DeLullo v. Commonwealth

Opinion by

Judge Rogers,

Tbe Bureau of Employment Security, a referee and tbe Unemployment Compensation Board of Review each decided that the appellant, Daniel R. DeLullo, was ineligible to receive unemployment compensation benefits because in bis work for Carbon City Products, Inc. be was engaged in self-employment and therefore when be lost that work be became án unemployed businessman. Tbe decisions of tbe unemployment compensation authorities were based on the case of Starinieri Unemployment Compensation Case, 447 Pa. 256, 289 A.2d 726 (1972), and its interpretation of Section 402 of the Unemployment Compensation Law, Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802.

It will be recalled that tbe claimant in Starinieri, supra, owned less than 50% of tbe stock of tbe corporation of which be was Secretary-Treasurer and executive manager earning $140 a week, that tbe corporation was required to file' a voluntary petition in bankruptcy which led to tbe claimant’s unemployment and that tbe Supreme Court held that the proper test was not that of whether tbe employee bad control of a majority of tbe stock but whether be exercised a substantial degree of control over tbe corporation.

DeLullo owned 15% of tbe outstanding shares of stock of Carbon City Products, Inc. and appears to have been one of tbe three largest of tbe 42 shareholders. At tbe end, DeLullo was purchasing agent, operations manager, personnel manager and one of tbe seven members of tbe board of directors. His salary was $500 a week. In 1973, tbe shareholders, including DeLullo, decided to sell their shares of stock in tbe corporation. Satisfactory buyers were finally found and tbe sale of all of tbe stock was consummated on or about February 1, 1977, tbe date on which DeLullo’s association with the company in the capacities mentioned ceased. Prior to February 1,1977, DeLullo had trained persons chosen by the new owners to do his work. An employer’s representative testified at the hearing that it was “pretty much agreed upon that Mr. DeLullo . . . would not be continuing along with' the company,” and DeLullo testified that an agreement was executed between him and the buyers that he would be available for consulting at $100 per day. The basic facts are quite similar to those in Starinieri, supra, with the added, it seems to us disqualifying, element here that DeLullo as an important stockholder, officer and manager agreeing to the sale helped to bring about his own severance, as contrasted to the bankruptcy which was the occasion for the unemployment of the claimant in Starinieri, supra.

Order affirmed.

Order

And Now, this 8th day of December, 1978, the order of the Unemployment Compensation Board of Review denying benefits is affirmed.