Subcontracting Concepts, Inc. v. UCBR
333 C.D. 2020
Pa. Commw. Ct.Dec 16, 2020Background
- Subcontracting Concepts, Inc. (SCI) contracted with Justin M. Langer under an Owner/Operator Agreement in July 2019; the agreement labeled Langer an independent contractor and required him to invoice SCI for payment.
- Langer delivered auto parts exclusively for SCI’s customer, NAPA, worked set hours (Mon–Fri, 8 a.m.–5 p.m.), and could theoretically accept or reject assignments.
- SCI did not withhold taxes; Langer received a 1099, applied for an EIN as a sole proprietor, paid his own vehicle and insurance costs, and obtained occupational accident insurance.
- NAPA stopped using Langer; he searched for other delivery work but most openings required a CDL.
- The UC Service Center denied benefits under 43 P.S. § 802(h) (self-employment); a Referee reversed, the UCBR affirmed the Referee (finding Langer not "customarily engaged" in an independent business), and SCI appealed to this Court.
Issues
| Issue | SCI (petitioner) Argument | UCBR / Claimant Argument | Held |
|---|---|---|---|
| Whether UCBR applied correct legal standard for § 4(l)(2)(B)(b) ("is customarily engaged") | UCBR focused improperly on whether Langer actually worked for others; correct test is whether he actively advertised or held himself out for business (capability/advertising) | Statute requires evidence of actual engagement in an independent business; lack of evidence Langer worked for others or advertised supports UCBR approach | Court held UCBR applied correct standard (considered all relevant factors per Danielle Viktor and Lowman; Special Touch requires actual engagement) |
| Whether UCBR’s finding that claimant was not customarily engaged in an independent business is supported by substantial evidence | SCI: EIN/W-9, 1099 treatment, payment of business expenses, insurance, and enrollment in CBDriver.com show independent business activity | UCBR: many of those items were contractually required by SCI or unutilized (Langer testified he did not use the advertising portal); real-time activities show he worked solely for NAPA with hours that prevented working for others | Court held substantial evidence supports UCBR’s factual findings; affirmed that Langer was eligible for UC benefits |
Key Cases Cited
- Danielle Viktor, Ltd. v. Dep’t of Labor & Indus., 892 A.2d 781 (Pa. 2006) (lists multiple relevant factors for independence and recognizes ownership/ tools of trade may establish independent business)
- A Special Touch v. Dep’t of Labor & Indus., 228 A.3d 489 (Pa. 2020) (interprets § 4(l)(2)(B)(b) to require actual engagement in an independent trade, not mere capability)
- Lowman v. Unemployment Comp. Bd. of Rev., 235 A.3d 278 (Pa. 2020) (clarifies Danielle Viktor: consider real-time activities and all relevant factors; focus on what claimant has done/ is doing rather than hypothetical capacity)