Consulting v. Unemployment Comp. Bd. of Review
185 A.3d 1190
Pa. Commw. Ct.2018Background
- Claimant worked for HPM Consulting as a safety consultant from Aug. 15, 2016 to Oct. 28, 2016 on a Minnesota jobsite; HPM set his hourly rate and issued a Form 1099; taxes were not withheld.
- On-site site manager (Brad Hoke) dictated Claimant’s daily hours and activities (daily safety meetings, badge in/out, daily reports, weekly timecards); HPM/contractor supplied most PPE and equipment.
- Claimant testified he did not hold himself out as in business for himself, did not solicit work, and historically had employers pay for his certifications.
- Referee denied benefits (finding independent-contractor status); UCBR reversed and granted unemployment compensation under 43 P.S. § 802(h) (self-employment disqualification). HPM appealed.
- Commonwealth Court majority: affirmed UCBR finding that Claimant was not self-employed (presumption of employment not overcome), but reversed the benefits award and remanded to determine whether HPM was Claimant’s employer and whether other disqualifications (e.g., § 402(b)) apply.
- Dissent: argued the Board capriciously disregarded critical documentary evidence (contracts, email, questionnaire) indicating independent-contractor status and would have vacated and remanded for full consideration.
Issues
| Issue | HPM's Argument | Claimant's Argument | Held |
|---|---|---|---|
| Whether Claimant was "engaged in self-employment" under §402(h) (i.e., independent contractor vs. employee) | Contract and communications labeled Claimant an independent contractor; Claimant received 1099; claimant set rate, paid own qualifications, not supervised | Claimant was controlled at the jobsite (hours, tasks, meetings); HPM set pay; Claimant did not hold himself out as a business and lacked independent trade | UCBR finding that Claimant was not self-employed affirmed (HPM failed to rebut employee presumption); but benefits award reversed and case remanded to determine employer identity and possible other disqualifications |
| Whether the Board capriciously disregarded material evidence (contracts, email, questionnaire) | Board ignored/failed to address written contracts and claimant’s prior acknowledgment of 1099 status | Board credited Claimant’s testimony and questionnaire answers; found no capricious disregard | Majority: issue waived in part and, on the record, Board did not capriciously disregard evidence; Dissent: would find capricious disregard and remand |
| Whether identity of the person exercising on-site control was established (impacts employer attribution) | HPM argued it engaged Claimant under contract (but evidence that on-site supervisor may have been contracted by HPM) | Claimant uncertain who paid on-site supervisor; testified about site manager control | Court: record unclear whose employee the site supervisor was; remand ordered for factfinding on whether HPM is the employer and, if so, whether other disqualifications apply |
| Remedy/procedure after mixed findings | HPM sought reversal of benefits grant | Claimant sought to keep UC award | Court: affirmed non-self-employment finding, reversed benefits award, remanded for additional factfinding (employer liability and potential §402(b) ineligibility) |
Key Cases Cited
- Krum v. Unemployment Compensation Board of Review, 689 A.2d 330 (Pa. Cmwlth.) (independent-contractor/referral-agency context)
- Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593 (Pa. Cmwlth. 2012) (statutory presumption of employment; employer bears burden to prove independence)
- Lello v. Unemployment Compensation Board of Review, 59 A.3d 1153 (Pa. Cmwlth. 2013) (written independent-contractor agreement not dispositive)
- Clark v. Unemployment Compensation Board of Review, 129 A.3d 1272 (Pa. Cmwlth. 2015) (use of Form 1099 not conclusive of self-employment)
- C E Credits OnLine v. Unemployment Compensation Board of Review, 946 A.2d 1162 (Pa. Cmwlth. 2008) (factors to assess control)
- Wise v. Unemployment Compensation Board of Review, 111 A.3d 1256 (Pa. Cmwlth. 2015) (capricious disregard standard for agency adjudication)
- Ductmate Industries, Inc. v. Unemployment Compensation Board of Review, 949 A.2d 338 (Pa. Cmwlth. 2008) (appellate review: substantial-evidence standard)
- Famularo Catering, Inc. v. Dep’t of Labor & Indus., 125 A.3d 866 (Pa. Cmwlth. 2015) (presumption of employment reiterated)