Harkness v. Unemployment Comp. Bd.

• Decision Date: 17 April 2007
• Docket Number: No. 112 MAP 2005.,No. 113 MAP 2005.,112 MAP 2005.,113 MAP 2005.
• Parties: Lani G. HARKNESS v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW. Macy's East, Inc., Intervenor. Appeal of Macy's East, Inc., Intervenor. Lani G. Harkness v. Unemployment Compensation Board of Review. Macy's East, Inc., Intervenor. Appeal of Unemployment Compensation Board of Review.
• Court: Pennsylvania Supreme Court

920 A.2d 162

Lani G. HARKNESS v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW.

Macy's East, Inc., Intervenor.

Appeal of Macy's East, Inc., Intervenor.

Lani G. Harkness v. Unemployment Compensation Board of Review.

Macy's East, Inc., Intervenor.

Appeal of Unemployment Compensation Board of Review.

No. 112 MAP 2005.

No. 113 MAP 2005.

Supreme Court of Pennsylvania.

Argued December 7, 2005.

Decided April 17, 2007.

Roger H. Caffier, Esq., Gerard Matthew Mackarevich, Esq., Carol J. Mowery, Esq., Harrisburg, for Unemployment Compensation Board of Review.

Thomas Sanford Beckley, Esq., Charles Owen Beckley, II, Esq., Harrisburg, for amicus curiae PA Retailers' Association.

Jonathan A. Segal, Esq., Robert M. Goldich, Esq., Kelly Dobbs Bunting, Esq., Philadelphia, for amicus curiae Society for Human Resource Management, et al.

Steven Eric Hoffman, Esq., Allentown, for Lani G. Harkness.

Debra P. Fourlas, Esq., James P. DeAngelo, Esq., David Barasch, Esq., Harrisburg, for Macy's East, Inc.

Roger H. Caffier, Esq., Gerard Matthew Mackarevich, Esq., Carol J. Mowery, Esq., Harrisburg, for Unemployment Compensation Board of Review.

Debra P. Fourlas, Esq., James P. DeAngelo, Esq., David Barasch, Esq., Harrisburg, for Macy's East Inc.

BEFORE: CAPPY, C.J., and CASTILLE, NEWMAN, SAYLOR, EAKIN and BAER, JJ.

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

Chief Justice CAPPY.

In this appeal by allowance we consider whether an employer may be represented at an unemployment compensation hearing before a referee of the Unemployment Compensation Board of Review by an individual who is not an attorney. A majority of the Commonwealth Court determined that an employer may not be so represented. We respectfully disagree, and thus, for the reasons set forth below, reverse the order of the Commonwealth Court.

The facts underlying this appeal, as found by the Unemployment Compensation Referee S. Harold Geld (Referee), are as follows: Claimant Lani Harkness (Claimant) was employed by Federated Logistics t/a Macy's Department Store (Macy's) as a beauty advisor for Estée Lauder products. On August 11, 2003, a customer became rude with Claimant in a discussion regarding an eye concealer product which was not presently available. The customer informed Claimant that she did not want a "b____" like her to wait on her. The customer also made gestures such as kissing sounds, which Claimant found offensive and asked Claimant how old she was. Claimant, despite the "accelerated" confrontation, did not attempt to obtain a supervisor or a manager nor request that a nearby co-employee make such a contact. While Claimant considered calling security, she did not do so. Ultimately, Claimant told the customer to "get your fat a — out of here."

Claimant was aware, based upon the employee handbook, that the use of lewdness and/or use of obscenities or vulgarities towards a customer could be grounds for immediate termination without prior warning. Claimant was not immediately disciplined by her department manager who intervened to appease the customer. On August 22, 2003, however, after Claimant returned from a one week vacation, the store manager terminated Claimant from her employment for her remarks to the customer.

On August 24, 2003, Claimant filed for unemployment compensation benefits.

Approximately two weeks later, on September 11, 2003, the Allentown Unemployment Compensation Service Center found Claimant to be ineligible for benefits.

The Claimant appealed and a hearing was held on October 9, 2003 before Referee Geld. The hearing was attended by Claimant, Claimant's counsel, and a representative for Macy's. Macy's representative, William Forrest, was an employee of TALX UC EXPRESS, a company located in St. Louis, Missouri that is in the business of representing companies in unemployment compensation matters. Forrest was not an attorney. Initially, Claimant objected to Macy's being represented by a non-attorney. This objection was overruled by Referee Geld.

By decision/order dated November 4, 2003, Referee Geld concluded that Claimant violated Macy's' customer service policy and that this rose to the level of willful misconduct. Section 402(e) of the Pennsylvania Unemployment Compensation Law provides that a claimant shall not be eligible for compensation for any week in which her unemployment is due to her discharge from work for willful misconduct connected with her work. 43 P.S. § 802(e). Thus, Referee Geld found that benefits were properly denied under Section 402(e) of the Law.

Claimant appealed this decision to the Unemployment Compensation Board of Review (Board). The Board concluded that the determination made by Referee Geld was proper under the Unemployment Compensation Law and adopted the Referee's findings and conclusions. Furthermore, with respect to the issue sub judice, the Board found that the Law "permits parties to be represented by legal or non-legal advisors. As such, the Referee did not err in allowing the employer to be represented by a non-legal advisor." Decision of Unemployment Compensation Board of Review, at 1.

Thereafter, Claimant appealed to the Commonwealth Court. On February 3, 2005, a divided en banc Commonwealth Court concluded that it was error for the Referee to permit Macy's to be represented at the hearing by a non-attorney "tax consultant." Harkness v. Unemployment Compensation Board of Review, 867 A.2d 728 (Pa.Cmwlth.2005).

Specifically, the court engaged in a two-fold inquiry. The majority first determined that Forrest was engaging in the practice of law as he appeared before the Referee and acted as an advocate of Macy's contending that Claimant was discharged due to willful misconduct. In support thereof, the majority noted that Forrest conducted "cross-examination" of witnesses, "made decisions regarding evidentiary matters," and offered a "closing legal argument." Id. at 731. The court majority then found that Forrest's engaging in the practice of law was unauthorized, based upon the proposition that generally, a non-attorney may not represent parties before Pennsylvania courts or administrative agencies. While acknowledging exceptions, the majority pointed to the Unemployment Compensation Law, as well as regulations promulgated pursuant to the Law, that in the majority's view only permits the claimant to be represented by a non-attorney in an unemployment compensation hearing. 43 P.S. § 862. The Commonwealth Court majority concluded that despite the informal nature of unemployment compensation proceedings and the relatively small amounts in controversy, it was erroneous for the Board to allow non-lawyer employer representation. Thus, the Commonwealth Court vacated the Board's order and remanded the case to the Board, for remand to a referee for a new hearing consistent with the court's opinion.

Judge Bonnie Brigance Leadbetter, joined by Judge Renée Cohn Jubelirer, dissented. The dissenters first opined that even if Forrest was engaged in the unauthorized practice of law, any error was harmless. Second, the dissenters found the majority's analysis to be overly broad in that not all non-lawyer representatives in these proceedings are engaged in the practice of law; they often assist in clarifying issues. Furthermore, according to the dissenters, the Board demonstrated sound policy reasons for permitting non-lawyers to participate in unemployment compensation hearings: the proceedings are informal and relatively small amounts of money are in controversy. Finally, the dissenters questioned whether the majority's conclusion that non-lawyers could not represent employers but could represent claimants, in essence requiring the Board to discriminate between parties, could withstand equal protection scrutiny.

Macy's, which had sought and been granted post-decision leave to intervene, and the Board both filed petitions for allowance of appeal from the Commonwealth Court's decision. We granted allocatur,¹ and consolidated the matters to consider whether a non-employee, non-lawyer may represent an employer in unemployment compensation proceedings.²

In determining whether a non-lawyer may represent an employer in unemployment compensation proceedings, we first will consider whether a non-lawyer representing an employer in such proceedings is engaging in the practice of law. As we find that such representation does not constitute the practice of law, we will then consider whether the Unemployment Compensation Law permits non-lawyer representation of an employer.

The Pennsylvania Constitution vests with our Court the exclusive authority to regulate the practice of law, which includes the power to define what constitutes the practice of law. Pa. Const. Art. V, § 10(c); Dauphin County Bar Association v. Mazzacaro, 465 Pa. 545, 351 A.2d 229, 233 (1976).³⁴ What constitutes the practice of law, however, is not capable of a comprehensive definition. For this reason, our Court has not attempted to provide an all-encompassing statement of what activities comprise the practice of law. Office of Disciplinary Counsel v. Marcone, 579 Pa. 1, 855 A.2d 654, 660 (2004); Shortz et al. v. Farrell, 327 Pa. 81, 193 A. 20, 21 (1937). Thus, we have determined what constitutes the practice of law on a case-by-case basis.

While our Court has addressed the question of what constitutes the practice of law on an individualized basis, we have made clear that paramount to the inquiry is consideration of the public interest. Marcone, 855 A.2d at 658; Dauphin County, 351 A.2d at 233. Consideration of the public interest has two related aspects: protection of the public and prudent regulation so as not to overburden the public good.

Regarding the protection of the public, then Justice, later Chief Justice Stern perhaps best summarized this aspect of the Court's concern in Shortz, "While in order to acquire the education necessary to gain admission to the bar and thereby become eligible to practice law, one is obliged to `scorn...