Thursday, May 13, 2010

UC - employee v. indpt. contractor

Resource Staffing v. UCBR - Cmwlth. Court - May 13, 2010

Claimant held to have been disqualified under 43 P.S. §802(h), which provides that an employee shall be ineligible for compensation for any week in which he is engaged in self-employment.

Claimant is an experienced Microsoft systems engineer and administrator. RSI, an information technology consulting agency, located Claimant’s resume on and offered him a six-month contract position. Claimant signed a Contractor Agreement on October 30, 2006, and he worked for Carpenter Technology (the client), at the client’s facility, from November 13, 2006, through September 20, 2007.

Section 4(l)(2)(B) of the Law creates a presumption that an individual working for wages is an employee. Beacon Flag Car Company, Inc. v. UCBR, 910 A.2d 103 (Pa. Cmwlth. 2006). A putative employer has the burden to overcome this presumption by demonstrating that: (1) the individual was free from control or direction in the performance of his work;6 and (2) the individual was customarily engaged in an independently established trade, occupation, profession or business while providing such services.
We agree with RSI that the record does not support the Board’s pertinent findings of fact; to the contrary, the record reflects that RSI did not control or have the authority to control Claimant’s work or manner of work. Claimant himself testified that RSI did not provide him with his daily assignments. Instead, Claimant testified that he was given work each day by a manager employed by the client and that he was supervised by numerous individuals who worked for the client.7 (R.R. at 17a, 25a.) This testimony is consistent with the terms of the Contractor Agreement, which state that Claimant shall have the discretion to control the means and manner of his work and that the evaluation of his performance shall be made by the client.

We conclude that the Board’s analysis distorts the evidence. The evidence of record indicates that RSI exercised the minimal amount of control necessary to ensure the quality of services provided to the client. Therefore, we conclude that the Board’s contrary findings of fact are not supportedby substantial evidence and that RSI satisfied its burden to demonstrate that it did not control Claimant’s work or manner of performance.

The second prong of the independent contractor test focuses on whether a claimant was engaged in an independently established trade. Viktor, Ltd. v. Department of Labor and Industry, 586 Pa. 196, 892 A.2d 781 (Pa. 2006). The following factors are relevant in determining if a claimant operated independently: (1) whether the individual was capable of performing the activities in question to anyone who wished to avail themselves of the services; and (2) whether the nature of the business compelled the individual to look to only a single employer for the continuation of such services. Krum v. UCBR, 689 A.2d 330 (Pa. Cmwlth. 1997).

Claimant was not compelled to look to one employer for the continuation of services; Claimant was permitted to provide services to RSI, the client or other employers. In addition, although the Contractor Agreement included a non-compete clause, this Court has repeatedly held that the inclusion of a non-compete clause, by itself, does not establish an employee and employer relationship. Beacon. Thus, we conclude that the evidence does not support the Board’s determination but, instead, establishes that RSI satisfied its burden to demonstrate that Claimant operated independently.

Because we conclude that Claimant was an independent contractor, we hold that Claimant is ineligible for unemployment benefits pursuant to section 402(h) of the Law. Accordingly, we reverse the decision of the Board.