Humanus Corp. v. UCBR – Cmwlth. Court – October 23, 2020 – reported decision – precedential
http://www.pacourts.us/assets/opinions/Commonwealth/out/1193CD19_10-23-20.pdf?cb=1
Held: Tutor at private school was not a self-employed independent contractor, in spite of fact that: he signed indpt. contractor agreement; provided own computer, got no training, etc. etc.
The act of signing an independent contractor agreement does not, in and of itself, establish independent contractor status. Sharp Equip. Co. v. UCBR, 808 A.2d 1019 (Pa. Cmwlth. 2002). We also observe that, “in concluding whether an employment relationship exists, no single factor is controlling.” Clark v. UCBR, 129 A.3d 1272, 1278 (Pa. Cmwlth. 2015). In the present matter, the parties agree that Claimant operated free from employer’s direction and control, in satisfaction of the first prong of the two-pronged test, thus this matter is narrowed to the issue of whether employer met its burden on the second prong of the test set out in Section 4(l)(2)(B) of the Law, i.e., whether employet proved that Claimant was customarily engaged in an independently-established trade, occupation, profession, or business.
There is no dispute that, among other things, Claimant signed an independent contractor agreement with employer, which provided referrals to Claimant which he was permitted to accept or refuse, and that employer did not provide Claimant with any tools or equipment to perform his tutoring services. Claimant received no training or resources, except access to a video conferencing tool. He uses his own laptop computer, and he buys his own supplies. In addition, Claimant obtains, and pays for, his own background checks and clearances.
In our en banc opinion in Lowman, we re-enunciated standards set forth in our earlier opinion in Buchanan, in which we looked to whether the claimant had taken a “positive step” toward establishing a business. Lowman, 178 A.3d at 900 (quoting Buchanan, 581 A.2d at 1008). In Lowman, we specifically weighed such factors as whether the claimant had advertised, listed a business phone number, had business cards, obtained insurance, and whether the claimant’s actions reflected “an entrepreneurial spirit” or “intentions of starting a new business [or] trade.” Lowman, 178 A.3d at 903 (quoting Buchanan, 581 A.2d at 1008).
However, our Supreme Court, in its recent opinion in Lowman v. UCBR, __ A.3d __ (Pa., No. 41 EAP 2018, filed July 24, 2020), stated that “[e]ither a claimant is self-employed or not. The concept of referring to activities as “positive steps” adds nothing to the analysis of the actual services performed by a claimant.” Id. at __, slip op. at 14 n.23. Our Supreme Court, in Lowman, stated “[w]e express no opinion on the use of a ‘positive steps’ analysis as part of the test for self- employment embodied in Section [4(l)(2)(B) of the Law] where the personal services are performed by an individual in a stand-alone context.” Id. at __, slip op. at 14 n.24.
The Lowman Supreme Court opined that its interpretation of this [Section] “promotes a comprehensive understanding of a claimant’s personal services. Unlike the ‘positive steps’ test, which focuses on a claimant’s stand-alone activities, Section [4(l)(2)(B)] requires a structured two-factor analysis of a claimant’s personal services where they are performed within the context of a work relationship with a third party.” Id. at __, slip op. at 14.
Our Supreme Court added:
In the context of determining whether an individual is engaged in self-employment and therefore, ineligible for benefits, an analysis using Section [4(l)(2)(B) of the Law] does not evaluate what a claimant could do, but what he has done and/or is doing in terms of providing personal services for remuneration. Looking at a claimant’s real-time activities through the lens of Section [4(l)(2)(B) of the Law] avoids speculation based on hypothetical considerations and aids in evaluating a claimant’s actual status for eligibility purposes. Id. at __, slip op. at 17.
In the present matter, there is no evidence that Claimant took any sort of positive step toward establishing a business. However, whether we utilize a “positive step(s)” analysis or not, Claimant was not a trained tutor who made his services available to anyone but the School. He secured the tutoring position through Humanus. He worked 15 hours per week as a tutor for the School. Although he could have accepted other tutoring assignments had they come along, he did not, and it does not appear from the record that he sought any such other opportunities. In fact, as the Board argued, Claimant would have had little time, if any, to pursue such opportunities, in light of his acceptance of a non-tutoring, 32-hour per week position with Clyde Peeling’s Reptile Land. His real time activities indicate he was engaged as a tutor for 15 hours per week, strictly for the School, through employer.
In addition to its recent pronouncement(s) in Lowman, our Supreme Court opined, in A Special Touch v. Department of Labor and Industry, Office of Unemployment Compensation Tax Services, 228 A.3d 489 (Pa. 2020), a case, like Stage Road Poultry Catchers, regarding employment status for UC tax purposes, that the “phrase ‘customarily engaged,’ as used in Section 4(l)(2)(B) of the Law, requires that an individual actually be involved, as opposed to merely having the ability to be involved, in an independently established trade, occupation, profession, or business.” Id. at 505-06. Based on the evidence of record, there is no indication that Claimant, here, met such a standard.
Based on the evidence of record and the leading law, there was no error by the Board in its determination that employer failed to meet its burden of proving Claimant was self-employed. Although it is true that Claimant operated with a certain amount of independence in his relationship with employer, there is insufficient evidence to support the alternative outcome, i.e., that Claimant was customarily engaged in an independently established profession and, thus, was ineligible for UC benefits..
