M. Collins v. UCBR

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Mariana Collins, :
Petitioner :
:
v. : No. 754 C.D. 2021
: Submitted: February 11, 2022
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE STACY WALLACE, Judge
OPINION BY
PRESIDENT JUDGE COHN JUBELIRER FILED: August 9, 2022
Mariana Collins (Claimant), pro se, petitions for review of the May 27, 2021
Order of the Unemployment Compensation (UC) Board of Review (Board), which
affirmed a Referee’s Decision finding Claimant ineligible for UC benefits pursuant
to Section 402(h) of the UC Law (Law),1 43 P.S. § 802(h). On appeal, Claimant
argues that her actions in setting up a limited liability company (LLC) to sell items,
which she created as a hobby, on the internet to make extra money was insufficient
to constitute self-employment under Section 4(l)(2)(B) of the Law, 43 P.S.
§ 753(l)(2)(B), so as to render her ineligible for the UC benefits she had been
receiving from a prior position. Because we conclude that Claimant’s conduct did
not rise to customary involvement in an independently established business as a
matter of law, we reverse.
1
Act of December 5, 1936, as amended, 43 P.S. § 802(h) (providing, in relevant part, that
“[a]n employe shall be ineligible for compensation for any week” “in which [the employe] is
engaged in self-employment”).
I. BACKGROUND
Claimant filed a claim for UC benefits on May 6, 2020, based on a separation
from her position as an audiologist with Pinnacle ENT Associates LLC (Pinnacle),
with her last day of work being January 30, 2019. (Certified Record (C.R) Item 2 at
1-2.) Claimant previously received UC benefits based on her separation from
Pinnacle. (C.R. Item 6 at 6-7.) In a supplemental information form, titled “Owner
Business,” Claimant indicated that she opened an online business on March 9, 2020,
that sold goods and services and advertised online beginning May 6, 2020. (C.R.
Item 2 at 4-5.) In a second supplemental information form, Claimant indicated that
she had previously worked part time as an adjunct instructor for West Chester
University (WCU), but her services were not renewed as she was “[n]ot needed.”
(Id. at 7.)
A UC Service Center issued a notice of determination, finding Claimant
ineligible for benefits under Section 402(h) of the Law based on the conclusion that
Claimant engaged in self-employment. (C.R. Item 5 at 1.) Claimant appealed,
stating that she
filed for [the] initial [UC] benefits on February 1, 2019. At that time,
[she] informed the state of Pennsylvania that [she] would be working
at WCU part time. It was established that during the fiscal year of 2018
[she] earned approximately $90,000 in gross salary from [Pinnacle] as
[it] was [her] main employer. [She] received [UC] benefits . . . until
the funds for 2019 were exhausted. . . . The letter of exhaustion stated
that if [she] w[as] still unemployed in 2020 that after February 1[,] 2020
[she] would be able to claim [UC] benefits again from [Pinnacle].
WCU was never [her] main employer.
(C.R. Item 6 at 6-7.) Claimant further explained that, due to a non-compete clause,
she could not work within a 30 mile radius of any Pinnacle office and that
2
[i]n the interim of trying to find adequate employment [she] turned [her]
hobby into a side business. [She] followed all the appropriate laws to
form the business as [she] underst[oo]d the need to pay appropriate
taxes and [her] online store opened on March 9, 2020. It has brought
in a whopping $500. It is registered as an LLC because [she] sell[s]
bath teas and should someone have an allergic reaction and decide to
sue [her], [she] didn’t want to lose [her] house because [she] ha[s] no
money otherwise to pay. [She] do[es] not receive a salary from this
business. It is not successful by any means. It is merely legal on paper
and while filling out [her] unemployment [she] wanted to be fully
honest as [she] was when [she] filled out the information while working
at WCU.
(Id.)
A Referee held a hearing, at which Claimant testified regarding her
unemployment, her prior receipt of UC benefits, the expiration of those benefits, her
online business selling jewelry, the steps she took to begin that business, and her
attempts to find a position as an audiologist. (See C.R. Item 10 (Transcript) at 3-6.)
No representative from either Pinnacle or the Department of Labor and Industry
appeared in opposition to Claimant’s appeal. Based on the testimony, the Referee
made the following Findings of Fact:
1. On March 9, 2020, the Claimant started her own business.
2. The Claimant utilized the Etsy online store to sell pieces of jewelry
which the Claimant made.
3. Etsy deducted a fee to use [its] platform from the price of the jewelry.
4. The Claimant sold four pieces of jewelry.
5. The Claimant set the price of the items.
6. The Claimant formed a[n LLC] for her business named[] Ceiba Tree
LLC.
3
7. The Claimant registered her business . . . with the Department of
State [(Department)] in the Commonwealth of Pennsylvania.
8. The Claimant also opened a bank account for the business.
9. The Claimant was at risk of earning a profit or sustaining a loss based
on the performance of her business.
10. The Claimant is trained as an Audiologist but was not looking for
full-time work in her field because of a restrictive covenant placed on
the Claimant by her prior Employer[, Pinnacle,] which did not allow
her to work in her field within 30 miles of any of [Pinnacle’s] business
locations, or she would face legal action.
(Referee Decision, Findings of Fact (FOF) ¶¶ 1-10.)2 The Referee affirmed the UC
Service Center’s finding that Claimant was ineligible for benefits on the basis that
Claimant engaged in self-employment by “engag[ing] in positive acts to establish an
independent business venture.” (Referee Decision at 2.) Those steps, according to
the Referee, included Claimant’s acts of incorporating her business, registering the
business with the Department, opening a bank account for the business, and selling
four pieces of jewelry at a price that she set. (Id.) The Referee concluded that,
although the business had not yet earned a profit, “Claimant was an unemployed
businessperson,” and the Law was not intended “to compensate individuals who fail
in their business ventures.” (Id. at 2-3.)
Claimant appealed to the Board, which concluded that the Referee properly
held that Claimant engaged in self-employment through her online business and was,
therefore, ineligible for UC benefits. (Board Order.)3 Accordingly, the Board
2
The Referee’s Decision is found in the Certified Record at Item 11.
3
The Board’s Order is found in the Certified Record at Item 19.
4
adopted and incorporated the Referee’s findings and conclusions and affirmed the
Referee’s Decision. (Id.) Claimant now petitions this Court for review.4
II. DISCUSSION
A. Parties’ Arguments
Claimant argues that the Board erred in determining that she engaged in self-
employment because she “was not customarily engaged in an independently
established trade, occupation, profession[,] or business.” (Claimant’s Brief (Br.) at
11.) Claimant compares this matter to Buchanan v. Unemployment Compensation
Board of Review, 581 A.2d 1005 (Pa. Cmwlth. 1990), asserting that she is like the
claimant in Buchanan whom this Court determined was not engaged in the business
of selling jewelry on a permanent basis where the claimant set up a booth at a weekly
flea market and spent his own money to purchase tools and supplies. Claimant
contends her activities on Etsy should not render her ineligible for UC benefits
because, although she registered her business as an LLC and set up a bank account,
selling only four necklaces as a way to earn extra money on the side, without any
intent to make a living from that activity, does not rise to the level of being
customarily engaged in the business. Claimant alternatively requests that the matter
be remanded because the Referee did not sufficiently develop the record and asserts
that the Board did not address the legal arguments she raised on appeal.
The Board responds that the law is well settled that UC benefits may not be
used “to fund an individual’s start up business” and that “[w]hen an individual takes
“Our review of the Board’s decision is limited to determining whether an error of law
4
was committed, [whether] constitutional rights were violated, or [whether] necessary findings of
fact were supported by substantial evidence.” Doyle v. Unemployment Comp. Bd. of Rev., 58 A.3d
1288, 1291 n.2 (Pa. Cmwlth. 2013).
5
positive steps to start their own business, they become self-employed and ineligible
for such benefits.” (Board’s Br. at 4.) Relying on Leary v. Unemployment
Compensation Board of Review, 322 A.2d 749 (Pa. Cmwlth. 1974), and Salamak v.
Unemployment Compensation Board of Review, 497 A.2d 951 (Pa. Cmwlth. 1985),
the Board asserts that the date of incorporation or registration is the date a claimant’s
self-employment begins because, “while . . . not the final act in establishing an
independent business enterprise, it [is] clearly a positive act towards that end.” (Id.
at 7.) Further, the Board contends, this Court has found a claimant is engaged in
self-employment and ineligible for benefits where the claimant establishes and
advertises a new business and actively performs services for that business. (Id. at 8
(citing Balmer v. Unemployment Comp. Bd. of Rev., 368 A.2d 1349 (Pa. Cmwlth.
1977)).) The Board argues that Claimant’s actions reflect her establishing a new
business and performing services in an attempt to earn a profit and constitute
sufficient “positive steps toward establishing an independent business” that render
Claimant ineligible for UC benefits. (Id. at 9.) The Board asserts that Claimant’s
reliance on Buchanan is misplaced because, there, the claimant did not establish a
corporation for the purpose of selling jewelry, which this Court has used to
distinguish Buchanan in two unreported opinions.5 (Id. at 10-11 (citing Coleman v.
Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No. 210 C.D. 2016, filed Dec. 21,
2016), and Banyas v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., Nos. 521 &
522 C.D. 2009, filed Oct. 14, 2009)).) The Board further asserts that Buchanan is
distinguishable because Claimant took steps to establish her business beyond just
selling her merchandise.
5
Pursuant to Pennsylvania Rule of Appellate Procedure 126(b), Pa.R.A.P. 126(b), and
Section 414(a) of this Court’s Internal Operating Procedures, 210 Pa. Code § 69.414(a), an
unreported opinion may be cited as persuasive.
6
As to Claimant’s alternative arguments, the Board posits that Claimant waived
any argument regarding the Referee’s alleged failure to develop the record by not
raising that issue on appeal to the Board. Further, because she did not raise the issue
of the Board’s failure to address her legal arguments in the Statement of the
Questions Involved portion of her brief, the Board asserts that Claimant also waived
this issue. (Board’s Br. at 12.)
B. Analysis
Under Section 402(h) of the Law, a claimant is ineligible for UC benefits for
any week “[i]n which [s]he is engaged in self-employment.” 43 P.S. § 802(h).
Whether a UC claimant is self-employed and ineligible for benefits is a question of
law subject to plenary review by this Court. Frimet v. Unemployment Comp. Bd. of
Rev., 78 A.3d 21, 25 (Pa. Cmwlth. 2013). In considering this legal issue, we must
remember “the . . . Law is a remedial statute, and . . . its provisions must be liberally
construed and broadly construed so that its objectives (insuring that employees who
become unemployed through no fault of their own are provided with some
semblance of economic security) may be completely achieved.” A Special Touch v.
Dep’t of Lab. & Indus., 228 A.3d 489, 503 (Pa. 2020) (quoting Wedner v.
Unemployment Comp. Bd. of Rev., 296 A.2d 792, 796 (Pa. 1972)).
The Law “does not define the term ‘self-employment.’ Yet, the determination
that an individual is self-employed is highly consequential” because an “individual
who is otherwise eligible for benefits due to separation from employment receives
no benefits for any week of self-employment.” Lowman v. Unemployment Comp.
Bd. of Rev., 235 A.3d 278, 281 (Pa. 2020). That is the situation here – Claimant was
eligible for UC benefits based on her separation from Pinnacle, but the finding of
self-employment rendered her ineligible. “Whether an individual is self-employed,
7
as the term is used in [Section 402(h)] is to be determined through application of the
control and independence factors in Section [4](l)(2)(B)” of the Law, which defines
the term “employment.” Id. at 298. In relevant part, Section 4(l)(2)(B) provides:
Services performed by an individual for wages shall be deemed to be
employment subject to this act, unless and until it is shown to the
satisfaction of the department that--(a) such individual has been and
will continue to be free from control or direction over the
performance of such services both under his contract of service and in
fact; and (b) 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) (emphasis added). “The Act treats ‘services performed by an
individual for wages’ as employment until it is proven that the individual is not
subject to control and is customarily engaged in an independently established trade,
occupation, profession or business.” Lowman, 235 A.3d at 297 (emphasis added).
This test is often referred to as a two-prong test. The legal determination of whether
a claimant is self-employed is to be made on the unique facts of each case, with no
one circumstance being dispositive. Id. at 289, 302-03; Humanus Corp. v.
Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No. 307 C.D. 2019, filed May 13,
2020), slip op. at 11.
As to the first prong, which requires that the individual be “free from control
and direction,” “the evidence must show that the claimant is ‘not subject to control
or direction’” of another person or entity. Lowman, 235 A.3d at 300 (quoting 43
P.S. § 753(l)(2)(B)(a)). In situations where the disqualifying self-employment is due
to a claimant allegedly having started their own business, the control factor is
necessarily satisfied. Buchanan, 581 A.2d at 1007. For example, here, Claimant’s
testimony established that she had control over the online business and “ha[d]
8
acquired the traditional trappings of a business.” Lowman, 235 A.3d at 302.
Accordingly, Claimant was “free from control or direction over the performance of
such services . . . in fact.” 43 P.S. § 753(l)(2)(B).
As to the second prong, which requires that the individual be “customarily
engaged” “in an independently established trade, occupation, or business,” the
Supreme Court explained that these are separate inquiries and that both must be
satisfied to show that the claimant is engaged in self-employment. Lowman, 235
A.3d at 300. The “independently established” component shares the factors related
to the control factor, as well as additional considerations. Id. at 302 (citing Danielle
Viktor, Ltd. v. Dep’t of Lab. & Indus., Bureau of Emp. Tax Ops., 892 A.2d 781, 797-
98 (Pa. 2006)).6 Again, in situations where, as here, the disqualifying self-
employment is due to the claimant allegedly having started their own business, the
independently established part of the second prong is satisfied.
In addressing the “customarily engaged” component, the Supreme Court has
looked to the definitions of “customary” as meaning “commonly practiced, used, or
observed,” and “engage” as meaning “to employ or involve oneself; to take part in;
6
These considerations include: “(1) whether the individual is able to work for more than
one entity; (2) whether the individual depends on the existence of the entity for ongoing work; and
(3) whether the individual was hired on a job-to-job basis and could refuse any assignment.”
Lowman, 235 A.3d at 302. The Supreme Court cautioned, however, that this list is not exclusive
and no one factor is dispositive, explaining that
[w]hile the independence factor may be established through evidence that the
claimant has acquired the traditional trappings of a business, e.g., a license, a lease,
an ownership interest in the assets of a trade or business, business cards, clients,
advertising, and/or evidence related to the other factors considered by this Court in
Danielle Viktor, . . . no one circumstance is dispositive, and each case must be
addressed on its unique facts.
Id. at 302-03.
9
to embark on.” Id. at 301 (quoting Staffmore, LLC v. Unemployment Comp. Bd. of
Rev., 92 A.3d 844, 847 (Pa. Cmwlth. 2014) (internal quotation marks omitted)).
Based on those definitions, the Supreme Court stated that “the fact that an
unemployed person . . . accept[s] 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.” Id. (quoting Silver v.
Unemployment Comp. Bd. of Rev., 34 A.3d 893, 898 (Pa. Cmwlth. 2011)) (emphasis
added). Thus, relevant to determining whether Claimant is customarily engaged
under Section 4(l)(2)(B) of the Law is an examination of whether she engaged in the
alleged disqualifying work activity only occasionally.
Further, the Supreme Court advised that the analysis should focus on the
conduct that actually occurred, not hypothetical or theoretical conduct. Lowman,
235 A.3d at 303. The Court stated:
[i]n the context of determining whether an individual is engaged in self-
employment and therefore, ineligible for benefits, an analysis using
Section [4](l)(2)(B) does not evaluate what a claimant could do, but
what [s]he has done and/or is doing in terms of providing personal
services for remuneration. Looking at a claimant’s real-time activities
through the lens of Section [4](l)(2)(B) avoids speculation based on
hypothetical considerations and aids in evaluating a claimant’s actual
status for eligibility purposes.
Id. Therefore, in analyzing whether Claimant’s conduct constitutes self-
employment, we must examine her real-time activity and avoid hypothetical
speculation about what activities she could have engaged in.
After setting forth the above test in Lowman, the Supreme Court recognized
that Lowman was a situation involving independent contractors, which differed from
instances “where the personal services are performed by an individual in a stand-
10
alone context,” such as the present case. 235 A.3d at 298 & n.24. In these latter
cases, the “positive steps” analysis has traditionally been performed,7 and the
Supreme Court “express[ed] no opinion on the use of a ‘positive steps’ analysis as
a part of the test for self-employment embodied in Section [4](l)(2)(B),” as had
been done in Buchanan and Teets v. Unemployment Compensation Board of Review,
615 A.2d 987 (Pa. Cmwlth. 1992). Id. at 298 n.24 (emphasis added). Therefore, as
the Supreme Court did not disturb our precedent applying the positive steps analysis
as a part of the two-prong approach discussed in Lowman, we apply that approach
here.
Claimant likens her situation to those in Buchanan and Teets and contends
that, as in those cases, her actions do not constitute self-employment. In Buchanan,
the claimant was discharged from his position and, while receiving UC benefits,
expended $2,000 on spools of gold chain to make jewelry to sell at a flea market.
The claimant was found ineligible for benefits on the basis that he was self-
employed, but this Court reversed. We held that there was no dispute that the control
prong was satisfied because the claimant was in total control of his selling of jewelry
at the flea market. Buchanan, 581 A.2d at 1007. Turning to whether the claimant
customarily engaged in an independently established business, we concluded he was
not so engaged, reasoning:
[t]he claimant in this case did not form a corporation for the purpose of
selling jewelry. He did not advertise, list a telephone number for this
alleged business nor did he obtain insurance for his activity. The
claimant testified at the hearing before the referee that he had no intent
to sell jewelry at the flea market on a permanent basis; the activity
7
The Supreme Court rejected the use of the “positive steps” analysis in independent
contractor situations because “Section [4](l)(2)(B) requires a structured two-factor analysis of a
claimant’s personal services where they are performed within the context of a work relationship
with a third party.” Lowman, 235 A.3d at 298 & n.23.
11
was one on the side to make some extra money. If the facts of this
case had been that the claimant was selling jewelry on a more
consistent basis, or that he was moving from flea market to flea
market or was selling also out of his home, we would be more apt to
find that he had embarked on an independent business venture. We
decline, however, to find that the act of setting up a booth at a weekly
flea market constitutes customary engagement in an independently
established trade, occupation, profession or business under Section
4(l)(2)(B) of the Law.
Buchanan, 581 A.2d at 1009. Thus, for the purposes of customary engagement, we
considered whether: the claimant had incorporated or registered the business; the
claimant had advertised; the claimant had obtained insurance; the intent of the
claimant to engage in the business on a permanent basis or simply to use the business
as a means to make money on the side; the degree to which the claimant was actively
engaged in furthering the business, such as selling occasionally at a single flea
market; and whether the claimant was using his own home or property to operate the
business.
In Teets, we applied Buchanan to a different factual scenario and reached the
same result. There, the claimant was separated from her 24-year employment as an
executive and applied for UC benefits. Thereafter, the claimant attended a skincare
sales program meeting, signed an agreement to be a distributor, and paid
approximately $250 for a sales kit. The claimant engaged others to join the program
and sell items, but, ultimately, received less than six dollars as commission. After
the claimant was found ineligible for benefits due to being self-employed and the
Board affirmed, this Court reversed. In doing so, we disagreed with the referee’s
conclusion that, while the claimant’s activity would be a “side-line activity” under
the Law, the fact that the claimant did not begin the activity until after she was laid
off meant she was self-employed. Teets, 615 A.2d at 989. We stated that “the fact
12
that an activity which may generate a limited amount of income[, which is a side-
line activity,] is not undertaken while a claimant is still employed does not
automatically make [that activity] ‘self-employment.’” Id. Instead, the claimant’s
activities had to be reviewed to see if they established that the claimant was
customarily engaged. After comparing the facts in Teets to those in Buchanan, we
determined that the Teets’ claimant was not customarily engaged in an independent
trade because her activities amounted only to those of a “side[-]line activity.” Id. at
990. We explained that “[t]here was no finding and no evidence presented as to the
level of time and effort [the] claimant put into this project,” the “[c]laimant spent
only $250 on a sales kit,” and the “[c]laimant received less than $6 in income from
her activities.” Id. Accordingly, in addition to the factors in Buchanan, we also
considered the amount of money a claimant puts into the activity and the
compensation a claimant receives from the activity to determine whether a claimant
was customarily engaged in an independently established business. Applying those
factors in Teets, we held that, as a matter of law, the claimant “was not engaged in
self-employment so as to disqualify her from receiving benefits.” Id.Claimant argues that her activity of selling her jewelry and crafts online for
extra money did not rise to the level of her being customarily engaged in an
independently established business. Under these facts, we agree. As the Board
found, Claimant established an LLC, registered that LLC with the Department,
advertised her goods, and set up a bank account for the business so that she could
sell her jewelry and crafts online, (FOF ¶¶ 6-8), which suggests that this venture was
more established than those considered in Buchanan and Teets. However, when
viewed through the prism of the modern-day marketplace and against the other
factors found important in those cases, we conclude these facts are not dispositive
13
of the legal issue of whether Claimant was customarily engaged with this business
so as to make her self-employed.
Similar to the claimant in Buchanan who sold his gold jewelry on a weekly
basis at a single flea market, Claimant sold her jewelry in a single online shop, Etsy,
which Claimant described as an online shop where artists can post their goods for
sale online. (Transcript at 86.) In essence, Etsy is the online equivalent of the flea
market at which the claimant set up his booth in Buchanan. Analogous to the
claimant in Buchanan, who paid a weekly fee when he sold an item for the privilege
of selling his goods at the flea market, Claimant paid a fee to Etsy for the privilege
of selling her goods using that platform. Although Claimant indicated that she “went
through the legalities to [set up a business] correctly,” she paid only $97 to do so
and, like the claimant in Buchanan, did not obtain insurance. (Id. at 85.) Lastly,
similar to the claimant in Buchanan, Claimant’s testimony reflects that this business
was not intended to replace her permanent employment as an audiologist, but was a
means to make some money while dealing with the difficulty of the restrictive
covenant imposed by Pinnacle. This latter point was supported by the fact that
Claimant credibly testified that, by the time of the hearing, she had moved so as to
avoid the strictures of that covenant. (Id. at 86-87.)
As for Teets, here, as in that case, there was little “evidence presented as to
the level of time and effort [that C]laimant put into this project.” 615 A.2d at 990.
There was no testimony as to the amount of time or money Claimant spent in creating
her crafts or how much time she spent on the business per week. The only evidence
regarding Claimant’s expenditures was that she expended $97 to register the
business with the Department, and paid a fee to Etsy on each item sold, with the one
example being that she had to pay Etsy $25 on an item that sold for $85. And, while
14
Claimant appears to have earned as much as $500 from the 4 sales, (C.R. Item 6 at
6-7), which is more than the $6 earned by the claimant in Teets, the Court is
unconvinced that this limited income means that Claimant’s activity reflects self-
employment, rather than engaging in a side-line activity or business under Teets.
Finally, to the extent Claimant appears to have advertised her goods on social media
platforms, there is no evidence describing the extent or cost of that advertising, and
we view this as similar to the Teets’ claimant’s efforts in enlisting other people into
the pyramid sales program to sell products on, essentially, the claimant’s behalf.
As in Buchanan, “[i]f the facts of this case had been that [C]laimant was
selling jewelry on a more consistent basis,” we would be more apt to find that she
was customarily engaged in her business. Buchanan, 581 A.2d at 1009. However,
analyzing what Claimant actually “has done . . . in terms of providing personal
services for remuneration,” Lowman, 235 A.3d at 303, and considering that four
sales is far less customary than setting up a booth and selling jewelry at a flea market
every weekend, Buchanan, 581 A.2d at 1009, we conclude that Claimant was not
customarily engaged in selling her merchandise via Etsy. Moreover, the evidence
indicates that, like the claimants in Buchanan and Teets, Claimant began this venture
as a side business to generate whatever money she could while dealing with the
restrictions on her ability to obtain employment as an audiologist. As the claimant
in Buchanan testified “that he had no intent to sell jewelry at the flea market on a
permanent basis” and that “the activity was one on the side to make some extra
money,” Buchanan, 581 A.2d at 1009, the record before us reflects that Claimant
intended this business to be of a similar nature. Although Claimant did not
specifically testify as to her intent, she did testify that she was desperate to make any
income while she was unable to work her chosen career at the time, was an artist
15
who made handmade jewelry, and that Etsy provided an online medium to sell such
merchandise. Further, in the letter that Claimant attached to her appeal of the Service
Center’s denial, Claimant stated that the business was her turning her hobby into a
side business. (C.R. Item 6 at 6-7.) Under these facts, this Court concludes, as a
matter of law, that this activity amounts to more of an occasional activity generating
a limited amount of income, rather than the level of customary engagement that
would rise to the level of self-employment under Section 4(l)(2)(B) of the Law.
The Board argues that our precedent compels the opposite result, relying on
Leary, 322 A.2d at 249, Salamak, 497 A.2d at 951, and Balmer, 358 A.3d at 1349.
Because these cases are factually distinguishable, we disagree. In Leary, the
claimant was laid off from his position as a general construction superintendent.
After applying for and receiving UC benefits, the claimant formed a construction
corporation, entered into an agreement to buy a parcel of land, and then began
constructing houses. This Court held that this conduct constituted self-employment
as of the date of the incorporation, the date of the first positive move towards the
claimant establishing his own business. Next, in Salamak, 497 A.2d at 954, this
Court relied on Leary to hold that a claimant had engaged in self-employment, and
was an “unemployed businessman” where, while receiving UC benefits, he became
a one-third shareholder of a corporation, served as the corporate president, was a
member of the board of directors, received a weekly salary, and became actively
involved in the management of the business when a problem arose. Finally, in
Balmer, this Court held that a claimant who worked as an elevator mechanic for
17 1/2 years and received UC benefits after being terminated from his employment
engaged in self-employment by registering a fictitious corporate name, starting a
company servicing elevators, and actually servicing elevators. The claimant spent
16
considerable sums for startup costs, advertising, and insurance but abandoned the
business after it was not profitable. Thus, similar to the claimant in Leary, the
claimant in Balmer created a business that put his career skills to work, and spent
significant money and effort towards the business.
On the other hand, Claimant’s activity of selling her handmade merchandise
online stemmed from her hobby as an artist, and there is no evidence showing that
she spent any significant time or effort toward the venture. This is unlike the
claimants in Balmer and Leary, who created corporate entities to pursue their long-
term careers and then, respectively, engaged in extended conduct such as expending
considerable sums for operation and actually servicing elevators or entering into
major agreements for land sales and the construction of homes thereon. Further,
given the little evidence presented as to Claimant’s actual involvement with the
online business, the conduct of claimant in Salamak in sitting on the board, serving
as the president, collecting a weekly check, and involving himself in management is
more indicative of customary engagement. While the Board asserts that the common
denominator of these cases–incorporation or registration–is alone sufficient to
establish that Claimant was customarily engaged in a regularly established business,
incorporation is just one of the non-exclusive factors going to the “regularly
established” component of the independence prong. Lowman, 235 A.3d at 302-03.
Further, finding one circumstance dispositive does not comport with the case-by-
case review approved by the Supreme Court in Lowman. As such, because Leary,
Salamak, and Balmer involve claimants whose conduct rose to the level of
customary involvement, they are not inconsistent with this opinion.
Similarly, this Court’s unreported decisions in Banyas and Coleman, cited by
the Board as distinguishing Buchanan, do not compel a contrary result. In Banyas,
17
the claimant was laid off from a business loan center, had a degree in business
administration/accounting, completed a real estate salesperson examination, and
then created, registered, and provided services for a business purporting to engage
in commercial loan brokering, real estate agent services, and assistance with
residential mortgages. The claimant earned over $4,600 in commissions for his
efforts. We held that the claimant was engaged in self-employment. In Coleman,
the claimant was laid off from his profession as an emergency medical technician
and then incorporated his own ambulance business, Universal Ambulance, which
required that he obtain a license and insurance to operate. The claimant sought to
make the income from this venture his sole source of income. We held that this
conduct constituted self-employment and distinguished the claimant’s intent to
incorporate and run his business to be his primary source of income from cases that
involved the creation of a side-line business, as in Buchanan and Teets, where the
claimants had only intended to start side ventures.
In both Banyas and Coleman, the claimants created and incorporated
companies with the intent to establish a full-time venture within their chosen,
professional careers. Under those circumstances, such conduct rises to self-
employment under Section 4(l)(2)(B) of the Law. Importantly, in Coleman, this
Court recognized that simply engaging in a side-line business was not self-
employment under Section 4(l)(2)(B). Coleman, slip op. at 7-8. Here, Claimant’s
attempt to make extra income while she was unable to continue her professional
career was creating a side business out of her hobby, rather than an attempt to create
a full-time venture to replace that career.
Reviewing these cases, this situation is more akin to Buchanan and Teets, than
Leary, Salamak, Balmer, Banyas, and Coleman. While there is some evidence that
18
Claimant took more formalized steps with her business than the claimants in
Buchanan and Teets, there is no indication in the record that Claimant’s online
business was intended to replace audiology as her primary means of employment;
rather it was merely a way of turning her hobbies into extra money by selling her
crafts and jewelry at the online equivalent of a flea market. It was, as in Teets,
essentially a side-line activity or business that, even though it was begun after her
separation from Pinnacle, did not establish that Claimant was self-employed.
Holding that, as a matter of law, Claimant was not customarily engaged in an
independent business or trade under these circumstances is consistent with the well
settled principle that “the . . . Law is a remedial statute, and . . . its provisions must
be liberally construed and broadly construed so that its objectives . . . may be
completely achieved,” A Special Touch, 228 A.3d at 503, and the Supreme Court’s
recent statement that “the determination that an individual is self-employed is highly
consequential” because an “individual who is otherwise eligible for benefits due to
separation from employment receives no benefits for any week of self-employment,”
Lowman, 235 A.3d at 281. Because Claimant was not customarily engaged in an
independently established business under Section 4(l)(2)(B) of the Law, she was not
self-employed, and the Board erred as a matter of law in finding Claimant ineligible
for UC benefits on this basis.8
III. CONCLUSION
For the foregoing reasons, we reverse the Board’s Order.
__________________________________________
RENÉE COHN JUBELIRER, President Judge
8
Because we resolve this matter on this issue, we do not reach Claimant’s remaining
arguments.
19
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Mariana Collins, :
Petitioner :
:
v. : No. 754 C.D. 2021
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
NOW, August 9, 2022, the Order of the Unemployment Compensation Board
of Review, dated May 27, 2021, is REVERSED.
__________________________________________
RENÉE COHN JUBELIRER, President Judge