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WEDNER UNEMPLOYMENT COMPENSATION CASE (11/17/72)

decided: November 17, 1972.

WEDNER UNEMPLOYMENT COMPENSATION CASE


Appeal from order of Superior Court, April T., 1970, No. 227, affirming decision of Unemployment Compensation Board of Review, No. B-105588, in re claim of Flora L. Wedner.

COUNSEL

Irwin B. Wedner, with him Mark J. Goldberg, and Goldberg & Wedner, for appellant.

Sydney Reuben, Assistant Attorney General, with him J. Shane Creamer, Attorney General, for appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Roberts. Dissenting Opinion by Mr. Justice Pomeroy.

Author: Roberts

[ 449 Pa. Page 462]

Appellant, Flora L. Wedner, was denied benefits under the Unemployment Compensation Law. Upon final administrative appeal to the Unemployment Compensation Board of Review, the denial of benefits by the referee was affirmed. The decision of the Board was based on Section (4)(1)(4)(5) of the Law,*fn1 which reads in pertinent part:

"(4) the Word 'employment' shall not include --

"(5) Service performed by an individual in the employ of his son, daughter, or spouse. . . ."

The Superior Court, on December 30, 1970, affirmed in an opinionless per curiam order. We granted allocatur.

[ 449 Pa. Page 463]

The facts are not in dispute: Appellant was employed for approximately five years as a bookkeeper and clerical assistant for the Joseph Wedner and Son Co. On June 27, 1969, this corporation was involuntarily placed into receivership. Thereafter, appellant, as well as other employees of Joseph Wedner and Son, was transferred to the employ of the Golden Triangle Storage Co., Inc. (Golden Triangle), an affiliated corporation. In August of 1969, this company also suffered a financial setback and was forced to cease operation. Appellant, in the latter part of August, filed the instant claim for unemployment benefits.

It is uncontested that appellant was a bona fide "employee" of both corporations, performing only those functions expected of an office worker; appellant had no authority to hire or fire, to sell or purchase business commodities, or to perform any other duties associated with the running of the business. The record further discloses that appellant played no part in the decisions which led to the insolvency of either corporation. In addition to receiving a salary for services rendered, Mrs. Wedner, serving as a corporate secretary, also was awarded, in 1968, two percent of the stock in both corporations as remuneration for keeping the corporate minute books. Ninety-six percent of the outstanding shares were owned by appellant's husband, who served as President of both corporations. The remaining two percent of the stock was held by appellant's brother-in-law. Thus, both businesses were family owned corporations.

Appellant's sole contention is that the Board of Review erred in piercing the corporate veil, thereby denying her compensation under Section (4)(1)(4)(5) of the Unemployment Compensation Law, by finding that her ...


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