and remand.
Claimant filed an application for unemployment benefits, wherein she
reported that she was laid off from her employment with Goodwill Keystone Area
(Employer). Claimant sent the Indiana Unemployment Compensation (UC) Service
Center a copy of Schedule C to her 2016 federal tax return, which reported a net
profit of $1,781.00 from her sole proprietorship. The UC Service Center determined
that Claimant was entitled to unemployment compensation benefits under Section
402(h) of the Law, subject to a deduction of $71.54 per week for her sideline business
income.
Claimant appealed the notice of determination. In her appeal petition,
Claimant stated that in 2016 a referee had determined that her self-employment was a
sideline business and that she was eligible for unemployment benefits under Section
402(h).4 Claimant asserted that the referee who issued the 2016 decision calculated
her prorated deduction based on the net profit reported on line 31 of her 2015
Schedule C. Claimant further asserted that in the instant claim, the UC Service
Center erred in calculating her deduction by using her gross income from the sideline
3
Claimant included a third issue in her Statement of Questions Involved: whether the Board erred
by finding Claimant ineligible for unemployment compensation benefits based on her sideline
business. This issue is subsumed in the Court’s restatement of the issues.
4
The referee decision from 2016 was not included in the certified record in this case.
2
business reported on line 7 of Schedule C as opposed to the net profit reported on line
31.5
On March 21, 2017, the Referee conducted a hearing. Claimant did not
appear. The Referee specifically noted and accepted into the record the documents in
Claimant’s file.6 On March 22, 2017, the Referee issued a decision that stated:
The claimant failed to appear at the hearing to offer competent
evidence that she qualifies for the sideline business exception to
the [L]aw that disallows collection of unemployment
compensation benefits by someone who is self-employed;
consequently the claimant is not eligible for benefits under
Section 402(h) [of the Law].
Referee Decision at 2. The Referee reversed the UC Service Center’s eligibility
determination, and Claimant appealed to the Board.
The Board adopted the Referee’s findings and conclusions. It
determined that Claimant did not have proper cause for her nonappearance at the
5
It is apparent that the UC Service Center applied Section 65.121 of the Department of Labor and
Industry’s (Department) regulations, 34 Pa. Code §65.121, to calculate Claimant’s deduction by
using her gross income from her sideline business rather than her net earnings. This Court recently
declared Section 65.121 to be unreasonable and that, for purposes of calculating “net earnings” for a
sideline business, the Department must deduct all of a claimant’s business expenses from her gross
revenue. Lerch v. Unemployment Compensation Board of Review, 180 A.3d 545, 552 (Pa. Cmwlth.
2018). This Court issued Lerch on March 12, 2018. Because Claimant argued that her deduction
should have been based on her net earnings, not her gross earnings, and the Board used an
unauthorized, unreasonable regulation in performing its calculation, this matter must be remanded
to the Board, on this basis alone, to recalculate Claimant’s deduction in accordance with Lerch. See
Smith v. Unemployment Compensation Board of Review (Pa. Cmwlth., No. 850 C.D. 2017, filed
March 21, 2018), slip op. at 6. (“[B]ecause the Department calculated [the c]laimant’s deductible
using an unauthorized, unreasonable regulation, this Court remands the matter to the [Board] to
recalculate [the c]laimant’s deductible in accordance with Lerch.”).
6
The documents included, inter alia, Claimant’s Internet Initial Claims form and her 2016 Schedule
C tax form.
3
Referee hearing and affirmed the Referee’s decision. Claimant petitioned for this
Court’s review.7
Claimant asserts that she appealed only the calculation of the deduction
for her sideline business income and, thus, the Referee erred by sua sponte raising an
issue that was not appealed, i.e., her eligibility for unemployment benefits. She
argues that the Board erred in affirming the Referee’s ruling that she is ineligible for
benefits. The Board responds that because the UC Service Center decided that
Claimant was eligible for benefits, the eligibility issue was before the Referee.
Further, because Claimant did not appear at the Referee hearing, the Board contends
she failed to meet her burden of proving that her business was a sideline business for
purposes of Section 402(h) of the Law.
We begin with the language of Section 402(h) of the Law, which
provides that an employee is ineligible for unemployment compensation benefits for
any week
[i]n which he is engaged in self-employment: Provided,
however, That an employe who is able and available for
full-time work shall be deemed not engaged in self-
employment by reason of continued participation without
substantial change during a period of unemployment in any
activity including farming operations undertaken while
customarily employed by an employer in full-time work
whether or not such work is in ‘employment’ as defined in
this act and continued subsequent to separation from such
work when such activity is not engaged in as a primary
source of livelihood. Net earnings received by the employe
with respect to such activity shall be deemed remuneration
7
“Our scope of review is limited to determining whether constitutional rights were violated,
whether an error of law was committed, or whether the findings of fact were unsupported by
substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704.” Turgeon v.
Unemployment Compensation Board of Review, 64 A.3d 729, 731 n.3 (Pa. Cmwlth. 2013).
4
paid or payable with respect to such period as shall be
determined by rules and regulations of the department.
43 P.S. §802(h).
Here, Claimant applied for unemployment benefits and received the UC
Service Center’s determination that she was eligible for unemployment benefits under
Section 402(h) of the Law and that the deduction from her weekly benefit payment
would be $71.54. Because Claimant believed the deduction calculation was
incorrect, she appealed the determination to the Referee on that singular issue.
Claimant, who was pro se, was not informed that her appeal of the deduction amount
would place her very eligibility for benefits at issue.
Today, an en banc panel of this Court has addressed the nearly identical
scenario in Quigley v. Unemployment Compensation Board of Review, __ A.3d __
(Pa. Cmwlth., No. 1449 C.D. 2017, filed January 28, 2020). In Quigley, the UC
Service Center found the claimant eligible for unemployment benefits under Section
402(h) of the Law. The claimant appealed, arguing that the UC Service Center had
erred in calculating the deduction for her sideline business income. She did not
appear at the referee’s hearing. After reviewing the documents in the claimant’s file,
the referee affirmed the UC Service Center’s determination with a modification to the
amount of the deduction. The claimant appealed to the Board, again challenging only
the calculation of the deduction and not her eligibility to receive unemployment
benefits. The Board reversed the referee’s decision, holding that the claimant failed
to meet her burden of proving she engaged in a sideline business activity under
Section 402(h). On the claimant’s appeal to this Court, we considered whether the
Board has the authority to change, sua sponte, the scope of a claimant’s appeal to
address an issue not raised by the separating employer, the claimant or the
Department of Labor and Industry (Department). We held that the Board lacks such
authority.
5
In so holding, we observed that the claimant was not aggrieved by the
determination of the UC Service Center and the referee that she was eligible for
benefits. Rather than decide the controversy before it on appeal, i.e., the calculation
of the claimant’s benefit, the Board transformed the nature of the controversy to one
of benefit eligibility.8 We held that this process deprived the claimant of notice and
an opportunity to be heard on the eligibility issue; contravened the Law’s stated
objective to provide workers unemployed through no fault of their own with some
measure of economic security; and frustrated the principle that remedial legislation
must be liberally construed. Finally, we concluded that the Board had improperly
commingled the Department’s prosecutorial and adjudicatory functions.
We limited our holding to the circumstances presented in Quigley, i.e.,
“where the claimant, through no fault of her own, becomes unemployed; where the
claimant is found to be eligible for unemployment benefits and no party challenges
her eligibility; and where, on review of the claimant’s appeal of the computation of
her unemployment benefit amount, the Board sua sponte raises the issue of her
eligibility for benefits.” Quigley, __ A.3d at __, slip op. at 11-12. We noted that our
holding “applies equally to a case where the referee sua sponte revisits the UC
Service Center’s determination that the claimant is eligible for benefits and does not
allow the claimant to present evidence.” Id. at __, n.11, slip op. at 12, n.11. That is
the situation presented in the case sub judice.
8
The cases cited by the dissent are distinguishable on this point. In both Mazur v. Unemployment
Compensation Board of Review, 193 A.3d 1132 (Pa. Cmwlth. 2018), and Lenz v. Unemployment
Compensation Board of Review, 432 A.2d 1149 (Pa. Cmwlth. 1981), the issue in the proceeding
was the claimant’s eligibility for unemployment compensation benefits. By contrast, here,
Claimant’s eligibility was never in dispute. The UC Service Center held that she was eligible for
benefits because her self-employment was limited to a sideline activity. Her former employer did
not contest her eligibility, and neither did the Department. Rather than decide the controversy
presented, which pertained to benefit calculation, the Referee transformed the nature of the
controversy to one of benefit eligibility. Claimant had no notice that the Referee would do so.
6
Accordingly, for the reasons set forth more fully in Quigley, we hold that
the Referee violated Claimant’s fundamental due process rights of notice and the
opportunity to be heard, and improperly commingled the prosecutorial and
adjudicatory functions of the Department.
We briefly consider the Board’s argument that Claimant’s
nonappearance at the Referee hearing is dispositive of her appeal. This Court
rejected this argument in Quigley, noting that it was based upon an overly technical
reading of the Department’s procedural rules that is “not appropriate where a
remedial statute such as the Law is involved.” Id. at __, slip op. at 10. See also
Gadsden v. Unemployment Compensation Board of Review, 479 A.2d 74, 76 (Pa.
Cmwlth. 1984) (“The referee then dismissed the claimant’s appeal because of her
nonappearance. We believe this was error.”). We also rejected a similar argument in
Clairton Municipal Authority v. Unemployment Compensation Board of Review, 639
A.2d 921 (Pa. Cmwlth. 1994). In that case, neither party appeared at the referee
hearing. The referee, and the Board, held that the employer’s nonappearance
constituted a failure to prove that the claimant was discharged for willful misconduct.
This Court reversed, holding that the Board erred by basing its decision on the
employer’s nonappearance. Once the referee decided to proceed in the absence of the
7
parties, “it was incumbent upon the referee and Board to render a decision based on
the ‘pertinent available records[.]’” Id. at 923 (quoting 34 Pa. Code §101.51).9
Here, the Referee committed the same legal error by holding that
Claimant’s nonappearance at the hearing was dispositive. The record contained
evidence to support the UC Service Center’s determination that Claimant was
engaged in a sideline activity. Significantly, the Referee stated: “The documents the
claimant submitted show that she owned her own business called Unique Solutions.
The claimant failed to appear at the hearing to offer competent evidence that she
qualifies for the sideline business exception to the [L]aw ….” Referee Decision at 2.
Under Gadsden and Clairton Municipal Authority, the Referee should have
considered all of the “pertinent available records,” which included not only
Claimant’s Schedule C tax form but also the Internet Initial Claims form and Sideline
Business supplement. The supplement contained evidence that Claimant’s self-
employment income had not changed and that her self-employment was not her
primary source of income. Certified Record, Item No. 2, at 4-5. The record evidence
would have informed the Referee’s consideration of whether Claimant was correct in
9
See also Davis v. Unemployment Compensation Board of Review (Pa. Cmwlth., No. 339 C.D.
2017, filed December 11, 2017) (Board’s determination based on, inter alia, claimant’s
questionnaire because neither party appeared at referee hearing); Cabrera-Kuilan v. Unemployment
Compensation Board of Review (Pa. Cmwlth., No. 463 C.D. 2013, filed August 29, 2013) (Board’s
decision based on employer’s and claimant’s completed UC Service Center questionnaires and oral
interviews because neither party appeared at referee hearing); Butler v. Unemployment
Compensation Board of Review (Pa. Cmwlth., No. 1478 C.D. 2011, filed April 4, 2012) (Board’s
determination based on employer’s separation information and claimant’s oral interview because
neither party appeared at referee hearing). An unreported memorandum opinion of this Court may
be cited “for its persuasive value, but not as binding precedent.” Section 414(a) of the
Commonwealth Court’s Internal Operating Procedures, 210 Pa. Code §69.414(a).
8
her assertion that the Department used the wrong line item on Schedule C to her
federal tax return to calculate her deduction.10
For all of the above reasons, the Board’s order is vacated and the matter
is remanded to the Board to remand to a referee to determine whether Claimant’s
sideline activity deduction was properly calculated.11
_____________________________________
MARY HANNAH LEAVITT, President Judge
10
The dissent states that “based on the referee’s legal conclusion, the Majority infers that he failed
to conduct a careful review of the competent documentary evidence.” __ A.3d at __, slip op. at 10
(Wojcik, J., dissenting). The Referee’s decision contained the boilerplate and self-serving
phraseology that he conducted a “careful review of the competent documentary evidence,” but the
decision itself does not bear this out. Referee Decision at 2. The only factual finding based on the
documents was that Claimant owned her own business called Unique Solutions. The Referee made
no reference to Claimant’s Schedule C tax form, Internet Initial Claims form or Sideline Business
supplement. This is particularly problematic with respect to Claimant’s Schedule C tax form
because Claimant’s appeal asserted that the UC Service Center took the gross income number from
that form and not the net income number, which was the only number relevant to her benefit
calculation. At a minimum, the Referee should have explained why the information in the
documents he omitted from his decision was deficient or entitled to little weight.
It bears noting that if a referee is unable to reach a decision based on the pertinent available
records, the proper disposition is to dismiss the appeal rather than rule on the merits based on a lack
of evidence. At most, therefore, the Referee could have dismissed Claimant’s appeal, as opposed to
reducing her benefits to zero.
11
Based on the disposition of Claimant’s first issue, we do not reach Claimant’s second issue
regarding whether she had good cause for not attending the Referee’s hearing. Because the Referee
and the Board both failed to base their decisions on the pertinent available records, and both
addressed the eligibility issue (which was not raised), whether Claimant had proper cause for not
appearing at the Referee hearing is inconsequential to our decision.
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Terri L. Macauley, :
Petitioner :
:
v. : No. 858 C.D. 2017
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 28th day of January, 2020, the Unemployment
Compensation Board of Review’s (Board) May 15, 2017, order is vacated, and the
matter is remanded to the Board to remand to a referee to determine whether Terri L.
Macauley’s sideline activity deduction was properly calculated.
Jurisdiction relinquished.
_____________________________________
MARY HANNAH LEAVITT, President Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Terri L. Macauley, :
:
Petitioner :
:
v. : No. 858 C.D. 2017
: Submitted: March 13, 2019
:
Unemployment Compensation :
Board of Review, :
:
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
DISSENTING OPINION
BY JUDGE WOJCIK FILED: January 28, 2020
Respectfully, I dissent.
Terri L. Macauley (Claimant) petitions pro se for review of the May
15, 2017 order of the Unemployment Compensation Board of Review (Board)
affirming a referee’s determination and holding that Claimant was ineligible for
benefits under Section 402(h) of the Unemployment Compensation Law (Law).1
The essence of Claimant’s argument is that the determination of her eligibility was
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§802(h).
made by a referee in 2016 and should not have been revisited in 2017, when she
sought review only of the job center’s calculation of her benefits. After Claimant
appealed the job center’s determination, she failed to attend the referee’s hearing.
As a result, she did not present sufficient evidence to meet her burden of proving
eligibility under Section 402(h). Claimant did not ask the Board to reopen the
record, and she does not argue that the Board erred in denying her an opportunity to
present evidence. She cites no authority to support a remand. Nevertheless, the
Majority holds that Claimant was precluded from appealing the issue of her
eligibility, vacates the decision below, and remands the matter to the Board to
determine whether income from Claimant’s sideline activity was properly
calculated. In contrast to the Majority’s analysis, I would follow longstanding and
binding precedent to affirm the Board’s order, recognizing that even a minor
deviation from settled law in order to remedy a perceived injustice for one appellant
will surely result in a denial of justice for those prospective parties who, at a
minimum, seek to rely on such precedent.
When Claimant applied for unemployment compensation benefits in
January 2017, she noted that she was engaged in self-employment. The local service
center determined that Claimant was not ineligible for benefits under Section 402(h)
because her self-employment was a sideline business. The local service center then
relied on Claimant’s gross income, as reflected on Schedule C of her 2016 tax form,
to determine the prorated weekly amount to be deducted from Claimant’s benefits.
Claimant appealed, asserting that the local service center had calculated
her prorated weekly deductible incorrectly. Specifically, Claimant cited a March
2016 referee’s decision that calculated her weekly deductible based on her net
income, as reflected on her 2015 1040 Schedule C, line 31. Claimant asserted that
MHW - 2
the local service center erred in its 2017 determination by relying instead on her
gross income to calculate her weekly deductible.
Claimant received a notice of hearing, dated March 7, 2017, informing
her of the appeal hearing’s scheduled date and time. The notice clearly stated that
the specific issue to be considered at the appeal hearing was whether Claimant was
engaged in self-employment. Claimant bore the burden to show that her self-
employment falls under what is commonly known as the “sideline business
exception” pursuant to Section 402(h).2 O’Hara v. Unemployment Compensation
Board of Review, 648 A.2d 1311, 1313 (Pa. Cmwlth. 1994).
Claimant did not appear at the referee’s hearing.3 Citing his review of
the “competent documentary evidence,” the referee made two findings of fact: 1)
Claimant owns a business, Unique Selections; and 2) Claimant applied for
unemployment compensation benefits on January 15, 2017. Referee’s decision at 2.
The referee determined that the documents Claimant submitted establish that she
owns a business, but that Claimant failed to offer evidence that she qualifies for the
sideline business exception under Section 402(h). Therefore, the referee concluded
2
A claimant engaged in self-employment may not be disqualified from receiving
unemployment compensation benefits under Section 402(h) of the Law if the following conditions
are satisfied: (1) the self-employment began prior to the termination of the claimant’s full-time
employment; (2) the self-employment continued without substantial change after termination; (3)
the claimant remained available for full-time employment; and (4) the self-employment was not
the primary source of the claimant’s livelihood. FSI Trading Co. v. Unemployment Compensation
Board of Review, 627 A.2d 270, 272 (Pa. Cmwlth. 1993).
3
“If a party notified of the date, hour and place of a hearing fails to attend a hearing without
proper cause, the hearing may be held in his absence. In the absence of all parties, the decision
may be based upon the pertinent available records. The tribunal may take such other action as
may be deemed appropriate.” 34 Pa. Code §101.51.
MHW - 3
that Claimant was ineligible for unemployment compensation benefits and reversed
the service center’s determination.
Claimant appealed to the Board. In her appeal petition, she stated:
I was unable to attend my 3-21-17 hearing and I sincerely
apologize. However, my appeal was for a clarification of
[the] weekly amount I was receiving and as a result my
benefits were revoked. I was approved for benefits on 3-
16-2016 at a hearing so I am confused.
Record Item 10 (emphasis added). Unfortunately, Claimant did not provide any
reason for her non-appearance. Also unfortunately, Claimant did not request another
opportunity to offer evidence.4 Consequently, Claimant did not present any
testimony or other competent evidence regarding whether she satisfied the four-part
test that her self-employment business was non-disqualifying. See FSI Trading Co.
v. Unemployment Compensation Board of Review, 627 A.2d 270, 272 (Pa. Cmwlth.
1993).
The Board affirmed the referee’s decision, adopting and incorporating
the referee’s findings and conclusions of law. Our scope of review requires that we
affirm the Board’s decision unless constitutional rights were violated, an error of law
was committed, or necessary findings of fact are not supported by substantial
evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. §704; Simmons
v. Unemployment Compensation Board of Review, 565 A.2d 829, 832 n.4 (Pa.
Cmwlth. 1989). Given the absence of competent record evidence that the time
Claimant devoted to her self-employment had not significantly increased, that
Claimant’s self-employment income had not changed, and that her self-employment
4
The Board may grant a request for reconsideration and rehearing where there is good
cause. 34 Pa. Code §101.111.
MHW - 4
was not her primary source of income, the Board’s determination is supported by the
record. FSI Trading Co.
The Majority contends that the referee “[did] not allow [Claimant] to
present evidence.” Majority, slip op. at 6. As this statement confirms, the Majority
misinterprets the unfortunate result of Claimant’s inaction as reflecting a denial of
due process.5 In doing so, the Majority reasons that Claimant, who was pro se, “was
not informed” that her appeal of the deduction amount “would place her very
eligibility for benefits at issue.” Majority slip op. at 4-5 (emphasis added).
However, the record belies this statement, as the hearing notice expressly informed
Claimant that the specific issue to be considered in the appeal hearing was whether
Claimant was engaged in self-employment. Record Item 5.
5
The Pennsylvania Unemployment Compensation Handbook, informs claimants as
follows:
You may appeal a UC service center determination within 15 days
of the mailing date of the determination. Follow the appeal
instructions that accompany the determination. Your appeal will
result in a hearing before a referee, usually within 30 days after you
file your appeal. Approximately seven to ten days before the
hearing date, the referee’s office will mail you a hearing notice with
the date and time of your hearing and other instructions. The referee
will make a decision based on the testimony and [other] evidence
presented at the hearing. You should present all of your evidence at
the hearing because it is your only opportunity to do so. You should
receive a decision from the referee within two weeks of the hearing
date. . . .
The UC Board of Review will render a decision based upon the
evidence that was presented at the hearing before the Referee.
https://www.uc.pa.gov/unemployment-benefits/handbook/Pages/default.aspx (Last visited
December 16, 2019.)
MHW - 5
In Claimant’s petition for review, she asserts that a referee found her
eligible for benefits in 2016 and calculated her net income properly under 34 Pa.
Code §65.121. She contends that when she applied again in 2017, the referee
calculated the weekly deduction incorrectly and failed to rely on the net income
reflected on her 2016 Schedule C.6 Claimant asserts that she appealed in order “to
clarify a math miscalculation, not to determine my benefit eligibility.” Petition for
Review ¶¶1-4.
In her appellate brief, Claimant raises three issues: 1) whether the Board
erred in misunderstanding the nature of her appeal request; 2) whether the Board
erred in finding that she is ineligible for benefits based on her sideline business; and
3) whether Claimant was able to attend the hearing scheduled for March 21, 2017.7
Claimant’s brief, Statement of Questions Involved.
Claimant argues that the Board erred in misunderstanding the nature of
her appeal and that the issue decided by the referee was different from, and irrelevant
to, the issue stated on her appeal form. Addressing this issue, the Majority reasons
6
Citing Lerch v. Unemployment Compensation Board of Review, 180 A.3d 545 (Pa.
Cmwlth. 2018), the Majority concludes that this matter “must be remanded” because “it is
apparent” that the local service center relied on an unauthorized and unreasonable regulation in
calculating Claimant’s deduction. Majority slip op. at 2-3 n.5 (emphasis added). However, in
contrast to the facts before us, the claimant in Lerch specifically challenged the validity of the
regulation at 34 Pa. Code §65.121, which limited the deductions from gross income that could be
used to calculate net income. Here, the Majority sua sponte raises the holding in Lerch. It then
determines that a case regarding the computation of net income applies to Claimant’s different
contention, which is that her net income, rather than gross income, should have been used in the
calculation of her deductible.
7
For the first time, Claimant contends that her absence at the referee’s hearing was the
result of her daughter’s school delay, which required her to drive her daughter to school and caused
her to miss the hearing. Had Claimant presented these assertions in her appeal to the Board, the
Board might have construed her argument as a request for a rehearing or reopening of the record.
34 Pa. Code §101.111. However, Claimant failed to raise this issue in her appeal to the Board. As
a result, this issue is waived on appeal to this Court. Pa. R.A.P. 1551(a).
MHW - 6
that because Claimant was unaware that filing an appeal to the referee would risk
her eligibility determination, this Court may deviate from that well-settled law.
It is well-established that on appeal from a determination of the local
service center, the referee or Board is limited to consideration of “the issues
expressly ruled upon” by the local service center, unless the parties agree otherwise.
34 Pa. Code §101.87; Bilsing v. Unemployment Compensation Board of Review, 382
A.2d 1279, 1280-81 (Pa. Cmwlth. 1978).
The regulation states:
When an appeal is taken from a decision of the
Department, the Department shall be deemed to have ruled
upon all matters and questions pertaining to the claim. In
hearing the appeal the tribunal shall consider the issues
expressly ruled upon in the decision from which the appeal
was filed. However, any issue in the case may, with the
approval of the parties, be heard, if the speedy
administration of justice, without prejudice to any party,
will be substantially served thereby.
34 Pa. Code §101.87. Additionally, when the notice of hearing advises a claimant
of the specific issue to be considered at the referee’s hearing, the claimant has been
apprised of the issue and is not unfairly surprised. See Simmons v. Unemployment
Compensation Board of Review, 565 A.2d 829, 831-32 (Pa. Cmwlth. 1989) (holding
that where the notice of hearing indicated that the specific issue to be considered was
whether the claimant’s unemployment was the result of willful misconduct, the
claimant was duly informed of the defense prior to the hearing and was not unfairly
surprised).
In Lenz v. Unemployment Compensation Board of Review, 432 A.2d
1149 (Pa. Cmwlth. 1981), the local service center ruled that the claimant was not
ineligible for benefits under Section 402(b) of the Law because she had good cause
for voluntarily leaving her employment, but held that she was ineligible under
MHW - 7
Section 401(d)(1) because she was not available for work. The claimant appealed,
and a referee concluded that the claimant was ineligible under Section 402(b) of the
Law. The Board affirmed the referee’s decision.
On further appeal, this Court affirmed, stating:
We recognize that the claimant probably did not intend to
reopen the inquiry into her cause for leaving employment,
for that issue involving Section 402(b) had been resolved
in her favor by [the local job center], but this issue had
been expressly ruled upon by the [local service center] in
its determination notice, and, according to 34 Pa. Code
§101.87, it was therefore a proper area for inquiry at the
referee’s decision.
432 A.2d at 1150 (emphasis added).
In Mazur v. Unemployment Compensation Board of Review, 193 A.3d
1132, 1135 (Pa. Cmwlth. 2018), this Court explained:
Section 101.87 of the [Board’s] Regulations specifies that,
“[i]n hearing the appeal [from the UC Service Center’s
determination,] the tribunal shall consider the issues
expressly ruled upon in the decision from which the appeal
was filed.” 34 Pa. Code §101.87. This Court has
specifically declared that although the UC Service Center
concludes in a claimant’s favor that she voluntarily left her
employment with cause of a necessitous and compelling
nature and the claimant did not intend to reopen that issue,
it remains a proper area of inquiry for the referee. Lenz v.
Unemployment Comp. Bd. of Review, [432 A.2d 1149 (Pa.
Cmwlth. 1981)]. Moreover, Section 101.107(b) of the
[Board’s] Regulations further specifies, in relevant part:
“The [Board] shall consider the issues expressly ruled
upon in the decision from which the appeal was filed.” 34
Pa. Code §101.107(b). Based thereon, this Court has held
that when a referee expressly rules on an issue, the [Board]
has jurisdiction to rule on it. Jordan v. Unemployment
Comp. Bd. of Review, [547 A.2d 811, 813 (Pa. Cmwlth.
1988)]. Accordingly, the [r]eferee in the instant matter
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properly considered whether [the claimant] had a
necessitous and compelling reason for quitting, and the
[Board] properly reviewed the [r]eferee’s decision.
193 A.3d at 1135. See also Thiessen v. Unemployment Compensation Board of
Review, 178 A.3d 255, 259-60 (Pa. Cmwlth. 2018); Ductmate Industries, Inc. v.
Unemployment Compensation Board of Review, 949 A.2d 338, 343 (Pa. Cmwlth.
2008); Black Lick Trucking, Inc. v. Unemployment Compensation Board of Review,
667 A.2d 454, 458 (Pa. Cmwlth. 1995); Jordan, 547 A.2d at 813; Wilder & Miller,
P.C. v. Unemployment Compensation Board of Review, 525 A.2d 852, 855 (Pa.
Cmwlth. 1987).
Similarly, here, although Claimant intended to appeal only the prorated
deductible amount, the local service center determined her ineligibility under
Section 402(h) and made findings to that effect. Therefore, the referee did not err in
analyzing her ineligibility under Section 402(h), and the Board properly affirmed the
referee’s decision. The Majority’s holding, insofar as it establishes an “enlarging
the scope of appeal” doctrine, squarely conflicts with our precedent, which, I submit,
remains binding unless and until it is expressly overruled.
Claimant’s remaining argument is that the Board erred in determining
that she was ineligible under Section 402(h).8 In support of this argument, Claimant
8
Section 402(h) provides that an employee shall be ineligible for compensation for any
week:
(h) In which he is engaged in self-employment: Provided, however,
That an employe who is able and available for full-time work shall
be deemed not engaged in self-employment by reason of continued
participation without substantial change during a period of
unemployment in any activity . . . undertaken while customarily
employed by an employer in full-time work . . . and continued
subsequent to separation from such work when such activity is not
engaged in as a primary source of livelihood. Net earnings received
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relies on the March 16, 2016 referee’s determination that her business was a non-
disqualifying sideline business. That decision is not a part of this record, nor is the
evidence upon which it is based. Moreover, a decision as to eligibility in one claim
period is not conclusive as to eligibility in a separate and distinct claim period. High
v. Unemployment Compensation Board of Review, 479 A.2d 967, 968-69 (Pa.
1984).9
The Majority recognizes the referee’s authority to decide a matter based
upon the pertinent available records. 34 Pa. Code §101.51. However, based on the
referee’s legal conclusion, the Majority infers that he failed to conduct a careful
review of the competent documentary evidence. But see Referee’s decision at 2. I
believe the Majority misinterprets the referee’s assessment of hearsay statements as
a capricious disregard of competent evidence. Further, in doing so the Majority
implicitly determines that the hearsay statements in Claimant’s initial claims form
would, if credited, support additional findings of fact.
The propriety of that analysis aside, the records submitted to the
Department included Claimant’s 2016 1040, Schedule C tax form, which was
consistent with Claimant’s representations about the income she had derived from
her self-employment. The Majority does not identify competent evidence regarding
the time Claimant spent on her self-employment business after her separation from
by the employe with respect to such activity shall be deemed
remuneration paid or payable with respect to such period as shall be
determined by rules and regulations of the department.
43 P.S. §802(h).
9
Accepting Claimant’s argument that the 2016 referee’s decision already decided that her
self-employment was a sideline business activity would disregard this well-settled principle and
would render her not disqualified for benefits under section 402(h) in perpetuity.
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Goodwill. See Risse v. Unemployment Compensation Board of Review, 35 A.3d 79,
82 (Pa. Cmwlth. 2012); LaChance v. Unemployment Compensation Board of
Review, 987 A.2d 167, 171 (Pa. Cmwlth. 2009).10 Absent evidence reflecting that
Claimant’s self-employment continued without substantial change, a remand for
reconsideration of that same evidence is unwarranted and would serve no purpose.
Risse; LaChance.
To overcome the evidentiary deficiency, the Majority relies on Quigley
v. Unemployment Compensation Board of Review, ___ A.3d ___ (Pa. Cmwlth. No.
1449 C.D. 2017, filed January 28, 2020), which, in my view, inexplicably held that
imputing knowledge of the Board’s published regulations to a claimant frustrates the
Law’s remedial and humanitarian purposes.11 As in Quigley, the Majority holds that
10
In Risse, we explained that in determining whether a claimant’s self-employment
substantially changed after his full-time employment ended, the focus is on whether the claimant
was working in the sideline activity for significantly more hours than he did prior to his separation.
We held that the Board erred in relying on the significant increase in the claimant’s earnings from
his sideline activity and that, where there was no change in the claimant’s self-employment
activities, the increase in earnings after his separation was not sufficient to establish that the
claimant was transitioning a sideline activity to full-time employment.
In LaChance, we acknowledged the rule that “claimants who engage in business
and the solicitation of clients have been viewed as self-employed, regardless of whether the
claimants received any income from those efforts.” 987 A.2d at 173 (citation omitted). We held
that where the claimant had significantly increased the amount of time he spent in his sideline
business, the fact that he generated no income did not preclude a determination that he was
ineligible for unemployment benefits under Section 402(h) of the Law. Id.
11
In Quigley, the claimant appealed the calculation of an award of benefits under Section
402(h) but did not appear at the referee’s hearing. The referee affirmed, and the claimant appealed
to the Board, challenging only the benefit amount. The Board reversed the referee’s decision,
holding that, because the claimant failed to present evidence at the hearing, she did not meet her
burden to demonstrate eligibility under section 402(h) of the Law.
The claimant in Quigley did not, as the Majority states, argue that the Board lacks the
authority to sua sponte change the scope of a claimant’s appeal. Indeed, in Quigley the claimant’s
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an appellant who fails to attend a scheduled hearing and does not request another
opportunity to present evidence has been deprived of her right to due process. This
is absurd.
Ironically, after alleging the referee erred by sua sponte addressing
Claimant’s eligibility for benefits, and despite this Court’s limited scope of appellate
review, the Majority sua sponte holds that by addressing the issue of Claimant’s
eligibility, the referee acted in a prosecutorial role and improperly comingled the
prosecutorial and adjudicatory functions of the Department. Again, this is a
conclusion squarely in conflict with our precedent under 34 Pa. Code §101.87.12
Finally, overlooking Claimant’s opportunities to present evidence (such
as by attending the hearing, requesting a continuance, requesting reopening of the
record) as well as her failure to raise a cognizable issue to the Board, the Majority
inexplicably disregards the fundamental precept of issue preservation. Pa. R.A.P.
1551. That Claimant is pro se does not support excusing her legally insufficient
effort to correct the error she alleges. Simply, the inadequacy of a pro se litigant’s
efforts does not compel the conclusion that due process was denied. Indeed, we have
repeatedly held that a pro se litigant is not entitled to more deference than a
counseled party.
petition for review asserted that the Board’s decision “was not fair,” and her brief argued that the
Board’s determination that she was ineligible for benefits “was incorrect.” Ironically, the majority
opinion in Quigley sua sponte raises both the question of the Board’s authority and the comingling
of prosecutorial functions.
12
See also Powell v. Unemployment Compensation Board of Review (Pa. Cmwlth., No.
1418 C.D. 2017, filed February 1, 2019) (rejecting the assertion that the relationships among the
department, referees and Board implicate due process concerns under Lyness v. State Board of
Medicine, 605 A.2d 1204 (Pa. 1992)).
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Here, however, the Majority sympathetically responds to the result of
Claimant’s uncounseled efforts by overlooking the remedies that were available to
her, and by absolving Claimant from consequences of rules that would
unquestionably apply to a counseled litigant. I submit that such straining of
applicable legal principles to offer relief risks injury to the law and implicates equal
protection.
I note that while the Law itself is comparatively straightforward, its
application frequently involves sympathetic claimants and circumstances in which
this Court “is constrained” to be faithful to the statute and this Court’s precedent.
This is another such case.
Accordingly, I would affirm the Board’s decision.
MICHAEL H. WOJCIK, Judge
Judge Cohn Jubelirer joins in this dissent.
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