Appeal from the Order of the Department of Labor and Industry, Employer Accounts Review Board, in case of In Re: 1982 Contribution Rate Appeal of Appleton Papers, Inc. (formerly Germaine Monteil Cosmetiques Corporation), Employer Account No. 99-1981.
C. Grainger Bowman, McNees, Wallace & Nurick, for petitioner.
Sean F. Creegan, Assistant Chief Counsel, with him, Herbert W. Hoffman, Deputy Chief Counsel, for respondent.
Judges Craig and Doyle, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Doyle.
[ 90 Pa. Commw. Page 401]
Appleton Papers, Inc. (Petitioner) appeals from a determination of the Employer Accounts Review Board (Board) which affirmed the decision of the Office of Employment Security (OES) denying Petitioner's 1982 contribution rate appeal.
Prior to 1982, a former corporation having the name Appleton Papers, Inc. (Old Appleton) existed as a wholly owned subsidiary of Germaine Monteil Cosmetiques Corporation (GMCC). Both GMCC and Old Appleton were Pennsylvania employers, and had established separate employer contribution accounts with the OES. On January 2, 1982, the two corporations merged,*fn1 with GMCC being the surviving corporation. After the merger, GMCC changed its name to Appleton Papers, Inc. (New Appleton). It is New Appleton which is the present petitioner. New Appleton's contribution rate for the remainder of 1982 was determined pursuant to the provisions of Section 301(d)(2) of the Unemployment Compensation Law (Act),*fn2 43 P.S. § 781(d)(2), which states:
A . . . successor-in-interest who, prior to the transfer, was an employer during the calendar year in which the transfer occurred, shall not have his rate of contribution adjusted under the provisions of this subsection for the remainder of such year. A successor-in-interest, who prior to the transfer, was not an employer during the calendar year in which the transfer occurred . . . shall be assigned the same rate of contribution as the preceding employer for the remainder of such year. . . .
[ 90 Pa. Commw. Page 402]
Since New Appleton had been an "employer" prior to the transfer,*fn3 its contribution rate was not adjusted for the remainder of 1982, and thus did not reflect the lower contribution rate which had been assigned to its former subsidiary, Old Appleton.*fn4 New Appleton applied for a redetermination of its contribution rate, requesting that its former subsidiary's experience record and reserve account balance be considered. The OES denied the application, and the Board affirmed.
In its present appeal, New Appleton challenges the constitutionality of Section 301(d)(2) of the Act on equal protection grounds.*fn5 New Appleton attacks as arbitrary the classification which allows the contribution rate of a successor-in-interest to be determined on the basis of whether or not the successor-in-interest was an employer in Pennsylvania prior to the transfer.
We begin our analysis by noting that a strong presumption exists in favor of the constitutionality of an act of the legislature and the burden lies heavily upon one challenging the act to show that it clearly, palpably and plainly violated the Constitution. Picariello v. Commonwealth, 54 Pa. Commonwealth Ct. 252, 421 A.2d 477 ...