D. Silver v. UCBR ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Deborah Silver, :
Petitioner :
:
v. : No. 1206 C.D. 2019
: Argued: June 9, 2020
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE J. ANDREW CROMPTON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE CROMPTON FILED: July 7, 2020
Deborah Silver (Claimant) petitions for review from an Order of the
Unemployment Compensation Board of Review (Board), finding her ineligible for
unemployment compensation (UC) benefits pursuant to 404(c) of the UC (Law).1
Certified Record (C.R.), Item No. 7. Claimant argues that her work as an arbitrator
should count toward her weeks of eligibility for receiving UC benefits. Discerning
no error below, we affirm.
On May 5, 2019, Claimant filed an application for UC benefits, which
the local service center denied because Claimant did not have enough credit weeks2
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§804(c).
2
Section 4(g.1) of the Law, 43 P.S. §753(g.1), states, in pertinent part, that a “[c]redit
week” is “any calendar week in an individual’s base year with respect to which she was paid in
in her base year3 of January 1, 2018, through December 31, 2018, to qualify for UC
benefits.4 Id. Claimant appealed, and a UC referee conducted a hearing, at which
Claimant testified, on June 26, 2019. The referee determined Claimant was
ineligible for benefits because the remuneration she received from the Philadelphia
Arbitration Center (PAC) and the Delaware County/Media Arbitration Center
(DCAC) did not count as “covered wages” from employment as defined in the Law.
C.R., Item No. 13. However, the referee modified the service center’s determination
to reflect that Claimant earned 14 credit weeks, rather than 12, during her base year.
Nonetheless, Claimant still did not meet the threshold of 18 credit weeks necessary
to be eligible for UC benefits.
The referee made the following findings of fact:
employment…remuneration of not less than: (1) One hundred and sixteen dollars ($116) . . . . (2)
Sixteen (16) times the minimum hourly wage required by the act of January 17, 1968 (P.L.11,
No.5), known as ‘The Minimum Wage Act of 1968. . . .’”
3
“Base year” is defined in the Law as follows: “the first four of the last five completed
calendar quarters immediately preceding the first day of an individual’s benefit year.” Section
4(a) of the Law, 43 P.S. §753.
4
Section 404(c) of the Law, 43 P.S. §804(c), states, in pertinent part:
[i]f an otherwise eligible employe has base year wages in an amount equal
to or in excess of the amount of qualifying wages…[s]pecified for the
Determination of Rate and Amount of Benefits . . . as determined under
subsection (a) of this section, and had eighteen (18) or more credit weeks
during his base year, he shall be entitled (to benefits). . . .
Notwithstanding any other provision of this act, any employe with less
than eighteen (18) credit weeks during the employe’s base year shall be
ineligible to receive any amount of compensation.
(Emphasis added.)
2
....
2. The [C]laimant earned base year wages and credit
weeks as follows: 1st Q 2018-$15,499/8 credit weeks; 2nd Q
2018-$8604/4 credit weeks; 3rd Q 2018-$1105/2 credit weeks; 4th
Q 2018-$0/0 credit weeks.
3. The [C]laimant earned total base year wages in the
amount of $25,209, and earned a total of 14 credit weeks.
4. During the [C]laimant’s base year, the [C]laimant
performed services as an Arbitrator with the [PAC] and [DCAC].
5. In order to qualify as an Arbitrator for PAC, the
[C]laimant was required to complete a CLE[5] course which the
[C]laimant paid for.
6. In order to qualify as an Arbitrator for DCAC, the
[C]laimant completed a CLE course, which the [C]laimant paid
for.
7. The [C]laimant performed services as an Arbitrator with
PAC on January 18, 2018, May 9, 2018 and October 25, 2018,
for which the [C]laimant was compensated a flat rate of $225 per
day.
8. The [C]laimant performed services as an Arbitrator with
DCAC on April 17, 2018, for which the [C]laimant was
compensated at a flat rate of $200.
9. No taxes were removed from the remuneration the
[C]laimant received from performing services as an Arbitrator
for either PAC or DCAC.
10. The [C]laimant paid taxes on the remuneration she
received from performing services as an Arbitrator for both PAC
and DCAC.
5
The term “CLE” refers to “Continuing Legal Education.”
3
11. The [C]laimant was permitted to perform services as
an Arbitrator while employed, and also for other counties as
allowed, which did not jeopardize the [C]laimant’s ability to
perform services as an Arbitrator with either PAC or DCAC.
12. The [C]laimant was offered opportunities to perform
services as an Arbitrator, but was permitted to reject those
opportunities at her discretion.
13. With respect to PAC, the [C]laimant has contacted
PAC to determine if her services were required.
14. The [C]laimant was required, among other things, to
fill out and sign a verdict form for any arbitration she performed,
and the [C]laimant was provided with amenities such as furniture
in the room in which the arbitration occurred, writing materials
and a computer for the [C]laimant and her fellow Arbitrators to
conduct research if necessary.
C.R., Item No. 13.
The referee determined that the most significant factors weighing
against a finding that Claimant earned covered wages from employment, when she
served as an arbitrator, were: (1) Claimant was compensated by the day as opposed
to hourly; (2) the expectations and requirements on Claimant’s final work product
were not dictated by any employer, rather they were dictated by the mandates of “the
[l]aw and process”; (3) Claimant paid taxes on the remuneration she received “as
opposed to having taxes removed”; (4) Claimant was not required to take CLE
courses by any “employer,” rather she voluntarily took the CLEs to further her desire
to become an arbitrator; and (5) Claimant would contact PAC to determine if her
services were needed, which demonstrated an active role on Claimant’s part to
secure work, as those engaged in an independent business would do. Id.
4
Claimant appealed to the Board, which affirmed the referee. In its
opinion, the Board adopted the referee’s findings and conclusions and determined
that Claimant’s work as an arbitrator constituted self-employment. The Board found
Claimant had “considerably more freedom than an employee to perform her work
and was self-governing and autonomous.” C.R., Item No. 15. The Board also noted
Claimant was paid by the job and that payment by the job, rather than by the hour,
suggested work as an independent contractor. Id. The Board did not agree with
Claimant’s position that she is not customarily engaged in an independently
established trade, occupation, profession, or business and that she only works
sporadically. The Board noted that Claimant testified she had “relationships” with
PAC and DCAC for five to seven years. The Board concluded that Claimant is a
self-employed arbitrator, has been doing this work for years, and is not an employee,
adding that Claimant “paid for classes, pays her own taxes, and may reject
opportunities at her own discretion.” Id.
Claimant filed a petition for review,6 arguing the Board erred in
determining that her work as an arbitrator constitutes self-employment, which
should not be counted toward her eligibility weeks for receiving UC benefits.
“A person receiving remuneration for services rendered is presumed to
be employed and therefore to have employment within the meaning of the Law.”
6
Our review is limited to determining whether the Board’s findings were supported by
substantial evidence, whether the Board committed an error of law, or whether constitutional rights
were violated. Dep’t of Corr. v. Unemployment Comp. Bd. of Review, 943 A.2d 1011 (Pa. Cmwlth.
2008). The Board’s findings of fact are conclusive on appeal as long as they are supported by
substantial evidence. Grieb v. Unemployment Comp. Bd. of Review, 827 A.2d 422 (Pa. 2003).
5
Famularo Catering, Inc. v. Dep’t of Labor & Industry, Office of Unemployment
Comp. Tax Servs., 125 A.3d 866, 869 (Pa. Cmwlth. 2015) (quoting Electrolux Corp.
v. Dep’t of Labor & Industry, Bureau of Employer Tax Operations, 705 A.2d 1357,
1359-1360 (Pa. Cmwlth. 1998)).
Section 402(h) of the Law, 43 P.S. §802(h), states:
An employe shall be ineligible for compensation for any week--
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 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 paid or payable with respect to such period as shall
be determined by rules and regulations of the department.
The Law does not define “self-employment.” However Section
4(l)(2)(B) of the Law defines “employment” as follows:
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 their 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.[7]
7
Parts (a) and (b), as noted here, are commonly referred to as the “two-prong test” to
determine whether an applicant for unemployment benefits was an employee or independent
contractor at the time of separation from employment.
6
Lowman v. Unemployment Comp. Bd. of Review, 178 A.3d 896, 900 (Pa. Cmwlth.)
(en banc), appeal granted,199 A.3d 862 (Pa. 2018).
On appeal, Claimant argues that her work as an arbitrator should count
toward her eligibility weeks for UC purposes because she is not self-employed. She
argues that the arbitration centers (PAC and DCAC) exercise substantial control over
her work, set her salary and schedule, and establish her payment by the job, rather
than by the hour. She also argues that paying her own taxes, rather than taxes being
withheld, is due to the decision of the respective arbitration center and is not
something within her control. Claimant further maintains that the centers provide
her with office space, furnishings, equipment and supplies, and substantial training,
and that the centers also set the rules regarding how to conduct hearings, handle
certain situations that may arise during hearings, and how to complete verdict and
award forms. She notes that lawyers from the arbitration centers teach the CLE
courses necessary to become an arbitrator, even though she paid to attend those
courses. Pet’r’s Br. at 9.
Claimant further contends that “[t]here is nothing preventing an
“employee” from seeking and taking additional work, [and] having more than one
paid job does not take away someone’s employment status.” Pet’r’s Reply Br. at 19.
In support of her position, Claimant cites this Court’s opinion in Silver v.
Unemployment Compensation Board of Review, 34 A.3d 893, 898 (Pa. Cmwlth.
2011),8 in which we stated: “the fact that an unemployed person agrees to accept,
8
In Silver, the claimant “began receiving unemployment compensation in May 2009,
following the termination of her employment with NAVTEQ, Inc. Early in September 2009, the
7
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.” Pet’r’s Reply Br. at 19.
In order to refute the Board’s findings, Claimant individually addresses
each of the various factors examined by the Board in its determination. Specifically,
Claimant argues that, in addition to notepads and award sheets, PAC and DCAC
provided her with space to conduct arbitrations and that both arbitration centers
provided basic furnishings, including tables, chairs, a computer to check the court
docket, and a furnished waiting room for the parties and their lawyers. Claimant
notes that, at one time, PAC provided a Bible in each arbitration room to swear-in
witnesses. Pet’r’s Br. at 15. Claimant further argues that, without the arbitration
centers, she could not independently perform arbitrations because arbitrations are
not conducted in private law offices. She asserts that it was not her decision to be
paid by the day, as opposed to by the hour, as this was, and is, a matter under the
control of the arbitration centers. Pet’r’s Br. at 16-18.
In addition, Claimant argues it does not matter that she paid for her own
training to become an arbitrator, where she was required to take compulsory training
to serve as an arbitrator in Philadelphia and in Delaware County. Claimant stresses
claimant was contacted by Gerson Lehrman Group, Inc. (Gerson). Gerson had seen the claimant’s
resume online and asked if the claimant would be interested in providing telephone consultations
on an intermittent, as-needed basis with Gerson’s clients. The claimant agreed and submitted
biographical information for Gerson to display on its website. With respect to the consultations,
the claimant set her own hours and rate of pay; she worked from home, and she was under no
obligation to accept any assignments. The claimant’s job title was ‘non-agent independent
contractor.’ The claimant accepted a total of four consultation assignments through Gerson, from
September 11, 2009, to October 20, 2009.” Silver, 34 A.3d at 894.
8
that the training is provided by individuals from the arbitration centers and that once
trained, arbitrators are required to follow the rules of the arbitration centers,
including how to complete an award form at the conclusion of the arbitration. Pet’r’s
Br. at 18-20. Claimant also notes that she has a long-standing arrangement with
PAC and DCAC (over the past five to seven years), despite not working at either
center on a full-time basis. Pet’r’s Br. at 22.
In response to Claimant’s argument, the Board argues that Claimant is
a licensed attorney, she desired to become an arbitrator, and that, in order to perform
as an arbitrator in Philadelphia and Delaware counties, she was required to have
certain training.9 The Board contends that, thereafter, she was placed on the
arbitrator lists and began to provide arbitration through both PAC and DCAC, two
separate entities. Resp’t’s Br. at 6. Citing Danielle Viktor, Ltd. v. Department of
Labor and Industry, Bureau of Employer Tax Operations, 892 A.2d 781, 791 (Pa.
2006), the Board notes that “[a] determination regarding the existence of an
employer/employee relationship is a question of law which is determined based on
the unique facts of each case.” The Board relies on Clark v. Unemployment
Compensation Board of Review, 129 A.3d 1272, 1278 (Pa. Cmwlth. 2015), for the
9
The Board notes that:
[t]he minimum criteria for qualification to become an arbitrator in
Philadelphia includes: (1) membership [in] the Bar of the Supreme Court
of Pennsylvania; (2) active practice of law for a minimum of one year
subsequent to admission to the Bar; (3) maintenance of a principal office in
Philadelphia County; (4) trial of a case in any forum in [Pennsylvania]; and
(5) attendance [at] a court approved arbitration seminar that indicates that it
serves the purpose of allowing an individual to sit as an arbitrator.”
Resp’t’s Br. at 6.
9
proposition that “in concluding whether an employment relationship exists, no single
factor is controlling; therefore, the ultimate conclusion must be based on the totality
of the circumstances.” Resp’t’s Br. at 7.
Citing Stauffer v. Unemployment Compensation Board of Review, 74
A.3d 398, 404-05 (Pa. Cmwlth. 2013), the Board points out that:
[t]o determine whether a claimant was free from control or
direction in performing her work, this Court must examine
whether the purported employer (1) paid to the claimant a fixed
rate of pay; (2) withheld taxes from the claimant’s pay; (3)
supplied the tools or equipment necessary to perform the work;
(4) provided on-the-job training; (5) set the time and location for
work or meetings; (6) had the right to monitor the claimant’s
work and review performance; and (7) permitted the claimant to
refuse assignments.
Resp’t’s Br. at 8.
To prove that Claimant was free from direction and control, the Board
maintains that both purported employers, i.e., PAC and DCAC, paid Claimant a
fixed rate of pay (by the day, rather than by the hour) and allowed Claimant to refuse
assignments, and neither purported employer withheld taxes from Claimant’s pay or
provided her with on-the-job training. Id. The Board acknowledges that Claimant
points to other factors to support a conclusion that is opposite to the one it reached
but counters that “because each case is fact specific, all factors need not be present
to determine the type of relationship that exists.” Resp’t’s Br. at 9 (citing Quality
Care Options v. Unemployment Comp. Bd. of Review, 57 A.3d 655, 660 (Pa.
Cmwlth. 2012)). The Board argues that the training Claimant received was provided
via CLE courses and was required by local court rules, not by the arbitration centers
10
themselves and that “[j]ust because someone from the purported employers [PAC
and DCAC] happened to teach the CLE classes sponsored by a bar association . . .
does not turn Claimant into an employee when her name was [submitted to them to
be added to their list] . . . .” Resp’t’s Br. at 9. Citing C E Credits OnLine v.
Unemployment Compensation Board of Review, 946 A.2d 1162, 1169 (Pa. Cmwlth.
2008), the Board states “‘[c]ontrol’ for purposes of Section 4(l)(2)(B) of the Law is
not a matter of approving or directing the final work product so much as it is a matter
of controlling the means of its accomplishment.” Resp’t’s Br. at 9. The Board notes
that Claimant testified at her hearing before the UC referee, that she had “looked
into how I could become an Arbitrator after [an attorney] told me that he was one,
and I heard about the CLE class and I signed up and paid for it, and then I attended
the class.” C.R., Item No. 12, Notes of Testimony (N.T.) 11, Resp’t’s Br. at 9-10.
The Board adds that “[c]ontrary to Claimant’s argument . . . it is relevant that she
paid for the CLE . . . . It evidences her choice to become an arbitrator, not a benefit
paid for by the [p]urported [e]mployers.” Resp’t’s Br. at 10, n.5. The Board argues
that, “[t]hough the [p]urported [e]mployers may have provided some tools and
equipment and requested the final work product of competent arbitrations, they did
not control the means of accomplishment.” Resp’t’s Br. at 12.
The Board contends that Claimant, here, is “a professional, i.e., an
arbitrator, for which specific qualifications are required,” including possession of a
law license and arbitration-specific training. Resp’t’s Br. at 13-14. The Board
maintains that Claimant was capable of performing her activities for others and that
the nature of her business did not, and has not, required her to look to only one
employer for the continuation of her services, as PAC and DCAC are separate
11
entities/purported employers. “Thus, she is customarily engaged in an independent
profession within the meaning of Section 4(l)(2)(B).” Resp’t’s Br. at 14.
The Board concluded that, while Claimant earned 14 credit weeks for
employment during her base year of 2018, her remuneration from the services she
performed as an arbitrator did not qualify as covered wages. Thus, Claimant did not
meet the threshold of 18 credit weeks to be financially eligible for UC benefits.
Resp’t’s Br. at 14-15.
Upon review, we affirm the Board. Although we acknowledge there
are multiple factors to be considered in determining whether someone is engaged in
work as an employee or, alternatively, is self-employed, we also recognize that no
single factor is, in and of itself, dispositive. Each case presents its own unique set
of facts and must be analyzed on its own. This Court has recognized an individual’s
independence when “one undertakes an activity in an entrepreneurial spirit with all
intentions of starting a new business, trade, profession or occupation.” Buchanan v.
Unemployment Comp. Bd. of Review, 581 A.2d 1005, 1008 (Pa. Cmwlth.1990).
In the case sub judice, Claimant obtained and maintained her own law
license, obtained and paid for her own training to become an arbitrator, was paid by
PAC and DCAC on a daily basis, rather than on an hourly basis, and paid her own
taxes on the remuneration she received for her services as an arbitrator. In addition,
Claimant had latitude in the performance of her duties as an arbitrator, did not rely
12
on just one of the two purported employers (i.e., PAC or DCAC)10 for her arbitration
opportunities, and was, and is, free to pursue arbitration opportunities elsewhere.
Claimant offers her services as an arbitrator directly to her clients/customers, i.e.,
PAC and DCAC, as evidenced by her testimony that she sometimes calls the centers
directly to inquire about work availability (C.R., Item No. 12, N.T., June 26, 2019).
Claimant has developed a years-long relationship with each arbitration center,
providing services to DCAC for approximately five years and services to PAC for
seven years.
Claimant’s reliance on this Court’s opinion in Silver is misplaced. In
Silver, we noted that “the question of whether one is self-employed after becoming
separated from an employer and is, therefore, ineligible for benefits under Section
402(h) of the Law, is different from the question of whether or not the individual was
an employee.” Silver, 34 A.3d at 899 n.8 (citing Krum v. Unemployment Comp. Bd.
of Review, 689 A.2d 330 (Pa. Cmwlth. 1997)). Here, the Board determined Claimant
was ineligible under section 402(c) of the Law because she did not meet her
minimum credit weeks. She was not, as the claimant in Silver, a person who was
already receiving unemployment compensation who later occasionally accepted
intermittent work.
Further, we note our Supreme Court’s recent opinion in A Special
Touch v. Department of Labor and Industry, Office of Unemployment Compensation
10
Of note here is the point made by the Board that “Claimant was capable of performing
her activities for others and that the nature of her business did not require her to look to only one
employer for the continuation of her services, as PAC and DCAC are separate entities/purported
employers.” Resp’t’s Br. at 14.
13
Tax Services, _ A.3d _, (Pa., No. 30 MAP 2019, filed April 22, 2020), held that the
“phrase ‘customarily engaged’ as used in Section 4(l)(2)(B) of the Law requires that
an individual actually be involved as opposed to merely having the ability to be
involved, in an independently established trade, occupation, profession, or
business.” Slip. Op. at 26. However, we do not believe A Special Touch has any
bearing on the outcome of the present matter, as Claimant was actually involved in
the independently established occupation, profession, and business of serving as an
arbitrator for two separate entities.
Claimant’s relationship with her clients, and the steps she has taken
independently to become an arbitrator are, among a litany of other factors, indicia of
self-employment in an established trade, occupation, profession or business. Thus,
there is substantial evidence to support the Board’s determination that Claimant is
self-employed and that her work as an arbitrator did not count toward her credit
weeks to make her eligible for UC benefits. Accordingly, we discern no error in the
Board’s application of the law to the facts in the case, and we affirm the Board’s
order.
______________________________
J. ANDREW CROMPTON, Judge
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Deborah Silver, :
Petitioner :
:
v. : No. 1206 C.D. 2019
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 7th day of July 2020, the Order of the Unemployment
Compensation Board of Review is AFFIRMED.
______________________________
J. ANDREW CROMPTON, Judge