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EDWARD C. LEE v. COMMONWEALTH PENNSYLVANIA (03/13/81)

decided: March 13, 1981.

EDWARD C. LEE, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



Appeal from the Order of the Unemployment Compensation Board of Review in the case of In Re: Claim of Edward C. Lee, No. B-178442.

COUNSEL

Michael P. Shay, Sigmon & Ross, P.C., for petitioner.

Steven Marcuse, Assistant Attorney General, with him Richard Wagner, Chief Counsel, for respondent.

Judges Mencer, Blatt and Craig, sitting as a panel of three. Opinion by Judge Blatt.

Author: Blatt

[ 57 Pa. Commw. Page 482]

Edward C. Lee (claimant) appeals here from an order of the Unemployment Compensation Board of Review (Board) which denied him benefits pursuant to Section 402(e) of the Pennsylvania Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. ยง 802(e).*fn1

The claimant, who was nearing his 65th birthday, planned to retire on July 29, 1979 from his job as general manager of Daniels Cadillac (Daniels), a business located in Allentown, Pennsylvania, where he had been employed for twelve years. In March of 1979, however, Albert Eidam of Eidam Cadillac (Eidam), whose business was located in Kingston, Pennsylvania, and who knew of the claimant's plan, sought to hire him as a part-time assistant sales manager. The claimant accepted this offer of employment and, in response to Eidam's indication that his help was needed immediately, left his better-paying job with Daniels on May 3, 1979, two months earlier than planned, and joined Eidam two days later. Because the Daniels pension plan had been cancelled in 1977, from which the claimant received a cash settlement of $21,159 in consideration of the cancellation, Daniels had promised him "something extra" in lieu of pension benefits and, on June 1, 1979 (which was almost a month after his employment with Eidam had started), Daniels and the claimant agreed as follows:

[ 57 Pa. Commw. Page 483]

In appreciation for past loyalty, Daniels Cadillac, Inc., has agreed to retain the services of Mr. Lee in his retirement years as a part-time consultant. The only restriction is that Mr. Lee not engage in the buying or selling of automobiles within a fifty mile radius and to continue to uphold the good name of Daniels Cadillac, Inc., which he has labored for so hard in the past.

In consideration of the above, Daniels Cadillac, Inc., will pay Mr. Lee the sum of $174.00 per month for sixty (60) months.

On his next working day following the making of this agreement, the claimant has testified that he informed Eidam's general sales manager about the agreement and that he was told there was "no problem." He has further testified, however, that he was informed by Eidam's sales manager in mid-August of 1979 that he, among others, was going to have to be let go because "we just got to cut expenses." He also testified that, in the ensuing discussion, Albert Eidam told him that he was being let go because of a "conflict of interest." Subsequent to this meeting, he said, the secretary of Eidam informed him that a "conflict of interest" resulted from his having signed the agreement with Daniels. The record indicates that the others whose services were terminated when the claimant was discharged were let go in an effort to cut back on expenses, and the claimant argues that this was the real reason for his own dismissal. He testified that he actually had no consulting duties to perform with Daniels and that the agreement had been labeled as a consultant agreement by Daniels merely because "they couldn't legally list it as an addition to retirement." He argues, therefore, that there could not have been any conflict of interest.

[ 57 Pa. Commw. Page 484]

The Office of Employment Security denied benefits but was reversed by the referee. He, in turn, was reversed by the Board which held that the claimant had been discharged ...


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