Sunday, July 05, 2020

admin. law - hearsay - exceptions - applicability of Pa. Rules of Evidence

Lancaster Co,. CYS v. DHS – Cmwlth. Court – July 1, 2020 – reported decision

Held: Police officer’s testimony--to which alleged abuser mother did not object at admin. hearing--about the unobjected-to statement of father to police at scene of alleged child abuse was admissible as an excited utterance—an exception to the hearsay rule--to prove that the mother was alone in her car when she overdosed on heroin.

DHS found that the CYS had not proved its case, because, inter alia, it was based on uncorroborated hearsay—the testimony about what the police officer said at the scene. CYS appealed, arguing that DHS erred in excluding it from consideration as hearsay because: (1) corroborating evidence [to support the unobjected-to hearsay] existed in the form of Officer Ayers’ first-hand observations of the scene; and (2) the Father’s statements constituted an “excited utterance” and, therefore, are subject to a hearsay exception.  The court reversed the DHS decision on the basis of (1).

From the opinion:
Hearsay is a statement, other than the one made by a declarant while testifying at the trial or hearing, offered into evidence to prove the truth of the matter asserted in the statement. Pa. R.E. 801(c). Generally, hearsay is not admissible under the Pennsylvania Rules of Evidence. Pa. R.E. 802. We recognize, however, that “Commonwealth agencies [are] not . . . bound by technical rules of evidence at agency hearings, and all relevant evidence of reasonably probative value may be received.” A.Y. v. Dep’t of Pub. Welfare, Allegheny Cty. Children & Youth Servs., 641 A.2d 1148, 1150 (Pa. 1994) (citing 2 Pa. C.S. § 505). 

We have consistently applied the following standard, referred to as the Walker Rule, to determine whether hearsay evidence is admissible at administrative proceedings: 
(1) Hearsay evidence, [p]roperly objected to, is not competent evidence to support a finding of [an agency][;] 

(2) Hearsay evidence, [a]dmitted without objection, will be given its natural probative effect and may support a finding of [an agency], [i]f it is corroborated by any competent evidence in the record, but a finding of fact based [s]olely on hearsay will not stand. 

Rox Coal Co. v. Workers’ Comp. Appeal Bd. (Snizaski), 807 A.2d 906, 915 (Pa. 2002) (citing Walker v. UCBR, 367 A.2d 366, 370 (Pa. Cmwlth. 1976)). The Walker Rule “need not be considered if evidence is admissible under an exception to the hearsay rule.” Estate of Fells by Boulding v. UCBR, 635 A.2d 666, 669 (Pa. Cmwlth. 1993), appeal denied, 647 A.2d 905 (Pa. 1994). 

One of the more well-established exceptions to the inadmissibility of hearsay evidence is commonly referred to as the “excited utterance exception,” and it is set forth among other hearsay exceptions in Pennsylvania Rule of Evidence 803. Specifically, Rule 803(2) defines an “excited utterance” as: 

A statement relating to a startling event or condition, made while the declarant was under the stress of excitement that it caused. When the declarant is unidentified, the proponent shall show by independent corroborating evidence that the declarant actually perceived the startling event or condition. 
Pa. R.E. 803(2). 

The court held that the father’s statement satisfied the requirements of Pa. R.E. 803(2) and where thus admissible to help prove abuse by the mother. The court also noted that mother did not object the father’s hearsay statement. For some reason, the court did not then go on to determine if it was supported by some other competent evidence in the record, as per the Walker rule.

In addition, there is a reasonable argument that the court improperly considered the Pa. Rules of Evidence.Rule 101 – scope and citation of rules, says that the rules “shall govern proceedings in all courts of the Commonwealth.” The Comment to the Rules clarifies that this means that the rules “are not intended to supersede these other provisions of law unless they do so expressly or by necessary implication” and—more important—that the rules “are applicable only to courts. . . . They are not applicable to other tribunals, such as administrative agencies and arbitration panels, except as provided by law or unless the tribunal chooses to apply them.” [emphasis added]

In this writer’s opinion, the court’s consideration of hearsay exceptions has the potential of poking a big hold in the Walker rule.

Monday, June 29, 2020

UC - wages - wages used to get benefits in other state cannot subsequently used in PA

George v. UCBR – Commonwealth Court – April 13, 2020 – order to be reported June 23, 2020

Held: Claimant not eligible for UC benefits in Pennsylvania based on same wages used in prior North Carolina receipt of UC benefits.

Claimant filed a UC application in North Carolina in May 2018, establishing a base year for his North Carolina claim of January 1, 2017 through December 31, 2017. . . .The unemployment authorities determined that, under North Carolina law, Claimant was entitled to UC benefits in the amount of $350 per week for a maximum of 12 weeks.  

After exhausting his N.C. benefits, claimant applied for Pa. UC benefit. Under 34 Pa. Code § 65.132(a), Claimant would be permitted to file a subsequent UC claim in Pennsylvania but only if he had “available benefit credits” in Pennsylvania. The Board found that, under 34 Pa. Code § 65.133(a), because North Carolina had used all of Claimant’s wages from 2017, including those earned in Pennsylvania, to determine his financial eligibility in North Carolina, and because Claimant exhausted his benefit credits in North Carolina, “[C]laimant had no available credits left . . . that could be used in calculating his financial eligibility in Pennsylvania.”

North Carolina used Claimant’s wages from 3Q and 4Q 2017 to determine his eligibility for UC benefits in that state, and those two quarters also fell within Claimant’s base year for his Pennsylvania claim. Under Pennsylvania law, when a claimant’s quarterly wages are used to determine his or her eligibility for UC benefits in a prior base year, they “cannot be used again to calculate [the c]laimant’s eligibility in [a] subsequent application for UC benefits.” Logan v. UCBR, 103 A.2d 451, 453 (Pa. Cmwlth. 2014); see Lewis v. UCBR, 454 A.2d 1191, 1193 (Pa. Cmwlth. 1983) (“[W]e would doubt that the legislature intended a claimant to be entitled to use the same quarter’s wages twice – i.e.[,] for two successive benefit years.”). 

Consequently, because North Carolina used Claimant’s wages from 3Q and 4Q 2017 to establish his financial eligibility for UC benefits in that state, we conclude that Claimant could not use those same quarterly wages to establish his financial eligibility in Pennsylvania. 

See also, federal combined benefits regulations, relevant but not used as a basis for the UCBR decision. See 20 C.F.R. § 616.1, et seq.

Wednesday, June 24, 2020

UC - indpt. contractor - claimant's individual circumstances

Begovic v. UCBR – Cmwlth. Court – June 23, 2020 – reported decision

Held: Claimant’s wages for two separate employers were earned in “employment.” Neither employer sustained its burden under  the independent contractor/self-employment exemption is set forth in section 4(l)(2)(B) of the Law, 43 P.S. §753(l)(2)(B), which provides, 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 [local service center] 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. 

This provision presumes that an individual is an employee, as opposed to  an independent contractor, but this presumption may be overcome if the putative employer sustains its burden of showing that the claimant was free from control and direction in the performance of her service and that, as to such service, was customarily engaged in an independent trade or business. Beacon Flag Car Co. v. UCBR, 910 A.2d 103, 107 (Pa. Cmwlth. 2006). Unless both of these showings are made, the presumption stands that one who performs services for wages is an employee. York Newspaper Company v. UCBR, 635 A.2d 251 (Pa. Cmwlth. 1993), appeal denied, 647 A.2d 906 (Pa. 1994); Electrolux Corporation v. Department of Labor & IndustryBureau of Employment Tax Operations, 705 A.2d 1357, 1360 (Pa. Cmwlth. 1998). 

Neither employer satisfied the second prong of the statutory test, i.e., that Claimant was actually in the business of a) canvassing public opinion or b) acting as a language interpreter for a number of health care organizations in the Pittsburgh area. 
Our Supreme Court recognized that “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 & Industry, Bureau of Employer Tax Operations, 892 A.2d 781, 798 (Pa. 2006) (emphasis added). Our Supreme Court in Danielle Viktor, Ltd. established a three-part test for determining whether a putative employee is engaged in “an independently established trade, occupation, profession or business” under this second prong. 

Specifically, under Danielle Viktor, Ltd., we look at the following factors: (1) whether the individuals are able to work for more than one entity; (2) whether the individuals depended on the existence of the presumed employer for ongoing work; and (3) whether the individuals were hired on a job-to-job basis and could refuse any assignment. 892 A.2d at 801-02. Moreover, as part of the second prong, we must analyze whether “the claimant [was] customarily engaged in such trade or business in order to be considered self-employed.” Minelli v. UCBR, 39 A.3d 593, 598 (Pa. Cmwlth. 2012) (en banc) (emphasis in original). 

Recently, in A Special Touch v. Department of Labor and Industry, __ A.3d __ (Pa., No. 30 MAP 2019, filed April 22, 2020, slip op. at *22-23), 2020 WL 1932622 at *10, our Supreme Court clarified that the meaning of the phrase “customarily engaged” requires an individual to be “usually,” “habitually,” or “regularly” “employed” or “involved” in activity; or “employed” or “involved” in activity “according to the customs,” “general practice,” or “usual order of things.” 

The Supreme Court has instructed a putative employer must show that an individual is actually involved in an independent trade, occupation, profession, or business in order to establish that the individual is self-employed under the second prong of subsection (4)(l)(2)(B). Id. [emphasis added]  The UCBR and courts are obligated to examine “such individual[’s]” unique set of circumstances. . .  .The proper approach is to focus the inquiry on the conduct of the individual claimant. Thus, the appropriate inquiry is whether the claimant, was, in fact, customarily engaged in a trade, occupation, profession or business that was independently established. See A Special Touch. See also Glatfelter Barber Shop v. UCBR, 957 A.2d 786 (Pa. Cmwlth. 2008). 
Here, there is no indication that Claimant held herself out as being in the business of either a canvasser or interpreter for hire.

Wednesday, June 17, 2020

employment - non-compete agreements - Pa. SCt.

Restrictive covenants are generally disfavored in Pennsylvania as they constitute a restraint on trade that also undercuts a former employee’s ability to earn a living. . . .[citations omitted] That principle is tempered to some degree by the recognition that, in the modern business environment, such covenants can be “important business tools” which prevent individuals from “‘learning [employers’] trade secrets, befriending their customers and then moving into competition with them.’” . . . .

To be enforceable, a restrictive covenant must be incident to an employment relationship between the parties and supported by consideration; also, its restrictions must be reasonably necessary for the protection of the employer’s legitimate interests and reasonably limited in duration and geographic extent. [citations omitted] . . . .

A bright-line rule such as that utilized by the Superior Court [concerning the necessity of new consideration] could subvert the expectations of parties who fully anticipate and intend the restriction to be ancillary to the taking of employment, but the employee, for whatever reason, signs the covenant shortly after the first day. Alternatively, such an approach might unnecessarily delay an employee’s ability to begin earning income if he or she is not in a position to sign the agreement until a reasonably short period after work begins. 

Hence, the test for whether new consideration is required has not ordinarily centered on whether the employee physically executed the agreement precisely on (or before) the first day of employment. Rather, and as explained, restrictive covenants have been deemed enforceable absent fresh consideration in situations where the parties contemplated and intended that, incident to the employment relationship, the employee would be bound by its substantive terms – and the employee ultimately signed it shortly after the first day. 

This is in contrast with circumstances where a non-compete agreement is imposed on an employee essentially as a belated addition to the employment relationship. See generally Jordan Leibman & Richard Nathan, The Enforceability of Post-Employment Noncompetition Agreements Formed After At-Will Employment Has Commenced: The “Afterthought” Agreement, 60 S. CAL. L.REV. 1465, 1472 (1987) (referring to these as “afterthought agreements”). In Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 314 A.2d 279 (1974), for example, this Court found a non-compete clause unenforceable where it was not in the original, oral employment contract, but appeared when the contract was reduced to writing the next year and was unsupported by new consideration. See id. at 330, 314 A.2d at 281. 

From the foregoing it should be evident that, for a restrictive covenant executed after the first day of employment to be enforceable absent new consideration, the parties must have agreed to its essential provisions as of the beginning of the employment relationship. Only in that circumstance will the covenant in substance be “ancillary to taking employment[.]” Pulse Techs., Inc. v. Notaro, 620 Pa. 322, 327, 67 A.3d 778, 781 (2013) (quoting Beneficial Finance, 422 Pa. at 534, 222 A.2d at 875). 

In this respect, [the employee] argues that, as with other types of agreements, there must be a meeting of the minds on the terms of [the] restrictive covenant. Thus, before preliminary negotiations ripen into contractual obligations, there must be evidence of mutual assent to the terms of a bargain. If “the parties themselves contemplate that their agreement cannot be considered complete, and its terms assented to, before it is reduced to writing, no contract exists until the execution of the writing.”  . . . . In making an assessment along these lines, it may not be necessary to prove an actual, subjective “meeting of the minds,” as objective manifestations of assent and/or an intent to be bound by the covenant’s substance can suffice. 

This case is also reported in the PLAN Legal Update , which is searchable and can be accessed without a password.

Tuesday, June 09, 2020

UC - credibility - Board ultimate finder if substantial evidence

Casey Ball Supports Corporation v. UCBR – June 9, 2020 – Cmwlth. Court – unreported memorandum opinion **

We turn first to the Board’s issuance of its own decision. Contrary to Employer’s suggestion, the Board is the ultimate finder of fact in unemployment compensation cases with the power to determine credibility and evidentiary weight. Peak v. Unemployment Comp. Bd. of Review, 501 A.2d 1383, 1388 (Pa. 1985); Oliver v. Unemployment Comp. Bd. of Review, 5 A.3d 432, 438 (Pa. Cmwlth. 2010). The Board’s findings of fact are conclusive on appeal when the record, in its entirety, contains substantial evidence supporting those findings. Oliver, 5 A.3d at 438. Additionally, although Employer challenged the legality of the Board’s issuance of findings of fact, Employer failed to make specific challenges to any of those findings. Accordingly, the findings are conclusive on appeal. Campbell v. Unemployment Comp. Bd. of Review, 694 A.2d 1167, 1169 (Pa. Cmwlth. 1997). 

Where, as here, both parties submitted evidence, there was no need for the Board to specify why it deviated from the referee’s findings of fact and conclusions of law. Peak, 501 A.2d at 1386-87; Hasely v. Unemployment Comp. Bd. of Review, 553 A.2d 482, 487 (Pa. Cmwlth. 1989). Consequently, the fact that the referee personally observed the witnesses is of no moment. 

Finally, as long as there is substantial evidence for the Board’s findings, “[t]he fact that Employer may have produced witnesses who gave a different version of the events, or that Employer might view the testimony differently than the Board, is not grounds for reversal . . . .” Tapco, Inc. v. Unemployment Comp. Bd. of Review, 650 A.2d 1106, 1108-09 (Pa. Cmwlth. 1994). Here, the Board credited Claimant’s testimony and we cannot overturn that credibility determination on appeal. 

Fitzpatrick v. Unemployment Comp. Bd. of Review, 616 A.2d 110, 111 (Pa. Cmwlth. 1992). We are bound to view the evidence in the light most favorable to Claimant, as the party who prevailed before the Board, and give her the benefit of all inferences that can logically and reasonably be drawn from the testimony. Chapman v. Unemployment Comp. Bd. of Review, 20 A.3d 603, 607 (Pa. Cmwlth. 2011). 


This case is also reported in the PLAN Legal Update , which is searchable and can be accessed without a password.

**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

Friday, May 29, 2020

UC - voluntary quit - safety concerns - objective evidence

Morgan v. UCBR – Cmwlth. Court – May 29, 2020 – unreported* memorandum opinion

Claimant that it was necessary for him to quit his job out of fear for the safety of the children served by Employer and “concern” for his own professional reputation if he continued to work for Employer under circumstances involving alleged child neglect. 

. . . The Board and Employerargue that Claimant failed to meet his burden, because he did not sufficiently describe any reasons for his concerns or fears before the Referee but instead made nonspecific, conclusory statements that conditions were unacceptable. The Board also emphasizes Claimant’s admission that he spoke only to his friends—not to Employer—about his concerns, and that he did not discuss his concerns with anyone until the day before he voluntarily quit. 

We agree with the Board and Employer that Claimant failed to establish a necessitous and compelling reason to quit. Although safety concerns may give rise to such reasons, the claimant must “demonstrate[] by objective evidence” that the workplace is actually unsafe, and “‘fears’ alone do not constitute a compelling reason to resign.” Green Tree Sch. v. Unemployment Comp. Bd. of Review, 982 A.2d 573, 578 (Pa. Cmwlth. 2009). Here, Claimant offered no objective evidence that the conditions of his employment were unsafe, either for himself or for the children served by Employer. Accordingly, Claimant failed to demonstrate circumstances that exerted real and substantial pressure on him to terminate his employment. 

Whether a claimant had cause of a necessitous and compelling nature for leaving work is a question of law subject to this Court’s review. Brunswick Hotel & Conference Ctr., LLC v. Unemployment Comp. Bd. of Review, 906 A.2d 657, 661 (Pa. Cmwlth. 2006). A claimant who voluntarily terminates his employment “bears the burden of proving that necessitous and compelling reasons motivated that decision.” Fitzgerald v. Unemployment Comp. Bd. of Review, 714 A.2d 1126, 1129 (Pa. Cmwlth. 1998), appeal denied, 794 A.2d 364 (Pa. 1999). To establish cause of a necessitous and compelling nature, a claimant must establish: (1) circumstances existed that produced real and substantial pressure to terminate employment, (2) like circumstances would compel a reasonable person to act in the same manner, (3) the claimant acted with ordinary common sense, and (4) the claimant made a reasonable effort to preserve his employment. Procito v. Unemployment Comp. Bd. of Review, 945 A.2d 261, 264 (Pa. Cmwlth. 2008) (en banc). 

*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

Friday, May 22, 2020

evidence- digital evidence - Rule 901

Order – effective date 10-01-2020