Wednesday, January 18, 2017

UC - overpayment - fault v. non-fault - "honest mistake"

Fugh v. UCBR – Cmwlth. Court – January 18, 2017 – en banc


Firmly rejecting the UCBR’s suggestions to change the law, the court held that an overpayment came under the non-fault provisions of 43 P.S. 874(b) and not the fault provisions of 43 P.S. 874(a), where

            - “honest mistake” - the Board made a finding that Claimant made an “honest mistake” in filling out her UC application online.   She said that her unemployment was caused by lack of work after she quit due to a reduction of hours that would not have constituted good cause to quit her job.  Claimant “construed ‘lack of work’ to refer to a reduction in work available to her, which described her situation.”
            - no intentional failure to disclose information, no false statement – the Board also made specific findings to this effect

The en banc court rejected the UCBR’s suggestions that it should overrule the long-standinbg (40 years) precedent of Cruz v. UCBR, 531 A.2d 1178 (Pa. Cmwlth. 1987) and Daniels v. UCBR , 309 A.2d 738, 741 (Pa. Cmwlth.), holding that “fault” is a “term that ‘connotes an act to which blame, censure, impropriety, shortcoming, or culpability attaches.”  It involves a “blameworthy act” that shows the actor’s wrongful state of mind.   The court said that the “commission of a mere voluntary act does not establish fault. . . .The Board cannot hold a claimant liable for a fault overpayment for a mere mistake or confusion.” 

The court also noted the legislature’s silence and inactivity in the face of the holdings in Daniels and Cruz.

The court said that “our long held construction of ‘fault’ is not in need of ‘correction.’  It is as sound today as it was 40 years ago.  The revision to the Section 804 paradign proposed by the Board is one for the General Assembly to make.

Congratulations and thanks to Kevin Burke of NWLS and Julia Simon-Mishel of PLA for their work on this case.
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Tuesday, January 17, 2017

UC - late registration for employment services is NOT an automatic disqualification

Jakubowicz v. UCBR – Cmwlth. Court – unreported* memorandum opinion – January 17, 2017


Late registration for employment search services is “not a per se violation of” 43 P.S. 801(b)(1)(i) and 34 Pa. Code 65.11(c), which require registration within 30 days of initial application for benefits.

Footnote 10 –

In Department of Labor & Industry v. Unemployment Compensation Board of Review, 131 A.3d 597 (Pa. Cmwlth. 2016), this Court explained:
A failure of a claimant to register timely in accordance with Section 401(b)(1)(i) of the Law is not a per se violation that automatically disqualifies a claimant from unemployment compensation. Section 401(b)(6) of the Law provides that ‘[t]he [D]epartment may waive or alter the requirements of this subsection in cases or situations with respect to which the secretary finds that compliance with such requirements would be oppressive or which would be inconsistent with the purposes of this act.’ 43 P.S. § 801(b)(6). In Sharpe v. Unemployment Compensation Board of Review (Pa. Cmwlth.[] No. 431 C.D. 2014, . . . filed October 21, 2014), this Court addressed the Department’s ability to waive the registration requirement. We observed as follows:

During the promulgation of the Department’s regulations implementing Section 401(b) [of the Law], a commenter asked whether a ‘good cause’ standard should be incorporated into the [R]egulations. 43 Pa. B. 4730, 4735 (2013). The Department replied that in most cases where a ‘good cause’ standard is applied, it is because it is directed by statute and that it would not adopt one on its own initiative. Id. However, the Department noted that, ‘if a claimant’s ‘good cause’ for noncompliance with the regulation also constitutes a reason why compliance ‘would be oppressive or . . . inconsistent with the purposes of’ the law, the claimant’s circumstances could be addressed under the waiver provision in [S]ection 401(b)(6) of the [L]aw and [the Regulation Section 65.11(f)(6)].’ Id. [Sharpe, slip op.] at 6-7.

In short, where a claimant can show ‘good cause’ for not registering on time, the Department may waive the time requirement of Section 401(b)(1)(i) of the Law.

The Law does not define ‘good cause,’ and our Supreme Court has established that it ‘must be determined in each case from the facts of  that case.’ Barclay White Co. v. Unemployment Comp[.] B[d.] of Review, . . . 50 A.2d 336, 340 ([Pa.] 1947). In each case, ‘good cause’ must be ‘so interpreted that the fundamental purpose of the [Law] shall not be destroyed.’ Id. The central purpose of Section 401(b) of the Law is to require claimants to make ‘an active search for suitable employment’ while collecting benefits. 43 P.S. § 801(b).
. . . .
[T]he [UCBR] has abandoned the nunc pro tunc standard for evaluating a waiver of the on-line registration time requirement. Instead, it argues for a more relaxed standard, noting that not every claimant can be expected to be ‘computer savvy’ and that a single keystroke mistake can fail to effect a registration. Further, registration cannot be done by letter or by phone call. The [UCBR] rejects the argument of the Office of UC Benefits in favor of a strict liability standard. The [UCBR] believes, instead, that a case-by-case examination of ‘good cause’ is appropriate and consistent with the remedial and humanitarian objectives of the Law, which should not be frustrated ‘by slavish adherence to technical and artificial rules.’ Lehr v. Unemployment Comp[.] B[d.] of Review, . . . 625 A.2d 173, 175 ([Pa. Cmwlth.] 1993) (quoting Unemployment Comp[.] B[d.] of Review v. Jolliffe, . . . 379 A.2d 109, 110 ([Pa.] 1977)).
The [UCBR] explains that in on-line registration waiver cases, ‘good cause’ should be considered in the same way it is used to mitigate willful misconduct. . . .
. . . .
We agree with the [UCBR]’s case-by-case approach to evaluating whether a claimant had good cause for failing to timely register for employment search services under Section 401(b)(1)(i) of the Law, 43 P.S. § 801(b)(1)(i).

Dep’t of Labor & Indus., 131 A.3d at 600-02 (emphasis added; footnotes omitted).  
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*An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

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Tuesday, January 10, 2017

age discrimination - disparate impact - class action - subgroup 50+

Karlo et al. v. Pittsburgh Glass Works – 3d Cir. – January 10, 2017


The Age Discrimination in Employment Act (“ADEA”) protects only those individuals who are at least forty years of age. The question in this case is whether a disparate-impact claim is cognizable where a “subgroup” of employees at the upper end of that range—in this case, employees aged fifty and older— were alleged to have been disfavored relative to younger employees. We answer in the affirmative.

Our decision is dictated by the plain text of the statute as interpreted by the Supreme Court. In particular, the ADEA prohibits disparate impacts based on age, not forty-and-older identity. A rule that disallowed subgroups would ignore genuine statistical disparities that could otherwise be actionable through application of the plain text of the statute.   Although several of our sister circuits have ruled to the contrary, their reasoning relies primarily on policy arguments that we do not find persuasive.


We will therefore reverse the judgment of the District Court based on its interpretation of the ADEA. We will also vacate the District Court’s order excluding the testimony of plaintiffs’ statistics expert and remand for further Daubert proceedings. We will affirm in all other respects.

Thursday, December 08, 2016

tax sale - judicial sale - notice

In re Amended Petition of TCB of Washington County v. Miller – Cmwlth. Court – November 16, 2016


Undisputed facts show that former owner of property sold by repository sale, after judicial sale failed for lack of a bid, did not received notice required by 72 P.S.  5860.610.

The former owner is a party of interest that must be served. See Rivera v. Carbon County Tax Claim Bureau, 857 A.2d 208, 213-16 (Pa. Cmwlth. 2004); also Montgomery County Tax Claim Bureau v. Mermelstein Family Trust, 836 A.2d 1010 (Pa. Cmwlth. 2003); Bell v. Berks County Tax Claim Bureau, 832 A.2d 587 (Pa. Cmwlth. 2003).   This is because “owner” is defined by the Law as “the person in whose name the property is last registered, if registered according to law, or, if not registered according to law, the person whose name last appears as an owner of record on any deed or instrument of conveyance recorded in the county office designated for recording. . . .” Section 102 of the Law, 72 P.S. § 5860.102.

Although the owners were provided with proper notice prior to the initial upset sale, which did not go through, 72 P.S. § 5860.607(g), requires,  that they be served with notice regarding the judicial sale of the Property. The record clearly demonstrates they were not. Consequently, because strict compliance with the notice provisions of the Law is required, which the Bureau did not adhere to when selling the Property, the repository sale of the Property must be deemed void ab initio.
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tax sale - MCTLA - redemption - mixed-use property

City of Philadelphia v. Phan – Commonwealth Court – October 24, 2016


Owner of property which was mixed-use (barber shop ground floor; residential apartment on second) was entitled to redeem it from tax sale under 53 P.S. 7293, the Municipal Claims and Tax Liens Act.

The purpose of sheriffs’ sales under the Act is not to strip owners of their property, but to collect delinquent taxes. City of Philadelphia v. F.A. Realty Investors Corporation, 95 A.3d 377, 384 (Pa. Cmwlth. 2014). Thus, the Act provides property owners with the ability to recover tax-delinquent properties both prior to and after sheriffs’ sales thereof. See Sections 31 and 32 of the Act, 53 P.S. §§7292-7293, which allows redemption of a property which has been “occupied as a residence. . . for at least ninety days prior to the date of the sale and continues to be so occupied on the date of the acknowledgment of the sheriff's deed therefor.”  53 P.S. §7293(a), (c)

There is no requirement in the statute that the entire property have been occupied as a residence, and the Cout refused to imply one.  Nor is there a requirement that the residence be owner-occupied.  Here, the residential part of the unit was a rental property.
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Wednesday, December 07, 2016

UC - employee v. independent contractor

Farinhas Logistics v. UCBR – Commonwealth Court – December 5, 2016 – *unreported memorandum decision


The above case, though unreported, contains the following extended exposition of the issue of employee v. independent contractor

Employment Relationship
To be eligible for unemployment benefits, a claimant must show that his wages were earned from employment. 43 P.S. §§801(a), 753(x).9 Further, section 402(h) of the Law provides that an employee is ineligible for compensation for any week in which he is engaged in self-employment. 43 P.S. §802(h). Although “self-employment” is not defined, we examine the parties’ working relationship under section 4(l)(2)(B) of the Law,10 the purpose of which is to exclude independent contractors from coverage. Beacon Flag Car Company, Inc. (Doris Weyant) v. Unemployment Compensation Board of Review, 910 A.2d 103, 107 (Pa. Cmwlth. 2006).

To show that a claimant is a self-employed independent contractor, the employer must satisfy the two-pronged test set forth in section 4(l)(2)(B), which states, in pertinent part:

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 the 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.
43 P.S. §753(l)(2)(B).

This section creates a strong presumption that an individual rendering services for wages is an employee. Kurbatov v. Department of Labor and Industry, Office of Unemployment Compensation, Tax Services, 29 A.3d 66, 69 (Pa. Cmwlth. 2011). To overcome this presumption, the employer has the burden of demonstrating that the claimant “is not subject to the employer’s control and he is engaged in an independently established trade.” Frimet v. Unemployment Compensation Board of Review, 78 A.3d 21, 25 (Pa. Cmwlth. 2013). Both prongs under section 4(l)(2)(B) must be satisfied for a claimant to be self-employed under the Law; otherwise, the presumption of employment stands. Silver v. Unemployment Compensation Board of Review, 34 A.3d 893, 896 (Pa. Cmwlth. 2011).

In determining the existence of an employer/employee relationship, the court is required to examine the actual relationship of the parties. Hartman v. Unemployment Compensation Board of Review, 39 A.3d 507, 511-12 (Pa. Cmwlth. 2012). We noted that the terminology used by the parties to describe their relationship is not dispositive, id., and even a declaration in a contract stating that the claimant is an independent contractor may not necessarily satisfy the independent contractor test of section 4(l)(2)(B), Clark, 129 A.3d at 1277 n.11. Moreover, although the existence of a non-compete agreement is not determinative of the issue, the terms of the parties’ agreement must be considered. Kurbatov, 29 A.3d at 72.

Two-Prong Test
As noted above, Putative Employer must show that Claimant has been, and will continue to be, free from control or direction over the performance of such services. 43 P.S. §753(l)(2)(B)(a). In analyzing this first prong of the test, we consider the following relevant factors: how the claimant was paid; how taxes on the claimant's earnings were paid; whether the claimant or the person for whom [he] worked supplied tools or equipment necessary to perform the services; whether the person for whom claimant worked provided on-the-job training; whether claimant was required to attend meetings or report on [his] work; who set the time and location of the work; whether the claimant's work was subject to supervision or review; the terms of any written contract between the parties; the degree to which the claimant was directed with respect to the work; and whether the claimant was free to refuse work assignments without repercussions.
Stauffer v. Unemployment Compensation Board of Review, 74 A.3d 398, 405 (Pa. Cmwlth. 2013)  

Importantly, no single factor is controlling and the ultimate conclusion pertaining to control must be based on the totality of the circumstances. Quality Care Options v. Unemployment Compensation Board of Review, 57 A.3d 655, 660 (Pa. Cmwlth. 2012). Further, because each case is fact-specific, all of these factors need not be present to determine the type of relationship that exists. Id. However, “‘[w]hile all of these factors are important indicators, the key element is whether the alleged employer has the right to control the work to be done and the manner in which it was performed’ . . . an employer-employee relationship likely exists not only where the employer actually exercises control, but also where it possesses the right to do so.” Kurbatov, 29 A.3d at 70 (quoting York Newspaper Company v. Unemployment Compensation Board of Review, 635 A.2d 251, 253 (Pa. Cmwlth. 1993)) (alteration in original).

As to the second prong of the test, Putative Employer must demonstrate that “as to such services[,] such individual is customarily engaged in an independently established trade, occupation, profession or business.” 43 P.S. §753(l)(2)(B)(b). To determine whether a claimant is “customarily engaged in an  independently established trade, occupation, profession or business,” we look at whether the claimant was restricted from performing the services for others and whether anything in the nature of the work limits it to a single employer. Stauffer, 74 A.3d at 407. Evidence that a claimant is engaged in an independent business is an absolute prerequisite to a determination of self-employment. Quality Care Options, 57 A.3d at 666. As noted by our Supreme Court, “[a] worker can be considered an independent contractor only if he or she is in business for himself or herself.” Danielle Viktor, Ltd. v. Department of Labor and Industry, 892 A.2d 781, 798 (Pa. 2006).

Therefore, an employer must show that the claimant took positive steps toward establishing an independent business. Buchanan v. Unemployment Compensation Board of Review, 581 A.2d 1005, 1008 (Pa. Cmwlth. 1990). Further, the independent trade established must involve the same type of services that the claimant provided to the employer, Electrolux Corporation v. Commonwealth, Department of Labor and Industry, Bureau of Employer Tax Operations, 705 A.2d 1357 (Pa. Cmwlth. 1998), and the claimant must have performed those services for others, and not just for the employer, Peidong Jia v. Unemployment Compensation Board of Review, 55 A.3d 545, 548 (Pa. Cmwlth. 2012).

We have stressed the importance of an employer to submit evidence to show that claimant is engaged in an independent business. See id. at 549 (holding that without evidence that the claimant established an independent business or performed the same services for others, the employer could not establish the second prong of the test to overcome the statutory presumption of employment); see also Clark, 129 A.3d at 1277 (concluding that the employer failed to satisfy the second prong where there was no evidence that the claimant established a private enterprise or independent business through which he provided services to others).
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*An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

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child abuse - expunction - hearing - right to individual notice

J.P. v. Department of Human Services – Cmwlth. Court – November 21, 2016


J.P., paramour of child’s parent, was entitled to appeal and have a hearing to challenge the CYS finding that she had abused the child, because she had not received notice or opportunity to participate in a prior juvenile proceeding, which changed a finding of “indicated” to a finding of “founded.”

Commonwealth Court held that JP had not received adequate notice of the juvenile court hearing, nor had she received that court’s order.  A founded report of child abuse is an adjudication and that, under Section 504 of the Administrative Agency Law, 2 Pa.C.S. § 504, ‘[n]o adjudication of a Commonwealth agency shall be valid as to any party unless he shall have been afforded reasonable notice of a hearing and an opportunity to be heard.’  K.R. v. Dep’t of Pub. Welfare, 950 A.2d 1069, 1077 (Pa. Cmwlth. 2008) [emphasis in original].  “Due process of law requires notice to be given to the respondent so that [s]he may adequately prepare h[er] defense in such cases.” Straw v. Pa. Human Relations Comm’n, 308 A.2d 619, 621 (Pa. Cmwlth. 1973) [emphasis in original].

Here, the only notice provided regarding the dependency hearing was the notice to J.P.’s paramour. The fact that J.P. read his notice, does not transform his notice to her notice. This conclusion is especially true here, where J.P. testified that she “was told specifically from [CYS] themselves that any matter pertaining to anything that has to do with the [C]hild, I am not allowed to ask any questions” and she assumed she would not be permitted to participate in the dependency hearing because she was not the Child’s parent.

While “[DHS] may rely on the factual findings of the trial court in a dependency adjudication to dismiss an appeal for a request for expungement[,]” K.R., 950 A.2d at 1078, because J.P. did not receive notice prior to the adjudication, she did not receive the requisite due process for a valid adjudication.
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Tuesday, November 29, 2016

abuse - expungement - appeal - nunc pro tunc - confusing, equivocal notice

D.C. v. DHS – Cmwlth. Court – November 23, 2016 – en banc



Nunc pro tunc appeal permitted because of DHS’s “equivocal and confusing notice of how to get a hearing,” which “establihsed a breakdown in the administrative process,” thus entitling appellant to a nunc pro tunc appeal.

Friday, November 04, 2016

consumer protection - UTPCPL - justifiable reliance - causation

Kirwin v. Sussman Automotive – Pa. Superior Court – October 7, 2016


Held:  No violation of “catchall” provision of Consumer Protection Law, 73 P.S. 201-2)4)(xxi), where
- plaintiff got email solicitation from dealer with one price
- when P went to dealer, he was told that there had been computer error and actual price was $3,000 more
- knowing of this discrepancy, P paid the higher price, then sued under CPL

 UTPCPL’s “catchall” provision in 73 P.S. § 201-2(4)(xxi), which J-A17028-16 - 4 - provides liability for “fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.”  

“Deceptive conduct ordinarily can only take one of two forms, either fraudulent or negligent. . . . [T]he pre-1996 catchall provision covered only fraudulently deceptive practices. The broadening of the UTPCPL . . . makes negligent deception, e.g., negligent misrepresentations, actionable under the post-1996 catchall provision.” Dixon v. Northwestern Mutual, 2016 PA Super 186, -- A.3d -- (Aug. 25, 2016). Even with the broadening of the applicability of the catchall provision, in order to prevail on such a cause of action, “the UTPCPL plaintiff must still prove justifiable reliance and causation, because the legislature never intended [the] statutory language directed against consumer fraud to do away with the traditional common law elements of reliance and causation.” 

There was no “justifiable reliance” in this case, since P signed contract of sale with knowledge of the price discrepancy.  P did not make out a prima facie showing of justifiable reliance.,  and the UTPCPL claim alleging a “bait and switch” tactic on the part of car dealer must fail.
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