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Leace v. Unemployment Comp. Bd. of Review

Commonwealth Court of Pennsylvania

June 6, 2014

Barry M. Leace, Petitioner
v.
Unemployment Compensation Board of Review, Respondent

Submitted April 17, 2014.

Appealed from No. B-556583. State Agency: Unemployment Compensation Board of Review.

Kenneth S. Saffren, Jenkintown, for petitioner.

Erin B. Lokhandwala, Assistant Counsel, Harrisburg, for respondent.

BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge. OPINION BY JUDGE McCULLOUGH.

OPINION

Page 1273

PATRICIA A. McCULLOUGH, Judge

Barry M. Leace (Claimant) petitions for review of the October 8, 2013 order of the Unemployment Compensation Board of Review (Board) affirming the decision of a referee and holding that Claimant is ineligible for benefits under section 402(h) of

Page 1274

the Unemployment Compensation Law (Law).[1] We affirm.

In 2002, Claimant established BLJ Sales Group, Inc., (BLJ Sales) in order to facilitate providing products and services from its sole customer to a large retail store. Subsequently, BLJ Sales lost its contract with its only customer. (Findings of Fact Nos. 1, 4, 7.) Claimant filed a claim for benefits. The local service center determined that Claimant was ineligible for benefits pursuant to section 402(h) of the Law, because Claimant owns fifty percent of BLJ Sales and has a substantial amount of control over the business.

Claimant appealed, and a referee held a hearing on July 11, 2013. Claimant testified that he was the president and is a fifty percent owner of BLJ Sales and that his wife owns the other fifty percent. Claimant stated that BLJ Sales served solely as a customer service conduit between its customer, Riviera Trading (Riviera), and Target Corporation (Target). Claimant stated that Riviera hired BLJ Sales as an independent contractor and that Riviera maintained control over all decisions related to its products. Claimant also testified that Riviera required BLJ Sales not to sell a competitor's product but provided no conditions that BLJ Sales not have any other customers. He further testified that BLJ Sales paid for all of its own business expenses, including any expenses that Claimant incurred while traveling. Claimant stated that his last day of employment with BLJ Sales was March 31, 2012, because BLJ Sales lost Riviera as a customer and had no other business. He also stated that Jodi Leace, his wife, assumed the presidency role when his employment as president of BLJ Sales was terminated. Claimant testified that BLJ Sales still exists as a corporation but that he cannot sell his company because it is worth nothing. (Certified Record (C.R.) at Item No. 8.)

By decision and order dated July 18, 2013, the referee determined that Riviera's control of its own products did not create an employee/employer relationship with Claimant. The referee also determined that, as a fifty percent owner of BLJ Sales, Claimant directed the operation of the corporation for over ten years. The referee concluded that Claimant became an unemployed businessperson in March 2012. Thus, the referee affirmed the local service center's determination that Claimant was ineligible for benefits under section 402(h) of the Law.

Claimant appealed to the Board, which affirmed the referee's decision and adopted and incorporated the ...


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