Appeals from the Orders of the Unemployment Compensation Board of Review in the cases of In Re: Claim of Thomas J. Evans, No. B-221657; Claim of Gilbert J. Falvo, No. B-221659; Claim of Ralph Mazzocchi, No. B-221656; and Claim of Manuel G. Ganopules, No. B-221660.
James W. Carroll, Jr., with him, H. Yale Gutnick, for petitioners.
Charles Hasson, Acting Deputy Chief Counsel, for respondent.
Charles D. Shields, Jr., with him, Alan C. Kohler, for respondent/intervenor, Department of Auditor General.
Judges Craig, Doyle and Colins, sitting as a panel of three. Opinion by Judge Craig.
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In these consolidated cases, Thomas J. Evans, Gilbert J. Falvo, Ralph Mazzocchi and Manuel G. Ganopules, former employees of the Pennsylvania Department of Auditor General, appeal decisions of the Unemployment Compensation Board of Review, which affirmed a referee's denial of benefits to each claimant pursuant to section 3 of the Unemployment Compensation Law*fn1 -- that persons unemployed through fault of their own are ineligible for benefits. We must determine (1) whether the claimants' conduct amounted to fault under section 3, (2) whether the claimants' actions were too remote from their discharge to support a finding of fault, (3) whether the record contains substantial competent evidence to support the referee's findings, and (4) whether there was a waiver by the employer, effective as to section 3.
The Department of Auditor General terminated the claimants*fn2 after a grand jury presentment had named
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them as persons who had paid money to obtain employment.*fn3 After a hearing, the Office of Employment Security determined that the claimants were ineligible for benefits. The referee, after de novo hearings, concluded that, although the department had waived the right to advance willful misconduct as a ground for denial of benefits, each claimant was ineligible under section 3 because they could not, according to the referee, "be considered as being unemployed through no fault of [their] own." On appeal the board adopted the referee's findings and conclusions in each case.
1. Fault Under Section Three
Section 3, which announces the public policy to which the Unemployment Compensation Law is addressed, provides in relevant part:
The Legislature, therefore, declares that in its considered judgment the public good and the general welfare . . . require . . . the compulsory setting aside of employment reserves to be used for the benefit of persons unemployed through no fault of their own.
An extensive line of cases in this court, some affirmed by the Pennsylvania Supreme Court, has established that section 3 is a substantive provision of the Unemployment Compensation Law and that, as such, it provides an independent basis for the denial of benefits when an employee is unemployed through some "fault" of his own.*fn4
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In section 3 cases the employer bears the burden of establishing conduct on the part of the employee which, as a matter of law, constitutes fault within the meaning of the section. D'Iorio v. Unemployment Compensation Board of Review, 42 Pa. Commonwealth Ct. 443, 400 A.2d 1347 (1979); the employer must produce evidence demonstrating fault "which would be incompatible with his work responsibilities." Unemployment Compensation Board of Review v. Derk, 24 Pa. Commonwealth Ct. 54, 353 A.2d 915 (1976). As in all unemployment appeals where the burdened party prevails below, our review is limited to questions of law and whether substantial evidence supports the findings of fact. Dickey v. Unemployment Compensation Board of Review, 78 Pa. Commonwealth Ct. 58, 466 A.2d 1106 (1983).
Before the referee, the department established, through the claimants' own admissions,*fn5 that they had indeed made payments in conjunction with their job applications. The department showed that each claimant had failed to list that payment on his employment application, which required the applicant to declare under oath that he had made "no misrepresentations
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or falsifications, omissions, or concealment of material fact." Through the introduction of the grand jury presentment, the department demonstrated that each of the claimants had been named in the presentment.
Based on that evidence, the referee found in each case that the claimant had delivered money to another person in conjunction with his employment application. By a finding which appears in the discussion section of the referee's decision,*fn6 he also found that each claimant was, or should have been, aware of the impropriety of such a payment.
The referee therefore determined, albeit implicitly, that the claimants' use of improper methods to obtain their jobs was incompatible with the responsibilities of their positions and concluded that each claimant had "placed himself in the present chain of circumstances" and therefore was not unemployed "through no fault of his own."
The referee did not find persuasive the claimants' contention that they were innocent victims of a corrupt political system. Obviously, any corrupt pattern depends upon participants who are willing, not only to engage in improper behavior, but to remain silent about the situation.
Similarly, the referee rejected the claimants' allegations that they believed that they had made legitimate political contributions. The claimants' employment histories, together with their failure to disclose the payments on their employment applications -- an
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omission of material fact -- clearly support the ...