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Thomas Edison State College v. Unemployment Compensation Board of Review

August 26, 2009


The opinion of the court was delivered by: Senior Judge McCLOSKEY

Submitted: July 24, 2009



Thomas Edison State College (Employer) petitions for review of an order of the Unemployment Compensation Board of Review (Board) affirming the order of the referee granting benefits to Michelle Vanderhoof (Claimant). We now reverse.

Claimant applied for unemployment compensation benefits on January 10, 2008.*fn1 On June 9, 2008, the Altoona Unemployment Compensation Service Center (Service Center) mailed a notice of financial determination to Claimant indicating that she was financially eligible for unemployment compensation benefits in the amount of $462.00 per week. The Service Center's determination did not include any earnings from Employer in its calculation of benefits. Subsequently, on June 24, 2008, Claimant filed an appeal claiming that the determination was missing the earnings that she had received from Employer and that consideration of those earnings was necessary in order to complete her base year earnings report. A hearing before the referee was scheduled and held on July 29, 2008.

At the hearing before the referee, Claimant testified on her own behalf. Christopher Stringer, Employer's Controller, and Heather Brooks, Employer's Associate Director for Human Resources, testified on behalf of Employer. Claimant testified that she began working for Employer in 2006 as an online mentor and mentored students in English composition that were assigned to her by Employer. Claimant testified that, pursuant to contract, she was paid by Employer on a per student basis and that at the end of each semester she could receive a bonus payment for each student if she submitted the student's grade by a certain deadline.

Mr. Stringer testified that Employer contracted with Claimant on a yearly basis which gave Employer the ability to use her services as a mentor, but that there was no guarantee that Claimant would be assigned any students. Mr. Stringer testified that Claimant's service was not like that of a "professor" teaching the class, but that she was instead considered to be one of many "off-site facilitators of the class." (N.T. at 10, July 29, 2008, R.R. at 23a). Mr. Stringer testified that Claimant initially received a per student rate depending on the number of students who registered for the course and that Claimant would receive an additional per student payment at the end of the course for each student who completed the course. Mr. Stringer testified that Claimant could also receive a smaller amount of remuneration, per student, if she submitted each student's final grade in a timely fashion.

Ms. Brooks testified that Claimant signed a contract with Employer that indicated that she was an independent contractor. Ms. Brooks testified that mentors were "handled differently than employees in that they [did] not come through the office of human resources." (N.T. at 14, July 29, 2008, R.R. at 27a).

By decision with a mailing date of August 4, 2008, the referee determined that the wages that Employer had paid to Claimant were to be included in the calculation of her unemployment compensation benefit as he concluded that the services that Claimant provided for Employer constituted "employment" pursuant to Section 402(e) of the Pennsylvania Unemployment Compensation Law (the Law).*fn2 The referee noted that although Claimant had signed a contract designating her services as those of an independent contractor, such language was not dispositive of the matter and that because Employer exerted control over Claimant's services the actual relationship was that of an employer/employee. The referee noted that Claimant was free to provide her services to other educational institutions and did in fact do so. Further, the referee concluded that Claimant's position was similar to that of an adjunct professor although she was not responsible for instructing or teaching the students. Thus, the referee modified the financial determination to include the wages that Employer paid Claimant, and increased Claimant's weekly unemployment compensation benefit amount to $520.00.

By letter dated August 15, 2008, Employer appealed the referee's decision to the Board. Employer alleged that the referee erred in including its wages paid to Claimant because she was an independent contractor and her services were not similar to that of an adjunct professor. Employer asserted that Claimant was not an employee as she had never completed an employment application, had not been contacted through a recruitment process, was not eligible for fringe benefits and Employer had never made any payroll deductions from Claimant's check. Employer alleged that any "control" it exerted over Claimant was minimal in contrast to all of the "independent" activities performed by Claimant over which she had complete control. (R.R. at 101a). Additionally, Employer noted that Claimant was able to offer her services to other members of the public, was not required to teach or lecture any students, was not trained or supervised by Employer, did not report to work on Employer's premises, did not have any set work hours and was not required to provide written reports to Employer other than the optional submission of final grades.

By order dated September 16, 2008, the Board remanded the matter to the referee for the purpose of establishing additional testimony and evidence. By notice of hearing with a mailing date of September 23, 2008, the referee scheduled a hearing for October 7, 2008. The notice indicated that the specific issues to be considered were whether Claimant had performed services in an instructional, research, or principal administrative capacity and had a reasonable assurance of returning at the beginning of the next academic term; whether Claimant was unemployed as defined by the Law; whether Claimant's services had been performed in covered employment and whether Claimant's wages were in excess of six times her weekly benefit rate.

At the remand hearing before the referee, Claimant testified on her own behalf. Mr. Stringer and Ms. Brooks testified on Employer's behalf. Claimant testified that she was an experienced secondary instructor in the classroom, had a master's degree in English and was an experienced online instructor. Claimant testified that she had received a handbook of "mentorship standards" from Employer which indicated that she was required to grade papers within a one week period and monitor student discussions several times a week. (N.T., October 7, 2008, at 5, R.R. at 122a). Claimant testified that Employer provided her with a textbook for each class. Claimant testified that she did not have to report to Employer as to how often she answered student questions or how many times she monitored student discussions but that she did have to timely submit the student grades to Employer at the end of each semester.

As to specifics about Employer, Mr. Stringer testified that Employer was an accredited educational institution but that it did not have "traditional" students on campus as all of its offered classes were either "guided study" or "online." (N.T., October 7, 2008, at 8, R.R. at 124a). Mr. Stringer stated that Employer offered twelve semesters per year which started "roughly on the first day of each month" and lasted approximately twelve or sixteen weeks. Id. Mr. Stringer indicated that Employer was "open" 365 days a year. Id.

With regard to Employer's relationship with Claimant, Mr. Stringer testified that it provided Claimant with access to "Blackboard," an internet web portal, in order for her to monitor student discussions. (N.T., October 7, 2008, at 4, R.R. at 121a). Mr. Stringer testified that Employer did not provide Claimant with a textbook but merely passed it along to her from the publisher. Mr. Stringer testified that Employer did not supply Claimant with a computer or other tools and did not require mentors to have teaching experience. Mr. Stringer indicated that Employer did not monitor the mentor discussions with students or supervise such activities on a day-today basis and merely waited for the mentor to provide each student's final grade at the end of each class. Mr. Stringer testified that Claimant was never guaranteed to be selected as a mentor for any future semesters and was never ...

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