Friday, July 10, 2009

UC - eligibility - employer/claimant agreement

Goldsmith v. UCBR - Cmwlth. Court - July 9, 2009 - unreported memorandum decision

This is an unreported decision, but there's still a lot of important, useful stuff in it. The discussion about referees duties highlights why advocates should not bring claimants into willful misconduct hearings under some circumstances, e.g., the employer doesn't show up or doesn't bring witnesses with first-hand information.


During the course of administrative proceedings in a UC case, claimant and employer entered into an agreement and sumitted it to the UCBR as a "stipulation." The terms included the employer dropping opposition to the UC claim. The Board ignored the stipulation and issued a decision.

Employer-claimant agreements about eligibility are not valid - The Court held that the Board's failure to address the stipulation was proper, since "[i]n the context of unemployment compensation benefits, '[a]n employer and employee . . . cannot determine the employee’s entitlement to benefits by subsequent agreement” after a finding that Claimant, under the facts of the case, is not legally entitled to benefits. Sill-Hopkins, 563 A.2d at 1289; Cozzone v. UCBR, 103 A.2d 284, 285 (Pa. Super. 1954); Turner v. UCBR, 381 A.2d 223, 224 (Pa. Cmwlth. 1978). Similarly, the courts have refused to give determinative weight to an agreement between an employer and a claimant that resolved their dispute that had led to the claimant’s discharge, and affirmed the denial of benefits even when, by agreement, employer reinstated claimant in his position. Nesmith v. UCBR, 402 A.2d 1132, 1133 (Pa. Cmwlth. 1979).

A key reason behind this principle is that “[t]he Board is charged with the duty of safeguarding the [unemployment compensation] fund.” Phillips v. UCBR, 30 A.2d 718, 723 (Pa. Super. 1943); see also Amspacher v. UCBR, 479 A.2d 688, 691 (Pa. Cmwlth. 1984) (the Commonwealth has a “duty to protect the unemployment compensation fund against dissipation by those not entitled to benefits.”)....[P]rivate agreements between claimants and employers that rely on the fund threaten the viability of the unemployment compensation system." Department of Labor and Industry v. UCBR, 418 Pa. 471, 211 A.2d 463, 469-470 (1965).

In this case, employer and claimant essentially seek to use the UC fund as the source of a settlement of Claimant’s separate civil rights claims against the Employer. Such purpose is not congruent with the purposes behind the UC Law.

Duty to referee to develop record - This safeguarding responsibility requires the referee and Board to examine the facts of each case to determine if the circumstances surrounding a claimant’s unemployment qualify that claimant, under the law, for compensation from the fund. See PTC v. UCBR (In re Gagliardi), 141 A.2d 410, 415 (Pa. Super. 1958) (“It is the duty of the referee, as representative or agent for the board ‛to fairly develop the facts.’”) This duty extends beyond merely passively “hearing the witnesses who voluntarily appear,” and gives “the referee or the Board [the responsibility] to call witnesses” should “additional testimony [be] required” to adequately assess the factual circumstances surrounding a claimant’s unemployment. Phillips, 30 A.2d at 723.

The responsibility is necessary, in part, because an employer’s interests may not coincide with the Board’s interest of protecting the fund. Given this possible divergence of interests, the Board and referee must necessarily investigate the circumstances, independent of any representations made by the Employer. See generally, DiGiovanni v. UCBR, 404 A.2d 449, 450 (Pa. Cmwlth. 1979) (noting the responsibility of the Board to protect the unemployment compensation fund, as well as the investigative power of the Board toward that end, and citing to numerous cases of this Court where an employer’s nonparticipation had no bearing on the ultimate decision).