Appeal from the Order of the Unemployment Compensation Board of Review in the case of In Re: Claim of Teresa Geever, No. B-183685.
Samuel Oppenheim, Brennan, Robins & Daley, for petitioner.
Francine Ostrovsky, Associate Counsel, with her Steven J. Neary, Associate Counsel, and Richard L. Cole, Jr., Chief Counsel, for respondent.
Judges Rogers, MacPhail and Doyle, sitting as a panel of three. Opinion by Judge MacPhail.
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Teresa Geever (Claimant) was found ineligible for unemployment compensation benefits by the Office of Employment Security, the referee and the Unemployment Compensation Board of Review (Board). The referee found Claimant ineligible under Section 402(h)*fn1 of the Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(h). The Board found that Section 402(h) was not applicable*fn2 because Claimant's activities as a self-employed businesswoman "ceased prior to the period at issue" (emphasis added), but held that " when the claimant's services were terminated, she became an unemployed businesswoman outside the protection of the Unemployment Compensation Law. Starinieri Unemployment
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Compensation Case, 447 Pa. 256 (1972)." (Emphasis added.) These conclusions of the Board point up the only issue presented in this case which is whether the Claimant at the time her employment was terminated exercised substantial control over the operation of the corporation such that she is an "unemployed businesswoman" and, therefore, ineligible for benefits. Starinieri Unemployment Compensation Case, 447 Pa. 256, 289 A.2d 726 (1972).
The basic facts were elicited from the Claimant who was the only witness to testify. Zephyr Compliments, Inc. incorporated in 1974, began to operate in 1976 as its sole venture, a restaurant using the trade name of "Cornucopia". In April of 1976, Claimant and her husband purchased 30% of the outstanding shares of stock in the corporation. The other shareholders were Ronald Yoder and Michael Deegan, each of whom owned 35% of the stock. Deegan was president and Yoder was secretary-treasurer. Claimant was named vice-president and placed on the board of directors.*fn3 In August of 1977, Deegan "left the business" whereupon Claimant succeeded him as president.
In Deegan's absence, Claimant did whatever was necessary to operate the restaurant business. She participated in the hiring and firing; she had authority to sign checks; she managed the day to day affairs; and, she was the bookkeeper. From April, 1979 until she was terminated, she received $300 per week from the corporation, none of which was for her services as a director or officer of the corporation. Yoder also participated actively in the business between August, 1977 and September of 1979 but there
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can be no doubt that during that period of time Claimant did exercise substantial control over the operation of the restaurant.
In September of 1979, Deegan returned to the business as president. From then until she was terminated on November 18, 1979 Claimant was "called" manager but was not consulted about the affairs of the restaurant. Purchases of equipment were made with which she did not agree but she was out voted. Her last two months were spent primarily as a bookkeeper. Although the referee and the Board both found that ...