Teets v. Unemployment Compensation Bd. of Review

• Decision Date: 10 September 1992
• Citation: 150 Pa.Cmwlth. 419,615 A.2d 987
• Parties: Marie C. TEETS, Petitioner, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 987

615 A.2d 987

150 Pa.Cmwlth. 419

Marie C. TEETS, Petitioner, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent.

Commonwealth Court of Pennsylvania.

Submitted on Briefs Dec. 20, 1991.

Decided Sept. 10, 1992.

William H. Mendlow, for petitioner.

John E. Herzog, Asst. Counsel and Clifford F. Blaze, Deputy Chief Counsel, for respondent.

Before COLINS, and KELLEY, JJ., and NARICK, Senior Judge.

KELLEY, Judge.

Marie Teets (claimant) was laid off from her employment with Trans World Airlines (employer) on October 19, 1990, after working there for more than twenty-four years. Claimant filed for unemployment compensation benefits with the Bureau of Unemployment Compensation Benefits and Allowances (bureau) and initially received benefits. The bureau later suspended benefits based on a determination that claimant was self-employed and therefore not entitled to benefits under section 402(h) of the Unemployment Compensation Law (Law). ¹ Claimant appealed to a referee who made the following findings of fact:

1. Claimant was previously employed by Trans World Airlines for more than 24 years as an account executive and her last day of work was on or about October 19, 1990; her separation is not at issue in this appeal.

2. In September 1990 the claimant responded to an advertisement offering information on the subject of 'Eternal Youth'.

3. In response to her request for information, the claimant received a video tape but as of November 7, 1991 [sic] she had not viewed the tape.

4. On November 7, 1990 the claimant at the invitation of a representative of Nu Skin Company attended a meeting at which the company presented information about skin care products and solicited those in attendance to join in a pyramidal sales program.

5. Around the end of November the claimant signed an agreement to be a distributor for Nu Skin Products so that she could buy those products for herself and also hopefully supplement her income under the employer's pyramidal sales program.

6. Along with signing the above mentioned agreement, the claimant invested approximately $250 to purchase a sales kit.

7. Since the time that she signed the distributor's agreement with Nu Skin the claimant has engaged in efforts to enlist others in the pyramidal sales program.

8. Claimant received no income from her activities with Nu Skin until February 1991 when she received a payment of less than $6 as a commission on a sale of a product.

9. The claimant was aware of her obligation to report any earnings she may have had from sales of Nu Skin but was not aware that she had an obligation to report her involvement in that activity prior to receipt of any commissions.

10. Through no fault of her own, claimant received $2,258 in unemployment benefits to which she was not entitled.

The referee's decision affirmed the bureau's suspension of benefits for the weeks ending December 8, 1990, through February 9, 1991, and ordered that a nonfault overpayment was to be recouped under section 804(b)(1) of the Law. ² Claimant appealed to the Unemployment Compensation Board of Review which affirmed.

Our scope of review is limited to determining whether constitutional rights were violated, whether an error of law was committed, or whether necessary findings of fact are supported by substantial evidence. Kirkwood v. Unemployment Compensation Board of Review, 106 Pa.Commonwealth Ct. 92, 525 A.2d 841 (1987). Normally the employer has the burden of proving that a claimant is self-employed, but where the bureau acts on its own in suspending benefits because of self-employment, the bureau carries the burden. Roche v. Unemployment Compensation Board of Review, 94 Pa.Commonwealth Ct. 546, 503 A.2d 1103 (1986).

Claimant argues that her activities do not meet the definition of self-employment. Section 402 of the Law reads, in part:

An employe shall be ineligible for compensation for any week--

....

(h) 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.

43 P.S. § 802. Even though the referee concluded that claimant's participation in the Nu Skin program was only a "side-line activity," he also concluded that claimant must be deemed to be self-employed. This decision was apparently based on the fact that claimant did not sign the agreement with Nu Skin until after she was laid off, thus excluding her from the exception in subsection (h) for activities undertaken while still employed full-time. However, the fact that an activity which may generate a limited amount of income is not undertaken while a claimant is still employed does not automatically make it "self-employment".

The term "self-employment" is not statutorily defined, and in considering this issue in the past we have looked for guidance to language in section 4(l )(2)(B) ³ relating to the definition of employment. Unemployment Compensation Board of Review v. Kessler, 27 Pa.Commonwealth...