Lello v. Unemployment Compensation Board of Review
59 A.3d 1153
Pa. Commw. Ct.2013Background
- Claimant began receiving unemployment benefits based on prior termination from Wilkes Barre Publishing Company.
- From April 1, 2011, Claimant submitted assignments to Issue Media Group and, from May 1, 2011, performed copy editing for AOL as an independent contractor.
- Claimant notified the Scranton service center that he was not employed full-time and had freelance work; the Department began an investigation.
- August 15, 2011 Notices of Determination deemed Claimant self-employed under §402(h) and denied benefits, listing AOL and IMG as putative employers.
- Referee issued two decisions—October 4, 2011—holding Claimant self-employed; Board affirmed; Claimant appealed to the Commonwealth Court.
- Court reverses, concluding the evidence supports sideline activity that does not render Claimant ineligible under §402(h).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sideline self-employment defeats eligibility under §402(h). | Lello contends sideline work pre-termination continued post-separation. | Board held sideline activity constituted self-employment with change in form and pay. | Reversed; sideline activity not substantial change or disqualifying. |
| Whether the Board erred by requiring substantial change based on formal arrangements. | Lello argues formal contracts do not prove substantial change; hours remained the same. | Board relied on increased formality and remuneration to show change. | Reversed; no substantial change shown by hours or activities. |
| Whether the mere existence of independent contractor status controls outcome. | Independent contractor status does not automatically disqualify benefits. | Labor-law tests treat arrangement as self-employment. | Reversed; contract formality not dispositive. |
Key Cases Cited
- Kress v. Unemployment Compensation Board of Review, 28 A.3d 632 (Pa.Cmwlth. 2011) (sideline activity exception criteria for §402(h))
- Risse v. Unemployment Compensation Board of Review, 35 A.3d 79 (Pa.Cmwlth. 2012) (no substantial change despite earnings increase)
- LaChance v. Unemployment Compensation Board of Review, 987 A.2d 167 (Pa.Cmwlth. 2009) (solicitation of work can be non-disqualifying without income yet earned)
- Keslar v. Unemployment Compensation Board of Review, 195 A.2d 886 (Pa. Super. 1963) (precludes benefits when active solicitation occurs with sideline work)
- Quinn v. Unemployment Compensation Board of Review, 446 A.2d 714 (Pa.Cmwlth. 1982) (increased hours or activity can constitute substantial change)
- Higgins v. Unemployment Compensation Board of Review, 405 A.2d 1024 (Pa.Cmwlth. 1979) (increases in hours can show substantial change)