Martin v. Unemployment Compensation Bd. of Review
| Decision Date | 28 September 1983 |
| Citation | 502 Pa. 282,466 A.2d 107 |
| Parties | Elaine MARTIN, Appellant, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellee. |
| Court | Pennsylvania Supreme Court |
[502 Pa. 285] John Stember and Joseph Mesar, Neighborhood Legal Services, Braddock, for appellant.
Richard Wagner, Daniel R. Schuckers, Deputy Atty. Gen., Charles G. Hasson, Asst. Counsel, Harrisburg, for appellee.
Before ROBERTS, C.J., and NIX, LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON and ZAPPALA, JJ.
This is an appeal from an order of Commonwealth Court affirming the Unemployment Compensation Board of Review's denial of appellant's application for unemployment compensation benefits. The sole issue raised is whether the statutory scheme chosen by the legislature to determine the levels of monetary earnings qualifying a worker for unemployment benefits 1 violates the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution by creating invidious eligibility classifications. The statute applicable to this case required that claimants earning $3,738.00 or more in their highest quarter also earn the maximum of $6,000.00 in fixed qualifying wages in their base year, with a minimum 20% of such base year wages earned outside their highest quarter. On the other hand claimants earning less than $3,738.00 in their highest quarter had to earn 35% to 38% of their wages outside their highest quarter without any higher fixed constant amount. 2 Since there is a rational basis for this legislative distinction the statute is valid and we affirm the Commonwealth Court's order.
The facts are not in dispute. Elaine Martin, appellant, had been employed by the National Biscuit Company (Nabisco) for three and one-half years on October 18, 1979 when she became unemployed. Because of sporadic lay-offs, she averaged approximately five months of employment per year during that period. On April 22, 1979, appellant filed a claim with the Bureau of Unemployment Compensation. The Bureau found her financially ineligible. The table set forth in section 404(e)(1) of the Act, 43 P.S. § 804(e)(1), provides that a claimant such as appellant, with highest quarter earnings of $2,989.00 during her base year, 3 can qualify for benefits of $122.00 per week, provided she earned total base year wages ("qualifying wages") of $4,800.00. Because appellant's "qualifying wages" during her base year, $4,433.00, were less than the amount required, the Bureau determined her ineligible for benefits. 4
Following a hearing held on June 7, 1979, a referee upheld the Bureau's determination. Appellant sought further review before the Unemployment Compensation Board of Review (Board), appellee. On August 9, 1979 the Board affirmed the finding of financial ineligibility.
Appellant challenged the constitutionality of section 404(e)(1) of the Act, 43 P.S. § 804(e)(1), in her appeal to Commonwealth Court. By opinion and order of January 6, 1982, a panel of the Commonwealth Court affirmed the denial of benefits. 63 Pa. Commonwealth Ct. 629, 439 A.2d 207 (1982). Thereafter, we granted appellant's petition for allowance of appeal. The parties initially argued the appeal before this Court on September 23, 1982, at which the Board was represented by the Attorney General's office. On December 15, 1982, this Court ordered reargument with leave to file supplemental briefs and we invited interested parties and organizations to submit briefs as amici curiae. The case was reargued on March 7, 1983 with only the original parties participating.
The Bureau determines financial eligibility for unemployment compensation benefits by applying Section 404(e)(1), 43 P.S. § 804(e)(1), Table Specified for the Determination of Rate and Amount of Benefits (hereinafter Table) a portion of which is printed as follows:
Part A Part B Part C Part D 5
---------------- --------------- --------------- ---------------
Highest
Quarterly Rate of Qualifying Amount of
Wage Compensation Wages Compensation
---------------- --------------- --------------- ---------------
$2,888-2,912 $118 $4,640 $3,540
2,913-2,937 119 4,680 3,570
2,938-2,962 120 4,720 3,600
2,963-2,987 121 4,760 3,630
2,988-3,012 122 4,800 3,660
******* *** ***** *****
3,713-3,737 151 5,960 4,530
3,738 or more 152 6,000 * 4,560
* (This figure subject to section 401(a), 43 P.S. § 801(a))
To determine financial eligibility under this Table, a claimant first determines her "highest quarterly wages" (Part A) earned during the base year which, in turn, determines the corresponding rate and total amount of compensation provided in Parts B and D of the Table. However, in order to be eligible for those benefits, the claimant must have earned, in her base year, the amount set forth in Part C, "Qualifying Wages". 6 The "qualifying wage" column when applied in conjunction with the highest quarterly wage column is designed to ensure that a certain percentage of a claimant's wages will have been earned outside of her highest quarter, so as to demonstrate that a claimant has been genuinely attached to the labor force. Throughout the Table, this percentage (a percentage obtained by dividing the amount earned outside the high quarter by the qualifying wages earned during the base year) is in the 35%-38% range, i.e. a claimant had to have earned from 35%-38% of her total base year wages in a quarter or quarters other than her high quarter. 7
However, a claimant earning the highest quarterly wage specified on the Table, $3,738.00, 8 or more, is referred to section 401(a), 43 P.S. § 801(a), which provides, in relevant portion:
Compensation shall be payable to any employee who is or becomes unemployed, and who--(a) Has, within his base year, been paid wages for employment as required by section 404(c) of this act: Provided, however, that not less than twenty per centum (20%) of the employe's total base year wages have been paid in one or more quarters, other than the highest quarter in such employe's base year.
The crux of appellant's argument is that Part C of the Table operates to require claimants making $3,738.00 or less in their high quarters to have earned 35%-38% of their qualifying wages in another quarter or quarters, while the Table and the so-called "20% minimum rule" of section 401(a) allow those claimants earning more than $3,738.00 in their high quarters to qualify for benefits if as little as 20% of their qualifying wages are earned outside of the high quarter. 9 Appellant argues these two methods of computing eligibility create classifications impermissible under the Equal Protection Clause of the Fourteenth Amendment.
Appellant earned $2,989.00 in her highest quarter and $1,444.00 outside her highest quarter. Her qualifying wages were $4,433.00. Based on her hourly rate of $7.00 per hour she worked 427 out of a possible 520 hours in her highest quarter and 206 hours outside her highest quarter. 10 Appellant earned 33% of her qualifying wages outside her highest quarter. By application of Part C of the Rate Table and the "step down" provision of Section 404(a)(3) she failed to qualify for benefits.
She notes that a higher paid employee earning $9.50 per hour but working identical hours would have exceeded the $3,738.00 maximum in Part C and would qualify for benefits with only 31% of her earnings outside the highest quarter. Appellant argues that the only purpose served by permitting persons earning over $3,738.00 in their highest quarter to qualify for compensation benefits with a lower percentage of earnings outside the highest quarter than those earning under $3,738.00 in their highest quarter has no legitimate interest and the sole effect of discriminating against workers with lower hourly wages. However, careful examination of the statutory scheme in question reveals that it was designed to and does serve a legitimate state end even though it does result in some inequality.
In determining whether this statute violates the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution we must first determine the appropriate standard of review. The United States Supreme Court has consistently applied only minimal scrutiny to statutory classifications employed in the regulation of economic activity or in the distribution of economic benefits so long as those classifications do not discriminate against "suspect classes". If the statutory classification bears some rational relationship to a legitimate state end, it is within the legislative power. McGinnis v. Royster, 410 U.S. 263, 93 S.Ct. 1055, 35 L.Ed.2d 282 (1973). See also Commonwealth of Pennsylvania, Department of Public Welfare v. Molyneaux, 498 Pa. 192, 445 A.2d 730 (1982). Moreover, such a classification does not offend the Equal Protection Clause merely because it "is not made with mathematical nicety or because in practice it results in some inequality." Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970).
"It is by practical experience and not by theoretical inconsistencies that the question of equal protection is to be decided" and it is "no requirement of equal protection that all evils of the same genus be eradicated." Railway Express Agency v. New York, 336 U.S. 106, 69 S.Ct. 463, 93 L.Ed. 533 (1949). The Supreme Court has concluded that "the problems of government are practical ones and may justify, if they do not require, rough accommodations--illogical, it may be, and unscientific." Dandridge v. Williams, 397 U.S. at 485, 90 S.Ct. at...
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