Kress v. Unemployment Compensation Board of Review
23 A.3d 632
| Pa. Commw. Ct. | 2011Background
- Kress, a former associate at Scaringi & Scaringi, was laid off March 19, 2010 due to lack of work.
- Before and after employment, he continued CJA-indigent defense work, with payments initially to him but routed through the firm.
- He and the firm agreed he turned over $125/hour CJA payments to the firm; after termination he retained the cases themselves.
- He maintained a home office, used personal contact info, obtained malpractice insurance, and created business cards/letterhead for the CJA work.
- The Department initially found him eligible under 402(h); the Board reversed, holding sideline activity ceased on termination and citing substantial changes; the court reversed the Board, concluding 402(h) criteria were met.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether self-employment began prior to termination | Kress began CJA work before and continued after employment. | Board treated sideline as employee activity, not self-employment after termination. | Kress met the first prong; self-employment began prior to termination. |
| Whether self-employment continued without substantial change after termination | Work volumes and nature remained largely unchanged post-termination. | Post-termination changes (office setup, cards, box, insurance) show substantial change. | Kress met the second prong; no substantial change. |
| Whether he remained available for full-time employment | Kress remained available and sought full-time law firm work. | Evidence suggested inconsistent pursuit and autonomy in CJA work. | Kress met the third prong; remained available for full-time work. |
| Whether self-employment was not the primary source of livelihood | Self-employment net income ($10,106 in 2009) was not primary; firm income was primary. | Notwithstanding, earnings from sideline could constitute significant income. | Kress met the fourth prong; sideline income not primary. |
| Whether sideline exception applies given CJA payments routed to employer | Checks were issued to Kress; employer compensation was a mutual arrangement; Kress retained clients post-termination. | Difficult to separate from continued employment; Board considered changes. | Court adopted plaintiff’s interpretation; sideline exception satisfied. |
Key Cases Cited
- O'Hara v. Unemployment Compensation Board of Review, 648 A.2d 1311 (Pa.Cmwlth. 1994) (establishes four-prong test for 402(h) sideline self-employment)
- Dausch v. Unemployment Compensation Board of Review, 725 A.2d 230 (Pa.Cmwlth. 1999) (substantial changes analysis in sideline business; notes routine prep not sufficient)
- Quinn v. Unemployment Compensation Board of Review, 446 A.2d 714 (Pa.Cmwlth. 1982) (hours-worked test for substantial change in sideline activity)
- Frazier v. Unemployment Compensation Board of Review, 833 A.2d 1181 (Pa.Cmwlth. 2003) (scope of review—error of law and substantial evidence standard)