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THEODORE J. SALAMAK v. COMMONWEALTH PENNSYLVANIA (09/05/85)

decided: September 5, 1985.

THEODORE J. SALAMAK, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Case of Theodore J. Salamak, No. B-226880.

COUNSEL

Claude A. Lord Shields, for petitioner.

Charles D. Donahue, Associate Counsel, with him, Charles G. Hasson, Acting Deputy Chief Counsel, for respondent.

Judges Craig and Palladino, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Senior Judge Barbieri.

Author: Barbieri

[ 91 Pa. Commw. Page 495]

Theodore J. Salamak appeals here an order of the Unemployment Compensation Board of Review (Board) which concluded that he was disqualified from receiving benefits under Section 402(h) of the Pennsylvania Unemployment Compensation Law (Law)*fn1 and had received a fault overpayment in the amount of $3,732 which is subject to recoupment under Section 804(a) of the Law.*fn2 We affirm.

Salamak had originally been granted benefits by the Office of Employment Security (OES) pursuant to a claim which he had filed on September 12, 1982. He received benefits for the compensable weeks from February 5, 1983 through April 16, 1983 and again from July 9, 1983 through August 29, 1983. On October 28, 1982, he became a one-third shareholder in a new corporation known as Fitness Associates, Inc., and served as corporate President and was a member of the Board of Directors. On April 1, 1983, Fitness Associates commenced business under the name of New Dimensions Health Club and Recreation Center. For three weeks subsequent to that time, Salamak was paid a salary of $250 per week for his work at New Dimensions. While he was not the manager of New Dimensions, he possessed the authority to hire and fire employees, sign corporate checks, and became actively involved in the management of the business when any problem arose which could not be handled

[ 91 Pa. Commw. Page 496]

    by the manager. On July 1, 1983, he terminated his association with New Dimensions as he felt that he was not being paid enough to justify making the daily trip from his home in Frackville to New Dimensions which was located in Souderton, some eighty-five miles away. After leaving New Dimensions, Salamak reopened his claim effective July 3, 1983 and received benefits for the compensable weeks from July 9, 1983 through August 27, 1983.

On November 10, 1983, the OES issued a determination which found Salamak ineligible for benefits as a self-employed businessman under Section 402(h) of the Law. On November 14, 1983, the OES issued a second determination which found that he had received a fault overpayment in the amount of $3,732 subject to recoupment under Section 804(a) of the Law. Salamak appealed both OES determinations and a referee's hearing was held on November 30, 1983. On December 6, 1983, the referee issued his decision in which he found that Salamak was ineligible for benefits for the compensable weeks from February 5, 1983 through April 16, 1983 and from July 9, 1983 through August 27, 1983 and affirmed the OES determination with regard to the $3,732 fault overpayment. Salamak then appealed the referee's decision to the Board which affirmed the referee on February 3, 1984. Appeal to this Court followed.

In this appeal, Salamak contends that the Board erred in finding that he was engaged in self-employment within the meaning of Section 402(h) of the Law. We initially note that Section 402(h) of the Law provides that "[A]n employee shall be ineligible for compensation for any week -- (h) In which he is engaged in self-employment. . . ." In Starinieri v. Unemployment Compensation Board of Review, 447 Pa. 256, 289 A.2d 726 (1972), our Supreme Court held that this

[ 91 Pa. Commw. Page 497]

    statutory language renders a self-employed person who becomes an "unemployed businessman" ineligible for unemployment compensation. In Starinieri, the claimant was the owner of fifteen out of forty outstanding shares in a closely-held corporation and became unemployed when the corporation filed a voluntary petition in bankruptcy.*fn3 While claimant was not the President of the failed company, he was the Secretary-Treasurer and acted as the executive manager. The Supreme Court concluded that the claimant's activities indicated that he exercised a "substantial degree of control" over the enterprise and was a self-employed businessman rather than an employee. Citing the Dawkins Unemployment Compensation Case, 358 Pa. 224, 56 ...


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