Kentucky Fried Chicken of Altoona, Inc. v. Unemployment Compensation Bd. of Review

• Decision Date: 07 September 1973
• Citation: 309 A.2d 165,10 Pa.Cmwlth. 90
• Parties: KENTUCKY FRIED CHICKEN OF ALTOONA, INC., Appellant, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellee.
• Court: Pennsylvania Commonwealth Court

Page 165

309 A.2d 165

10 Pa.Cmwlth. 90

KENTUCKY FRIED CHICKEN OF ALTOONA, INC., Appellant, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellee.

Commonwealth Court of Pennsylvania.

Argued May 11, 1973.

Decided Sept. 7, 1973.

Nelson, Campbell & Levine, Benjamin I. Levine, Jr., Altoona, for appellant.

Sydney Reuben, Asst. Atty. Gen., Unemployment Compensation Board of Review, Harrisburg, for appellee.

Before KRAMER, MENCER and BLATT, JJ.

OPINION

KRAMER, Judge.

This is an appeal filed by Kentucky Fried Chicken of Altoona, Inc. (Kentucky) from an order of the Unemployment Compensation Board of Review (Board) awarding compensation to Ronald Richard Crist (Crist).

Crist began working for Kentucky in December of 1963. Save for the time he served in the military, his employment was continuous until the date of his termination, September 25, 1971. He had been manager of one of Kentucky's restaurants from June, 1970. For approximately one and one-half months before his termination, Crist had been working seven days a week, nine hours a day. Kentucky stated that Crist's employment was terminated because he was not always present during the supper rush, and he failed to keep a schedule of the amount of chicken to be kept on hand at any given period. Kentucky asserts that the latter reason precipitated a lack of sufficient chicken on Labor Day, 1971. Crist proffers that business was slow just prior to the holiday, and that therefore he underestimated the amount necessary.

Crist applied for unemployment compensation benefits, which application was denied by the Bureau of Employment Security. The Bureau determined that Crist was not entitled to benefits because his behavior constituted wilful misconduct. Crist appealed, and a hearing was held; after which, the referee concluded that Crist was ineligible for benefits for the same reason, i.e. wilful misconduct. Crist appealed to the Board, and on January 17, 1972, the Board affirmed the referee. On January 21, 1972, the Board, on its own motion, vacated its prior order. On March 22, 1972, the Board issued a new order (reversing its prior order), in which it concluded that Crist was Not guilty of wilful misconduct and that he was entitled to benefits. Kentucky has appealed from the second order to this Court.

In unemployment compensation cases, our scope of review, absent fraud, is limited to (1) a determination as to whether the Board's findings are supported by the evidence, and (2) questions of law. See James v. Unemployment Compensation Board of Review, 6 Pa.Cmwlth. 489, 296 A.2d 288 (1972).

In this appeal, two issues are before this Court. The first evolves from the procedural format followed by the Board. The question presented is whether the Board on its own motion, absent a petition for rehearing or reconsideration, and without further opportunity to be heard having been granted the parties, could vacate its first order and issue a second order which in essence reverses the initial order. The second issue before the Court queries whether Crist's behavior constituted wilful misconduct under Section 402(e) of the Unemployment Compensation Act, Act of December 5, 1936, P.L. (1937) 2897, as amended, 43 P.S. § 802(e), and whether such behavior barred the awarding of unemployment compensation benefits.

We shall address ourselves to the first issue at this time. Section 509 of the Act, 43 P.S. § 829 provides that Board orders become final ten days after issuance. The Board apparently relies on this section to support its position that anytime within the ten days after the issuance of an order, it may, with impunity, change or vacate said order. Our research has unearthed two unemployment compensation cases which would support that proposition. The first, Sable Unemployment Compensation Case, 197 Pa.Super. 177, 177 A.2d 115 (1962), presents a fact situation wherein one of the parties Petitioned for reconsideration within the ten-day period. The Sable court then refers to a Board regulation which provides for such action. We are of the opinion that Sable, supra, is distinguishable from the case at bar, because in the case before us neither party sought reconsideration; the Board vacated its order on its own motion.

There are, however, two legal principles which the Sable court relief upon in reaching its decision which must be discussed here. The court in Sable, supra, cited Marcus Hook Borough School District v. Board for the Assessment and Revision of Taxes, 359 Pa. 60, 58 A.2d 26 (1948), for the proposition that an administrative body is permitted to correct errors on its own motion, absent the intervention of a party. While we agree with the principle as espoused, we cannot abide by the proposition that the administrative body's power to do so is unlimited and unqualified. Marcus Hook, supra, does not stand for such an open-ended proposition.

In Marcus Hook, the Board in question and at least one of the parties was laboring under the misconception that the assessment figure in issue represented the evaluation of two properties. When it became clear that the second property was separately valued, the Board corrected its valuation to reflect its valuation of the separate properties. While this action made a substantial change in the final outcome, it did not constitute a complete reversal of the substantive legal issues, rather it corrected an obvious mechanical error.

We firmly believe that an administrative agency, on its own motion, having provided the proper notice and explanation, may correct typographical, clerical, and mechanical errors obviated and supported by the record. It may likewise correct factual errors which are not in dispute, and indeed even factual misconceptions, such as presented in Marcus Hook,supra. It may not, however, absent a petition for reconsideration or the granting of the opportunity to be heard by way of oral argument or brief, reverse itself on the substantive issues previously decided. On reconsideration, the party seeking the same bears the burden of proving his position or that circumstances have changed. See Milk Control Commission of Pennsylvania v. United Retail Grocers Association, 361 Pa. 221, 64 A.2d 818 (1949). When an agency changes its position on its own motion, the parties must at least be given an opportunity to be heard by way of oral argument or brief. If the circumstances justify, and the Board deems it necessary, it could allow the introduction of additional evidence or a rehearing. See West Penn Power Company v. Pennsylvania Public Utility Commission, 174 Pa.Super. 123, 100 A.2d 110 (1953).

This brings us to the second legal principle in Sable, supra, which mandates our attention. The Sable court cites Franke Unemployment Compensation Case, 166 Pa.Super. 251, 70 A.2d 461 (1950), for the proposition that procedural due process does not require more than one hearing, so long as the requisite hearing is held before the final order becomes effective. Once again we agree with the general principle of law espoused. We believe, however, that two other general principles of law are of equal weight and must be considered. First, an administrative agency is a creature of the State and has only those powers and authority as have been granted to it by the Legislature. See Pa. Human Relations Commission v. Brucker, 93 Dauph. 8, 51 Pa.D. & C.2d 369 (1970). We interpret Section 509 of the Act, 43 P.S. § 829, which provides that an order of the Board becomes final after ten days, to allow for modification and reconsideration under circumstances such as we have previously delineated above.

The second legal maxim which bears on the matter before us, is perhaps the only absolute general statement with regard to due process, i.e. what which constitutes procedural due process, or for that...