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decided: February 1, 1988.


Appeal from the Order of the Unemployment Compensation Board of Review in the case of Anita M. Merlino, No. B-256413.


Martin M. Scoratow, for petitioner.

No appearance for respondent.

Margaret J. Bozik, with her, Donald T. O'Connor, Buchanan Ingersoll Professional Corporation, for intervenor, Nordic Fisheries, Inc.

Judges MacPhail and Barry, and Senior Judge Narick, sitting as a panel of three. Opinion by Judge MacPhail.

Author: Macphail

[ 113 Pa. Commw. Page 210]

Anita M. Merlino (Claimant) appeals an order of the Unemployment Compensation Board of Review (Board) which affirmed a referee's denial of unemployment compensation benefits under Section 402(e) of the Unemployment Compensation Law,*fn1 43 P.S. ยง 802(e) (willful misconduct). We reverse the Board's order.

Claimant was employed by Nordic Fisheries, Inc. (Employer) in both its wholesale operation and retail fish business. On July 16, 1986, Claimant and her husband, who was the manager of Employer's fresh fish department, informed Employer that they were going to open their own retail fish store three miles from Employer's store, in the Squirrel Hill section of Pittsburgh. As found by the Board, Employer draws a substantial portion of its business from Squirrel Hill. Board's Finding of Fact No. 8. Upon discovering that Claimant and her husband intended to remain in Employer's employ, Employer advised them that their new store would be a conflict of interest and that the Merlinos could not continue as employees while in competition with Employer.

[ 113 Pa. Commw. Page 211]

Employer subsequently discharged both Claimant and her husband when they refused to resign.

Claimant was denied benefits by both the Office of Employment Security and the referee, based on willful misconduct. The Board, after making findings of fact consistent with those of the referee, concluded that Claimant's actions in operating a competing fish store with her husband constituted a conflict of interest sufficient to support a finding of willful misconduct. Claimant's appeal of this order is now before our Court.

Our scope of review is, of course, limited to a determination of whether constitutional rights have been violated, an error of law committed, or whether necessary findings of fact are not supported by substantial evidence. Estate of McGovern v. State Employees' Retirement Board, 512 Pa. 377, 517 A.2d 523 (1986). The question of whether or not a claimant's conduct constitutes willful misconduct is a question of law, subject to our review. Richner v. Unemployment Compensation Board of Review, 95 Pa. Commonwealth Ct. 572, 505 A.2d 1375 (1986). Claimant argues here that the Board's findings are not supported by substantial evidence and that the Board erred as a matter of law in concluding that Claimant committed willful misconduct.

"Willful misconduct," which renders a claimant ineligible for benefits under Section 402(e), has been defined by this Court to include the wanton and willful disregard of the employer's interest, the deliberate violation of rules, the disregard of standards of behavior an employer can rightfully expect, or negligence manifesting culpability, wrongful intent, evil design, or intentional and substantial disregard of the employer's interests or the employee's duties and obligations. Kentucky Fried Chicken of Altoona, Inc. v. Unemployment Compensation Board of Review, 10 Pa. Commonwealth Ct. 90, 309 A.2d 165 (1973). Such conduct must be

[ 113 Pa. Commw. Page 212]

    with Employer. At the time of Claimant's discharge, the only action she, individually, had taken on behalf of her husband's business was to use a personal day off from Employer to assist in the store's opening day and to sign a health department inspection report. See Board's Findings of Fact Nos. 12 and 14. This conduct does not manifest a willful disregard of Employer's interests or any degree of misconduct sufficient to sustain Employer's burden of proving Claimant's willful misconduct.

We, accordingly, reverse the Board's order denying benefits to Claimant for willful misconduct.*fn2


The order of the Unemployment Compensation Board of Review in the above-captioned proceeding is hereby reversed.



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