decided: May 19, 1986.
DRS. WILLIAM & JAMES KATSUR & ASSOCIATES, PETITIONERS
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT
Appeal from the Order of the Unemployment Compensation Board of Review, in case of Michael Gigliotti, DDS, No. B-230553.
Edward J. Van Allen, Kirkpatrick & Lockhart, for petitioners.
Jonathan Zorach, with him, Charles G. Hasson, Acting Deputy Chief Counsel, for respondent.
President Judge Crumlish, Jr., Judge Colins, and Senior Judge Kalish, sitting as a panel of three. Opinion by President Judge Crumlish, Jr.
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Drs. Katsur & Associates (Katsur) appeals an Unemployment Compensation Board of Review order upholding a referee's decision granting benefits to Michael
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C. Gigliotti. The referee concluded that Gigliotti's actions did not constitute willful misconduct under Section 402(e) of the Unemployment Compensation Law.*fn1 We vacate and remand.
Gigliotti, a dentist, was discharged for sexually harassing female assistants. The referee concluded that Gigliotti's conduct did not amount to sexual harassment, and that Katsur therefore had not met its burden of proving willful misconduct. The referee also concluded that the assistants' testimony was hearsay and not competent to support a finding.*fn2
Where the employer, who has the burden of proving willful misconduct, does not prevail below, our scope of review is limited to determining whether the Board's findings are consistent with each other and with the conclusions of law and whether they can be sustained without a capricious disregard of competent evidence. Defense Activities Federal Credit Union v. Unemployment Compensation Board of Review, 83 Pa. Commonwealth Ct. 476, 478 A.2d 493 (1984).
Katsur contends that the referee erred by disregarding the testimony of the four assistants. We agree.
The assistants testified by reading from their handwritten personal statements made approximately
[ 97 Pa. Commw. Page 335]
five months prior to the referee's hearing.*fn3 No direct interrogation of the assistants transpired. Our review of the record reveals that neither the employer nor the claimant was accompanied by legal counsel at the hearing, indicating that the referee was thus charged with a heightened responsibility of supervising the presentation of evidence.*fn4 Prior to the assistants' testimony on Katsur's behalf, the referee stated, "[e]ach person is going to have to testify to their own personal knowledge."*fn5 When a representative for Katsur asked whether the assistants could read from their statements, the referee replied, "O.K." after being informed that each assistant had previously prepared her statement.*fn6 Gigliotti did not object to the assistants' testifying in this manner.
Although the assistants' testimony is technically hearsay because it recited out-of-court statements, several factors lead us to conclude that it was competent
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evidence. The statements were prepared by the assistants and recounted their firsthand knowledge of past events. This testimony, albeit unorthodox in presentation, was subject to attack through cross-examination. It, therefore, carried indicia of reliability not present with traditional hearsay, where the declarant is not present in court to be cross-examined.*fn7 Moreover, this mode of presentation received the referee's explicit endorsement, upon which Katsur and the witnesses relied. A referee's hearing is not subject to technical rules of evidence. Section 505 of the Administrative Agency Law.*fn8 This testimony was relevant to the willful misconduct issue and highly probative. The referee was thus permitted to receive it under Section 505. Murphy v. Department of Public Welfare, 85 Pa. Commonwealth Ct. 23, 480 A.2d 382 (1984).
Because the assistants' testimony (1) related personal knowledge and was subject to challenge, (2) was presented in a hearsay nature at the express authorization of the referee, (3) was unobjected to and (4) was relevant and probative, the referee erred as a matter of law in disregarding this testimony. Accordingly, we must remand for new findings of fact and conclusions of law.*fn9
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The order of the Unemployment Compensation Board of Review, No. B-230553 dated May 14, 1984, is vacated and this case is remanded for further proceedings not inconsistent with the foregoing opinion.
Vacated and remanded.