Act Home Health Services, Inc. v. UCBR

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Act Home Health Services, Inc., :
Petitioner :
:
v. : No. 444 C.D. 2021
: SUBMITTED: January 21, 2022
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER FILED: July 18, 2022
Act Home Health Services, Inc. (Act), petitions for review from the
order of the Unemployment Compensation Board of Review affirming the Referee’s
decision granting benefits under the Unemployment Compensation Law1 to
Claimant, Princess Yvonne Kennedy. We reverse.
Claimant applied for benefits with an effective date of March 29, 2020.
The Department of Labor and Industry’s Office of Employment Security (OES)
granted benefits. Act appealed, arguing that Claimant was not an employee but an
independent contractor and that while Claimant listed a lack of work as the basis for
her entitlement to benefits, she had been unavailable for work offered by Act. A
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§ 751-
919.10.
Referee conducted a hearing at which Claimant, who appeared pro se, and witnesses
for Act, which was represented by counsel, appeared. The Referee affirmed the
determination of OES, determining that Claimant was not self-employed pursuant
to Section 402(h) of the Law, 43 P.S. § 802(h).
In her December 22, 2020 decision, the Referee found as follows.
(Referee’s Decision/Order, Findings of Fact “F.F.” Nos. 2-8.) In December 2018
Claimant signed an independent contractor agreement with Act, acknowledging that
she was an independent contractor responsible to obtain her own insurance and
responsible for her own taxes. Claimant began working for Act in May 2019
providing skilled nursing services at a pay rate of $32 per hour. Claimant determined
her own schedule and was able to refuse work as she wished. On October 22, 2019,
the Internal Revenue Service assigned an employer identification number (EIN) for
Kennedy’s Care LLC. On March 13, 2020, Claimant signed a second independent
contractor agreement with Act on behalf of Kennedy’s Care LLC, providing her EIN
instead of her social security number. Claimant was permitted to work for others
providing the same nursing services. Of key import to this case, Claimant has not
accepted shifts because she is enrolled in school.
The Referee concluded that Claimant was not self-employed because
while Act established that Claimant was free from control or direction over the
performance of her services, it did not establish that Claimant was customarily
engaged in an independently established trade or occupation. (Referee’s
Decision/Order at 2-3). With regard to the “customarily engaged” requirement, the
Referee further explained that while Claimant admitted that, at Act’s suggestion, she
obtained an EIN number in order to establish a limited liability company (LLC), she
did not advertise to anyone else and did not go to find clients on her own. (Id. at 3).
2
The Referee appears not to have considered the issue of Claimant’s ability to work
and availability for suitable work.
Act appealed to the Board, which by order dated March 29, 2021,
affirmed the Referee’s decision, adopting and incorporating the Referee’s findings
and conclusions. The Board rejected Act’s argument that Claimant was not able and
available for suitable work because she refused assignments. The Board suggested
that Act might wish to alert the Department separately and request a determination
under Section 402(a) of the Law, 43 P.S. § 802(a). Act then filed a petition for
review with this Court.
On appeal, Act raises two issues: that Claimant is not eligible for
unemployment compensation benefits because she was (1) unavailable for work and
(2) self-employed. We find Act’s first argument determinative.
Act first argues that Claimant was unavailable for work. However,
before considering this, we must consider the threshold issue raised by the Board of
whether the question of Claimant’s ability and availability for work was not properly
before the Referee and Board. The Board argues that it would have been error to
rule upon that issue without proper notice to the parties under Section 101.87 of its
regulations, which provides that when an appeal is taken from a decision of OES,
[OES] 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 (relating to issues considered on original appeal).
3
The Board points out that the record contains no notice of determination
from OES ruling upon Section 401(d)(1) of the Law, which requires one to be “able
to work and available for suitable work.” 43 P.S. § 801(d)(1). The notice of hearing
only listed Section 402(h) of the Law—that an employee shall be ineligible for
compensation for any week “in which [s]he is engaged in self-employment,” 43 P.S.
§ 802(h)—as an issue to be considered in the appeal. (R.R. at 90a.) Near the
beginning of the hearing, the Referee announced the issue was eligibility for benefits
under Section 402(h). (N.T. at 3, R.R. at 127a.) Thus, the Board argues that the
Referee on appeal may only consider those charges delineated in the hearing notice.
Act responds that the Board’s argument conflicts with our holding in
Sharp Equipment Company v. Unemployment Compensation Board of Review, 808
A.2d 1019 (Pa. Cmwlth. 2002), that Section 101.87 of the Board’s regulations “has
been interpreted to allow the [r]eferee to consider other issues so long as the claimant
is not surprised or prejudiced.” Id. at 1025 [citing Hine v. Unemployment Comp. Bd.
of Rev., 520 A.2d 102 (Pa. Cmwlth. 1987)]. In Sharp, as here, the putative employer
raised two issues in its appeal from an OES determination, but, again as here, only
one of those issues was considered by a referee and the Board because that was the
only issue considered by OES. The Board argued that it could not rule on the issue
of voluntary separation because it was not decided by the referee and that the
employer had waived the issue. We reversed, holding that because the issue of the
claimant’s voluntary separation was expressly raised in the employer’s notice of
appeal to the referee, the claimant could not claim surprise and, thus, the regulation
“did not bar the [r]eferee from considering the second issue raised by [the]
[e]mployer in its Notice of Appeal.” Id. In Sharp, we further relied upon Section
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101.107(a) of the Board’s regulations, concerning appeals from the referee, which
provides in relevant part as follows:
In connection with the consideration of an appeal to the
Board from the decision of a referee, the Board may
consider an issue in the case though not expressly ruled
upon in the decision of the Department or the referee and
though not previously raised in the claim or appeal
proceedings. However, issues not previously considered
or raised will not be considered by the Board, either upon
application for, or in the determination of an appeal unless
the speedy administration of justice, without prejudice to
any party, will be substantially served thereby and are
supported by the record.
34 Pa.Code § 101.107(a) (emphasis added). Accordingly, we concluded that the
second issue should have been decided by the Board. Id.
In Sharp, the employer raised the issue for which it sought review in its
notice of appeal of the OES determination. In its notice of appeal from OES in the
instant case, Act stated as follows:
It is also important to point out that during the period of
time Claimant claims ‘Lack of Work’ as the basis for her
‘entitlement’ to UC benefits, A[ct] had and offered her
work to perform but she refused to perform the work that
was available because she was ‘not interested’ or was
unavailable due to performing work for another agency
and/or taking classes.
(R.R. at 36a.) We agree with Act that the issue of Claimant’s ability and availability
for work was properly before the Board and should have been considered based on
the evidence of record and the findings of the Referee.
Under Section 401(d)(1) of the Law, “[c]ompensation shall be payable
to any employe who is or becomes unemployed, and who . . . [i]s able to work and
available for suitable work . . . .” 43 P.S. § 801(d)(1). A claimant is presumed to be
5
able and available for work when she applies for benefits. See Rohde v.
Unemployment Comp. Bd. of Rev., 28 A.3d 237, 243 (Pa. Cmwlth. 2011). However,
this presumption is rebuttable by evidence that a claimant has refused available
work. See Fenk v. Unemployment Comp. Bd. of Rev., 405 A.2d 590, 592 (Pa.
Cmwlth. 1979). Such evidence might include self-imposed limitations on
availability to take work offered by an employer, such as an unwillingness to work
during shifts offered, id., or where a claimant’s status as a student gives a search for
employment an unreasonably low possibility of success, see Scardina v.
Unemployment Compensation Board of Review, 537 A.2d 388, 390 (Pa. Cmwlth.
1988).
While the issue of whether a claimant seeking unemployment benefits
is available for work is generally a question of fact, some restrictions on job
availability may be so untenable or illustrative of a lack of good faith as to be
disqualifying as a matter of law. Craig v. Unemployment Comp. Bd. of Rev., 442
A.2d 400, 402 (Pa. Cmwlth. 1982). Here, the evidence and findings of the Referee
clearly indicate that the Claimant was not “able and available” for suitable work. In
one text message exchange, an Act representative asked if Claimant was still
working full-time with another agency or whether Claimant had full-time
availability to Act and Claimant responded as follows:
No I just pick up shifts. But I’m not interested in FT [full-
time] work because I go to school through the week. I’m
open in the evening everyday through this week. So any
time after 1p until 12/15 then my class schedule will
change starting end of January[.]
(R.R. at 83a.) Under questioning by Act, Claimant testified that she had been offered
new patients by Act but had turned them down because the shifts conflicted with the
times that she was either working elsewhere or was in school or were “just bad hours
6
for [her]. In regards to [her] personal life and what [she] ha[s] going on,” such as
lack of childcare (N.T. at 16, R.R. at 140a). Consistent with this evidence, the
Referee found that Claimant “determined her own schedule and was able to refuse
work as she wished” and “ha[d] not accepted shifts because she is enrolled in
school.” (Referee’s Decision/Order, F.F. No. 8.) These findings were adopted by
the Board, supported by record evidence, and are therefore binding.
Essentially, the Referee found that Claimant was not available for work,
disqualifying her from receiving benefits under Section 401(d)(1). Where a claimant
is disqualified, as here, by an explicit provision of the Law, the claimant is ineligible
for benefits. Penn Hills Sch. Dist. v. Unemployment Comp. Bd. of Rev., 437 A.2d
1213, 1215 (Pa. 1981).2
2
We do not reach Act’s second issue because we find the first determinative. Assuming
arguendo that the first issue was not determinative, we do not discern an error in the Board’s
determination that Act failed to meet its burden with respect to the independence factor of Section
4(l)(2)(b), that Claimant is “customarily engaged in an independently established trade occupation,
profession, or business.” 43 P.S. § 753(l)(2)(B). The same finding of fact which establishes that
Claimant was unavailable also undermines any potential conclusion that Claimant was so engaged.
Section 402(h) of the Law provides in pertinent part as follows: “[a]n employe shall be
ineligible for compensation for any week in which he is engaged in self-employment.” 43 P.S. §
802(h). Although the Law does not define self-employment, the courts look to the definition of
“employment” provided by Section 4(l)(2)(b), which excludes from the definition services for
wages if “as to such services such individual is customarily engaged in an independently
established trade, occupation, profession or business.” 43 P.S. § 753(l)(2)(B). “Customary” is
defined as “commonly practiced, used, or observed,” and “engage” is defined as “to employ or
involve oneself; to take part in; to embark on.” Staffmore, LLC v. Unemployment Comp. Bd. of
Rev., 92 A.3d 844, 847 (Pa. Cmwlth. 2014) [quoting Merriam-Webster’s Collegiate Dictionary
308 (11th ed. 2004) and Black’s Law Dictionary 608 (9th ed. 2009)] (emphasis omitted). Even
“the fact that an unemployed person agrees to accept, and thereafter does accept, an occasional
offer of work is simply not enough to demonstrate that said individual is customarily engaged in
an independently established trade, occupation, profession or business.” Lowman v.
Unemployment Comp. Bd. of Rev., 235 A.3d 278, 301 (Pa. 2020) [quoting Silver v. Unemployment
Comp. Bd. of Review, 34 A.3d 893, 898 (Pa. Cmwlth. 2011)]. Here, there is little evidence to
(Footnote continued on next page…)
7
Thus, having determined that the Board erred as a matter of law, we
reverse its order and find Claimant ineligible for benefits under Section 401(d)(1) of
the Law.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita
President Judge Cohn Jubelirer, Judge Fizzano Cannon, and Judge Wallace did not
participate in the decision for this case.
conclude that Claimant’s employment activities went beyond occasionally “picking up” shifts for
other companies while dedicating herself to non-employment endeavors.
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Act Home Health Services, Inc., :
Petitioner :
:
v. : No. 444 C.D. 2021
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 18th day of July, 2022, the order of
the Unemployment Compensation Board of Review awarding benefits to Claimant
is REVERSED.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita