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Osborne Associates, Inc. v. Unemployment Compensation Board of Review

August 13, 2010

OSBORNE ASSOCIATES, INC., D/B/A GENERATIONS SALON SERVICES, PETITIONERS
v.
UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



The opinion of the court was delivered by: Judge Cohn Jubelirer

Argued: May 17, 2010

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE JAMES R. KELLEY, Senior Judge.

OPINION

Osborne Associates, Inc., d/b/a Generations Salon Services (Generations), petitions for review of the order of the Unemployment Compensation Board of Review (Board), which affirmed on other grounds the Unemployment Compensation Referee's (Referee) decision and order concluding that Barbara P. Levicke (Claimant) was not disqualified from receiving benefits under Section 402(h) of the Unemployment Compensation Law (Law).*fn1 Before this Court, Generations argues that the Board erred by interpreting the Act commonly referred to as the Cosmetology Law*fn2 to prohibit all independent contractor relationships within the cosmetology field and by relying on such interpretation to conclude that Claimant is not disqualified from receiving benefits under Section 402(h). Generations contends that the Board should have instead applied the independent contractor test factors and determined that Claimant was engaged in self-employment when she provided cosmetology services on behalf of Generations. For the reasons that follow, we vacate and remand.

I. Facts and Procedural Posture

Claimant worked as a licensed cosmetologist for LA Hair. (Referee Hr'g Tr. at 6, 11, 13-15, February 19, 2009, R.R. at 32a, 37a, 39a-41a; Referee Hr'g Tr. at 30, July 20, 2009, R.R. at 157a.) Claimant applied for unemployment compensation benefits in November 2007, after LA Hair reduced her hours. (Referee Hr'g Tr. at 14-15, February 19, 2009, R.R. at 40a-41a.) While continuing to work part-time for LA Hair, Claimant also provided services on behalf of Generations on eight occasions between July 2008 and November 2008.*fn3 ,*fn4 (Referee Hr'g Tr. at 5-6, 15-16, February 19, 2009, R.R. at 31a-32a, 41a-42a.) Generations supplies senior living facilities with licensed cosmetologists who provide hair care services to the residents of those facilities. (Referee Hr'g Tr. at 10, July 20, 2009, R.R. at 137a.) On the occasions that Claimant provided services for Generations, Claimant filled in for other cosmetologists employed by Generations when they were sick or on vacation. (Referee Hr'g Tr. at 7, February 19, 2009, R.R. at 33a; Referee Hr'g Tr. at 10, July 20, 2009, R.R. at 137a.) Claimant reported earnings from both LA Hair and Generations to the unemployment compensation authorities for the compensable weeks ending: September 27, 2008; October 4, 2008; October 11, 2008; October 18, 2008; October 25, 2008; November 1, 2008; November 8, 2008; November 15, 2008; and November 22, 2008. (Claim Record at 1, R.R. at 1a.)

On December 18, 2008, the Unemployment Compensation Service Center (Service Center) issued a determination concluding that, because Claimant was an employee of Generations, and not a self-employed, independent contractor, she was not disqualified from receiving benefits under Section 402(h) of the Law for any of the compensable weeks listed above. Generations appealed the Service Center's determination, contending that Claimant was not an employee of Generations but, rather, provided services on its behalf as a self-employed, independent contractor.

An evidentiary hearing was held before the Referee at which only Claimant appeared and testified. During the hearing, the Claimant provided testimony in response to the Referee's questions, which were based on the factors of the independent contractor test. Following the hearing, the Referee issued a decision and order affirming the Service Center's determination. The Referee, after applying the factors of the independent contractor test, concluded that an employer/employee relationship existed between Claimant and Generations and, therefore, that Claimant was not disqualified from receiving benefits under Section 402(h).

Generations appealed the Referee's decision and order to the Board. The Board remanded the matter back to the Referee, who, acting as a hearing officer for the Board, conducted another hearing regarding Generations' nonappearance at the first hearing and the merits of Generations' appeal. Claimant and Generations' president, Marvin Weinstein, appeared and testified at the remand hearing.*fn5

During the remand hearing, Generations attempted to establish that Claimant was an independent contractor, and not an employee, based on the independent contractor test factors. Claimant, appearing pro se, asserted that she had contacted the State Board of Cosmetology (Cosmetology Board), which advised her that the Cosmetology Law prohibits cosmetologists from working as independent contractors. Following the remand hearing, the Board issued its decision and order in which it made the following findings of fact:

1. The claimant was last employed as a hairdresser by Generation[s] . . . from August 10, 2008, and her last day of work was November 13, 2008.

2. Generation[s] . . . provides hair care services for retirement facilities.

3. On September 23, [1]997, the claimant had entered into an independent contractor agreement with the employer to provide services at the Immaculate Mary Nursing Home.

4. The employer no longer does business with the Immaculate Mary Nursing Home.

5. The claimant was hired by the employer to provide hairdressing services for the employer when one of its ...


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