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Resource Staffing, Inc. v. Unemployment Compensation Board of Review

May 13, 2010

RESOURCE STAFFING, INC., PETITIONER
v.
UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



The opinion of the court was delivered by: Judge McCULLOUGH

Submitted: March 5, 2010

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge.

OPINION

Resource Staffing, Inc. (RSI) petitions for review of the August 28, 2009, decision and order of the Unemployment Compensation Board of Review (Board), which, on remand, held that Edward W. Bush (Claimant) is not ineligible for benefits pursuant to section 402(h) of the Unemployment Compensation Law (Law).*fn1 We reverse.

Claimant is an experienced Microsoft systems engineer and administrator. RSI, an information technology consulting agency, located Claimant's resume on Monster.com and offered him a six-month contract position. Claimant signed a Contractor Agreement (Reproduced Record (R.R.) at 55a-62a) on October 30, 2006, and he worked for Carpenter Technology (the client), at the client's facility, from November 13, 2006, through September 20, 2007. (Board's Finding of Fact, No. 1.)

Following the completion of the project, the local job center approved Claimant's application for benefits, concluding that Claimant was not self-employed pursuant to section 402(h) of the Law. (R.R. at 1a.) RSI appealed, and a referee conducted an evidentiary hearing at which Claimant and Ms. Hensinger, RSI's representative, testified. The referee affirmed the job center's determination, concluding that RSI failed to meet its burden to show that Claimant was free from RSI's direction or control in the performance of his work. RSI appealed to the Board, which affirmed the referee's decision, adopting and incorporating the referee's findings and conclusions. (R.R. at 78a.) RSI then petitioned this Court for review, and in Resource Staffing, Inc. v. Unemployment Compensation Board of Review, 961 A.2d 261 (Pa. Cmwlth. 2008), we vacated the Board's order and remanded to the Board with instructions to issue additional findings of fact.*fn2

On August 24, 2009, the Board issued a second decision and order, again affirming the referee's determination that Claimant is not ineligible for benefits pursuant to section 402(h) of the Law. In relevant part, the Board found that: (1) RSI required Claimant to work a set schedule; (2) Claimant was required to notify RSI before taking sick or vacation time; (3) RSI admitted that it directly supervised Claimant; (4) Claimant was required to attend meetings on site to discuss the progress of his work with the client and RSI; and (5) Claimant was required to submit timesheets to RSI.*fn3 (Board's Findings of Fact, Nos. 7, 9, 17, and 18; R.R. at 90a.) Based on these findings, the Board concluded that RSI exercised control over Claimant's work. The Board further found that: (1) Claimant performed his work for RSI alone; (2) Claimant did not have time to perform services for anyone else due to the nature of his work with RSI; and (3) Claimant was limited in his ability to seek additional work due to the Contractor Agreement. (Board's Findings of Fact, Nos. 6, 23, and 24; R.R. at 91a.) Based on these findings, the Board concluded that RSI failed to establish that Claimant worked independently.*fn4

On appeal from the Board's August 24, 2009, decision and order, RSI argues that the Board's findings of fact are not supported by substantial evidence and that the Board erred in holding that Claimant was an employee of RSI rather than an independent contractor.*fn5 We agree.

Pursuant to section 402(h) of the Law, an employee is ineligible for benefits for any week in which he is engaged in "self-employment." The Law does not define the term "self-employment"; however, section 4(l)(2)(B) of the Law defines "employment" as follows:

Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the department that--(a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact; and (b) as to such services such individual is customarily engaged in an independently established trade, occupation, profession or business.

43 P.S. § 753(l)(2)(B). Section 4(l)(2)(B) of the Law creates a presumption that an individual working for wages is an employee. Beacon Flag Car Company, Inc. v. Unemployment Compensation Board of Review, 910 A.2d 103 (Pa. Cmwlth. 2006). A putative employer has the burden to overcome this presumption by demonstrating that: (1) the individual was free from control or direction in the performance of his work;*fn6 and (2) the individual was customarily engaged in an independently established trade, occupation, profession or business while providing such services. Id.

We agree with RSI that the record does not support the Board's pertinent findings of fact; to the contrary, the record reflects that RSI did not control or have the authority to control Claimant's work or manner of work. Claimant himself testified that RSI did not provide him with his daily assignments. Instead, Claimant testified that he was given work each day by a manager employed by the client and that he was supervised by numerous individuals who worked for the client.*fn7 (R.R. at 17a, 25a.) This testimony is consistent with the terms of the Contractor Agreement, which state that Claimant shall have the discretion to control the means and manner of his work and that the evaluation of his performance shall be made by the client.*fn8

Nonetheless, the Board determined that RSI exercised control over Claimant, reasoning as follows:

The claimant was required to work a set schedule at a specific location and for forty hours a week. The claimant was required to notify RSI of any sick time and any time taken for vacation. RSI admitted that it directly supervised the claimant's work, both in person and by phone contact and that the claimant was required to attend meetings on site to discuss the progress of his work with the client and RSI. The claimant was ...


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