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Archive for the tag “fire”

Accepting Voluntary Layoff Is Now Involuntary Termination

Decades of Pennsylvania law concerning eligibility for unemployment compensation after accepting an early retirement package has been overturned in the recent landmark Pennsylvania Supreme Court case of Diehl v. Unemployment Compensation Board of Review, 57 A.3d 1209

In Diehl, the Plaintiff, a sixty-three (63) year old man with twenty-three (23) years’ seniority with his employer, was given a memorandum from his employer which included a list of twenty (20) employees who would be laid off pursuant to a reduction-in-force; but Plaintiff was not on the aforesaid list. The employer also offered employees over the age of sixty (60) an early retirement program, for which Plaintiff was eligible. Plaintiff accepted the early retirement program and effectively quit his position with employer as a result; he subsequently applied for unemployment compensation benefits.

Plaintiff was ruled to be ineligible for benefits at every level of the litigation of this matter, prior to the Supreme Court’s decision which is the subject of this article. The reasoning of the lower decision-makers’ was based on Plaintiff’s voluntarily accepting the early retirement program which effectively served as a voluntary termination of his employment without a necessitous and compelling reason to do so. Plaintiff was not on the above-mentioned list and he was not compelled to accept the early retirement package, and there was no threat of termination by his employer, if he didn’t accept it.

The Supreme Court’s legal analysis centered upon the Voluntary Layoff Option Provision portion of 43 P.S. Section 802(b) which states the following: “[p]rovided further, [t]hat no otherwise eligible claimant shall be denied benefits for any week in which his unemployment is due to exercising the option of accepting a layoff, from an available position pursuant to a labor-management contract agreement, or pursuant to an established employer plan, program or policy.”

As one would expect, the tribunals below the Supreme Court cited to multiple cases over the last three (3) decades which would lead to the necessary conclusion that Plaintiff is ineligible for benefits due to voluntarily terminating his employment without a necessitous and compelling reason. These cases tend to focus on a judicially created distinction between early retirement and a voluntary layoff, with only the former allowing eligibility for benefits. However, the Supreme Court pointed out that, despite the long history of reasonably consistent decisions, it was apparent that none of other courts and tribunals actually read the statute they were applying and upon which they ruled.

The Supreme Court began its analysis of the decisions below by identifying an underlying interpretive framework for unemployment compensation which requires viewing the unemployment compensation law as liberally as possible in order to provide the maximum benefits possible. Furthermore, the Supreme Court pointed out that when attempting to apply a statute, courts must abide by the letter of the law when the language of the statute is clear and free from ambiguity using the common and approved usage of the words. As a result, the Supreme Court concluded that benefits should only be denied if the statute has explicit language to that effect; indeed there is a presumption that an applicant for unemployment compensation is eligible for benefits and the burden to prove the contrary lies with the employer.

Using the guidelines described above, the Supreme Court indicated that the Plaintiff was denied benefits, and the many cases in support of his denial, was the result of chronic misinterpretation of the Voluntary Layoff Option Provision portion of 43 P.S. Section 802(b), apparently in an attempt to harmonize it with the law regarding ineligibility upon voluntary termination. Despite this, however, the Supreme Court ruled that the language quoted above, taken on its face, uses the term “layoff” without any other modifier, therefore the term layoff can refer to either temporary or permanent separations initiated by an employer. Indeed, the Supreme Court specifically indicated that the Voluntary Layoff Option Provision portion of 43 P.S. Section 802(b) specifically forbids the denial of unemployment compensation benefits due to accepting a voluntarily offered plan by an employer. The Supreme Court asserted that the language of the aforesaid statute is so unambiguous that the legislature’s intent to equate someone falling within the statute with an involuntarily unemployed claimant as opposed to someone who voluntarily terminated his own employment without a necessitous and compelling reason.

To put it simply, the Supreme Court found no language in the aforesaid statute to prevent interpreting it to allow claimants to be eligible for benefits upon accepting employer-initiated early retirement packages offered pursuant to a workforce reduction.

Originally published in The Legal Intelligencer Blog on January 27, 2014 and can be seen here.

The Benefits from Sleeping on the Job

Being caught sleeping on the job is almost always grounds to be fired from one’s job and, as a result, being denied Unemployment Compensation; however the recent case Philadelphia Parking Authority v. Unemployment Compensation Board of Review would seem to indicate otherwise in certain circumstances.

The unemployment compensation claimant in the matter-at-issue, Charlene L. Henney (hereinafter “Claimant”) worked the 3:30pm to midnight shift for the Philadelphia Parking Authority (hereinafter “Employer”). Due to the late hours, and the lack of work for her to do, she would occasionally become drowsy. In order to combat her drowsiness, she often requested additional work from Employer for her to do. Despite the Claimant’s efforts to secure additional work, Employer failed to provide any save on two occasions. Claimant eventually developed some health problems, was hospitalized, and diagnosed with sleep apnea.

On at least four separate occasions Claimant fell asleep during her 3:30pm to midnight shift. Employer terminated Claimant’semployment and contested her application for unemployment compensation. At an unemployment compensation referee’s hearing, Employer argued that Claimant committed willful misconduct and demonstrated that Claimant slept on the job, that it had a specific work rule proscribing sleeping on the job of which Claimant was aware, and that it was Claimant’s alleged violation of the rule against sleeping on the job that caused her to be terminated. In response, Claimant did not deny sleeping on the job. Instead, she testified that she suffered from sleep apnea which caused involuntary sleeping. In addition, she further testified that she requested additional work from Employer in order to help her remain awake during the late hours of her shift and Employer failed to provide the work requested.

In making its decision, the Court had to determine what constitutes willful misconduct. In its review of the applicable law, the Court noted that willful misconduct requires a wanton, intentional, or willful disregard for an employer’s interests, deliberate violation of an employer’s rules, and/or intentional disregard for standards an employer can expect from an employee. The employer has the burden to prove that the claimant was aware of the work rule and willfully, intentionally, and/or deliberately violated it. A Court is to review all of the claimant’s actions in light of all the surrounding circumstances, including the reasons for non-compliance with the work rule. If the employer can meet its burden as described above, the burden shifts to the claimant who then has the burden to prove that her decision to violate the employer’s work rule was for good cause. A physical illness can constitute good cause to violate a work rule. If the claimant had good cause to violate the work rule, then a claimant can be eligible for unemployment benefits. A claimant’s own testimony can serve a competent testimony to her own medical problems.

The Court ruled that the Employer did not meet its burden of proof. The Court found that the Claimant recognized that working late hours with little work to do made her understandably drowsy. The Court further found that the Claimant acted in a responsible manner by informing the Employer of her lack of work, and drowsiness, by asking for additional work. The Employer had the opportunity to provide the work, but failed to do so. Based on the all of the surrounding circumstances, the Court ruled that Claimant’s falling asleep at her position was not the result of any willful, deliberate, or intentional act but the natural result of late nights with little to no work to do. In other words, the Court ruled that Claimant did not intentionally go to sleep while on duty. Due to the fact that the Employer did not meet its burden, the Court did not have to engage in any analysis into Claimant’s sleep apnea as the burden never shifted to Claimant.

In the final analysis, when it comes to whether a claimant is eligible for benefits, a Claimant must commit willful misconduct to be deemed ineligible. If the action – though misconduct – was not done willfully, then a claimant will be eligible for unemployment compensation benefits, even if that misconduct was sleeping on the job.

Originally published on May 2, 2012 in “Upon Further Review” and can be found here.

Episcopalian Evicted and Vestry Vacated

As he was leaving Canterbury Cathedral on December 29, 1170, King Henry II of England, frustrated with Archbishop of Canterbury St. Thomas à Becket, mumbled under his breath those fateful words [w]ill no one rid me of this turbulent priest? Four knights who accompanied the King heard his grumble and, later that same day, returned to the Cathedral and martyred the great Saint on the stairs leading to the quire. Fortunately for the Rt. Rev. (now Bishop) David Moyer (Bp. Moyer), the Episcopal Diocese of Pennsylvania was able to rid itself of him in a much less bloody way, but it took a rather impressive amount of litigation to do it.

Over the last decade or so, due to theological division, with the Episcopal Church (Episcopal Church or National Church) choosing to proceed down a wide and liberal road and the orthodox within it choosing to proceed down a narrow and traditional road, a variety of civil litigation has emerged across the country between the Episcopal Church and the orthodox within it. The litigation has mostly regarded the status of church property held by an orthodox congregation within a liberal diocese, the status of an orthodox diocese within the liberal National Church, or the status of an orthodox clergyman relative to a liberal bishop above him.

The issues described above in general have been raging since about 2002 specifically in Montgomery County Court between Bp. Moyer, who was once an orthodox Episcopal priest and rector of the parish Church of the Good Shepherd in Rosemont (Good Shepherd), and the liberal Episcopal Diocese of Pennsylvania (the Diocese) and its equally liberal diocesan bishop, Rt. Rev. Charles E. Bennison (Bp. Bennison). I have written about the above issues and the litigation between Good Shepherd, Bp. Moyer, and the Diocese and/or Bp. Bennison previously in Upon Further Review. With regard to the issue of property ownership, my January 9, 2009, article National Church v. Regional Diocese: Property Ownership by a Religious Institution (which can be found here), described the legal issues surrounding the property disputes within the Episcopal Church. My March 9, 2009, article Episcopalian In-Fighting Spreads to Montgomery County Courthouse (which can be found here), described the legal issues surrounding the defrocking of Bp. Moyer by Bp. Bennison.

Although the precise issues in the above cited articles are slightly beyond the scope of the instant article, they certainly can help the reader get a clearer picture of the legal landscape over which Good Shepherd, the Episcopal Church, the Diocese, Bp. Moyer, and Bp. Bennison have trod in Montgomery County Court to set the tone for the matter described below, In Re: the Church of the Good Shepherd Rosemont, Pennsylvania Incorporated, No.: 09-0609. Suffice it to say here that the Court has essentially ruled that Bp. Moyer is no longer an employee of the Diocese and has no right to engage in clerical functions within the context of the Diocese and/or the Episcopal Church. The matter before the Court in In Re: the Church of the Good Shepherd Rosemont, Pennsylvania Incorporated is the determination of who has rightful control over the property of Good Shepherd and whether Bp. Moyer may reside in the its rectory.

The Diocese and the Episcopal Church (Petitioners) filed a Petition for Citation against Good Shepherd, Bp. Moyer, and members of Good Shepherds parish Vestry (the layman’s governing body) for possession of the Good Shepherd property and the removal of both Bp. Moyer and the Vestry members for attempting to obstruct and/or remove Petitioners from possession and/or control of the aforesaid property. After a complex web of responsive pleadings, including a series of opposing preliminary objections, the Petitioners filed for Summary Judgment against Good Shepherd and it is in the context of summary judgment that Judge Stanley Ott entered the Order at issue herein.

The Court reviewed the history of Good Shepherds property. Good Shepherd was incorporated in 1870 and in the charter for the parish it declared that it was a member of both the National Church and Diocese. The charter is consistent with the canons and constitutions of both the Diocese and National Church which mandate that parish property is held in trust for the Diocese and, in turn, the National Church. The canons and constitutions also prohibit parish property from being alienated without the consent of the Diocese. The deed to the parish was transferred to the Diocese in 1910 but was subsequently deeded back to the parish in 1967 with the proviso that it be used for worship according to the doctrine and discipline of the National Church.

The primary issue addressed by Judge Ott is who or what controls Good Shepherds property. In support of its petition, Petitioners set forth six (6) arguments: (1) Good Shepherd announced that it is no longer a part of the Diocese and/or National Church and was seeking affiliation with another denomination; (2) Good Shepherd continued to employ Bp. Moyer despite his defrocking in 2002 and the Diocesan canons requiring parishes to only employ clergy licensed by the Diocese; (3) Bp. Moyer entered Holy Orders in another denomination; (4) Good Shepherd has employed other priests not licensed by the Diocese; (5) Good Shepherd has used parish assets to support activities to subvert the Episcopal Church and/or the Diocese; and (6) the diocesan canons authorize the bishop, with consent of the Standing Committee (the Diocese’s layman’s governing body), after a determination has been made that a parish ceased to act in accordance with the Diocese’s constitution and canons, to take necessary measures to take over the parish’s property. The Diocese, through both its Standing Committee and bishop, believed that due to the actions of Bp. Moyer and the members of the Vestry, Good Shepherd had ceased to act within the canons and constitution of the Diocese and were taking necessary measures to take over its property.

Good Shepherd, in response to the Petition, answered the above six (6) arguments as follows: (1) it denied that it has determined to sever ties with the National Church or Diocese; (2) it alleged Bp. Moyer, though not licensed in the Diocese, was licensed by other Dioceses of the Episcopal Church, Anglican Communion, and the Archbishop of Canterbury; (3) it alleged parish assets are still used for the benefit of the Episcopal Church; (4) it denied that the Episcopal Church was hierarchical; (5) it denied that Bp. Moyer entered Holy Orders in a different church; and (6) it alleged the applicable canons and constitutions, when read in concert, do not indicate parish property is held in trust. Finally, Good Shepherd provided various arguments that the Diocesan Bishop of Pennsylvania did not have authority, under the canons and constitution, to bring the action against it.

As an initial matter, the Court, due to the United States Constitutions First Amendment guarantee of the freedom to practice ones religion, ruled that it could not inquire into the propriety of the internal governance or administration of the Church at issue. Further, it also refused, on the same grounds, to rule as to whether Bp. Moyer, who received Holy Orders in another branch of Anglicanism, can still be deemed an Episcopal priest. Regardless of the preceding, the Judge did not believe that either of the above was necessary to make a ruling on the Petition at issue. The Court ruled that although a church was involved, neutral legal principles could be applied to resolve the property dispute raised in the Petition without directly engaging any religious issues.

After all of the above were considered, the Diocese elected to restrict the relief it sought simply to a determination that the rector (Bp. Moyer) and the Vestry members be removed. Presumably the Diocese believed that all of the property dispute issues would be moot if it could successfully oust the rector and Vestry members who they believed were actively engaged in separating Good Shepherd from the Diocese and/or the National Church.

In analyzing the Episcopal Church’s structure, the Court found that it is hierarchical in nature, with a National Church having authority over a diocese which, in turn, has authority over a parish. The Court found that the Vestry of Good Shepherd could be viewed as having taken action to attempt to sever Good Shepherd from both the Diocese and the Episcopal Church. The Court, in the previous case, also found that Bp. Moyer had been defrocked in 2002 and is without license to function as a priest in either the Diocese or the Episcopal Church. With consideration of the above findings, the Judge ruled that it is the will of the Petitioners to evict both Bp. Moyer and the Vestry members and that they had authority to do it. The Petitioners decided to oust Bp. Moyer and the Vestry members because of the very divergent theological and ecclesiastical views between the parties and the Court refused to get involved in those issues. As Bp. Moyer is no longer employed by either the Diocese or National Church, and the Diocese, within an hierarchical church, having control over its property, the Diocese simply has the authority to evict Bp. Moyer out of Good Shepherds rectory and remove the Vestry members from their positions.

Due to the Courts ruling, Bp. Moyer must vacate the rectory immediately, and the Vestry members must immediately step down. Like the knights who martyred St. Thomas, the Petitioners herein, with reference to Bp. Moyer and the Vestry members, can say “let us away this fellow will arise no more.”

Originally published on November 9, 2011 in “Upon Further Review” and can be found here.

Gross Decision (?)

In the 1964 Christmas television classic, Rudolph the Red-Nosed Reindeer, prospector Yukon Cornelius, while in search of silver and gold (or is it gold and silver?), declares that the frightful Abominable Snowmonster of the North, who evokes fear and trembling in anyone who sees him, “is nothing without his choppers,” after toymaker turned dentist, Hermey the Elf, extracts all of the monster’s teeth. Consistent with Yukon’s observation, the United States Supreme Court, with Justice Clarence Thomas writing for the majority, in the recent case of Gross v. FBL Financial Services, Inc., 129 S.Ct. 2343 (U.S. 2009), in what has become a landmark decision, may have used its judicial pliers to extract the teeth of the Age Discrimination in Employment Act (ADEA) for claims brought thereunder by plaintiffs who feel they were victims of age discrimination.

In Gross, the Plaintiff was at the time of the alleged actionable discrimination, a 54-year-old male claims administrator director who had worked for the Defendant for 30 years when Defendant elected to reassign Gross to the position of claims project coordinator. Simultaneously, Defendant reassigned Gross’ former subordinate, a woman in her early forties, to a newly created position that carried with it most of Gross’ former responsibilities. Gross believed his reassignment to be effectively a demotion, and that he was discriminated against based on his age, and he brought suit against Defendant under the ADEA claiming age discrimination.

At the conclusion of the trial of this matter at the District Court level, the Judge, over Defendant’s objections, instructed the jury that a verdict must be entered against the Defendant if Gross proved, by a preponderance of the evidence, that Defendant demoted him and Gross’ age was the motivating factor in Defendant’s decision to demote him. The jury was further instructed that Gross’ age was a motivating factor if it played a part or role in the Defendant’s decision to demote him. In other words, if the Defendant’s motives were a mix of lawful and unlawful (e.g.: age discrimination) reasons for demotion, then a verdict would have to be entered against the Defendant. Finally, the jury was instructed that if the Defendant proved, by a preponderance of the evidence, that it would have demoted Gross regardless of age, a verdict would have to be entered against Gross. This portion of the jury instructions presumes that the burden of proof shifts from Gross, who has to prove that age was the motivating factor in Defendant’s decision, to Defendant, who has to prove that it would have demoted Gross regardless of his age.

Gross was victorious at the District Court level causing the Defendant to appeal to the United States Court of Appeals for the 8th Circuit. The Circuit Court reversed and remanded the District Court decision for a new trial as a result of what it found to have been improper jury instructions. Gross appealed to the Supreme Court of the United States.

The question presented to that Court was whether a case under the ADEA requires (1) a shifting burden of proof and (2) could successfully proceed when an employer takes a discriminatory action against an employee based upon mixed motives. By including these two elements when enunciating jury instructions, the District Court implicitly requested the jury to apply an analysis required for alleged discrimination pursuant to Title VII of the Civil Rights Act as interpreted by the landmark case Price Waterhouse v. Hopkins, 490 US 228 (1989). The Court first examined whether a shifting burden of proof is warranted under the ADEA. It then examined whether the ADEA allows for a claim of mixed motives or requires a “but-for” analysis, id est but for the plaintiff’s age, the employer would not have taken the alleged discriminatory action.

As the District Court’s jury instructions were an application of the requirements under Title VII of the Civil Rights Act, the primary focus of the Court’s analysis was a comparison of the language of the ADEA with that of Title VII. When making its comparison, the Court, through Justice Thomas’ opinion writing for the majority, also took note of the fact that Congress has amended both Title VII and the ADEA, with some amendments occurring simultaneously. Ultimately, Justice Thomas’ textual analysis of the respective statutes is actually quite simple. First, Justice Thomas observed that the ADEA contains absolutely no language regarding a shifting of burdens of proof while Title VII does have such language. Second, Justice Thomas also noted that the ADEA does not contain any language implying that proving that an employer acted with mixed-motives is sufficient to warrant a judgment in favor of an allegedly discriminated-against plaintiff. Instead, as Justice Thomas pointed out, the ADEA specifically says that a discriminatory act must be “because of” an individual’s age. After a somewhat extensive, and perhaps torturously overwrought, dictionary and linguistic examination of the phrase “because of,” Justice Thomas concluded that a “but for” analysis is consistent with the aforesaid language. Finally, Justice Thomas, attempting to divine the mental intent of the legislators responsible for amending and voting for the changes to the ADEA years in the past, suggested that since both Title VII and the ADEA were amended around the same time, and the mixed-motives language inserted into Title VII was not correspondingly inserted into the ADEA, a logical conclusion could be drawn that Congress did not want and/or intend the ADEA to allow claims to successfully proceed in cases involving mixed-motives.

Justice Stevens, in his dissent, argued that burden shifting, and, therefore, permitting mixed-motives cases, ought to be permitted under the ADEA as the ADEA was drafted, in haec verba, from Title VII and that Title VII analysis has, for quite some time, been commonly applied to the ADEA by the United States Supreme Court. Furthermore, he explained that the phrase “because of” does not require the rigid and exclusive meaning that is synonymous with “but for” applied by Justice Thomas. Justice Stevens argues that “because of” can certainly permit multiple motives, including a discriminatory one, but does not, on its face, require a single motive as Justice Thomas suggests. Justice Stevens also pointed out that the cases under ADEA have regularly allowed burden-shifting and mixed-motives cases and one cannot conjure some sort of presumption, through an attempt to divine significant meaning from a non-action by Congress, from Congress’ amending Title VII and the ADEA differently. Indeed, as burden-shifting and mixed motives cases were already permitted under the Court’s previous rulings, why would Congress need to codify it? Justice Stevens argues that Congress’ lack of action confirms their approval of existing case law under the ADEA. Justice Breyer, in his rather brief dissent, simply focused upon the fact that a requirement to prove “but for” with direct evidence is, at its core, a requirement to prove what someone else’s thoughts were; an impossible task even for the thinker himself, especially after so much time and influences come to pass after the suit has been filed. For Justice Breyer, a “but for” analysis requires a plaintiff to engage in finding proof of hypothetical thoughts; proof that, in reality, could never be found, and resulting in a toothless ADEA that could never be effectively employed by plaintiffs. For Justice Beyer, Congressional intent was to have an ADEA under which plaintiffs could have successful claims, as opposed to an ADEA that requires a plaintiff to prove the impossible, effectively foreclosing any viable actions for age discrimination.

Obviously, Justice Thomas’ opinion had less-than-favorable results for Gross. As Gross’s employer did not have to prove what its actual motive was for demoting him, and Gross could not prove that “but for” his age he would not have been demoted, Gross’s matter was remanded to proceed in a manner consistent with Justice Thomas’ opinion. In sum, pursuant to the current authoritative precedent described herein, a plaintiff bringing an action under the ADEA must prove, by a preponderance of the evidence, that his age was the only factor motivating the alleged discriminatory action through the presentation of direct evidence in order to have a successful suit. As it stands now, plaintiffs bringing suit under the ADEA are required to plunge their way into the nearly impossible task of entering someone else’s mind to learn how he made his decisions. The Gross decision could not have come at a worse time because the declining economy has impacted heavily on older employees, resulting in a substantial increase in ADEA claims being filed at the state and federal discrimination administrative agency level by impacted employees. It makes their task of proving discrimination far harder. Although there is an effort by interest groups acting on behalf of employees within the ADEA age purviews to have Congress enact a law that would repudiate Gross, that effort may not be successful, especially given the outcome of the latest Congressional elections and the current political makeup of Congress.

After Gross, Hermey the Elf’s advice about the once-fearsome, but now-toothless, Abominable Snowmonster holds equally true for employers when faced with the post-Gross ADEA: “don’t let this big blowhard scare you anymore, just walk right past him.”

This article also appeared in the Philadelphia Bar Association’s “Upon Further Review” on January 6, 2011 and can also be found here on my website.

Exceptions to Ecclesiastical Employment Exemptions

In the article titled “Episcopalian In-Fighting Spreads to Montgomery County Courthouse,” published in the March 2009 edition of Upon Further Review, I reported on the employment matter raised by the Rev. David Moyer against the Episcopal Diocese of Pennsylvania regarding his termination by the Diocese from his position as priest in the Church. Suffice it to say here, the Court did not rule in favor of Fr. Moyer as it did not want to entangle itself into an interchurch squabble.  However, a recent Pennsylvania case, Mundie v. Christ United Church of Christ, 2009 Pa.Super. 262, has delved into the question of when a court may interject itself into a church employment matter.

In Mundie, the Plaintiff, the Rev. Melvin S. Mundie, was employed as a clergyman at Christ United Church of Christ, the Defendant.  Defendant’s governing body, the Consistory, entered into an employment contract with Plaintiff on May 26, 2005.  Along with salary, health insurance, and being permitted to reside in the parsonage, the employment contract also specifically stated that the term of Plaintiff’s employment at Defendant would conclude on June 30, 2007, unless otherwise agreed in writing.  During the course of Plaintiff’s ministry with Defendant, so-called “church problems” arose between Plaintiff and the congregation that led to, ostensibly, a coup, resulting in the congregation taking over the Consistory and firing Plaintiff on August 28, 2006.

Due to what he perceived as an unlawful termination, Plaintiff brought suit against Defendant for breach of his employment contract.  Plaintiff alleged that he was entitled to work for Defendant, collect a salary and health care benefits, and reside in the parsonage until June 30, 2007.  Defendant filed preliminary objections stating that Plaintiff’s employment with Defendant was a religious issue into which courts may not intrude.

The Court noted that, as a basic principle, Defendant is correct; a court may not involve itself in what amounts to a religious issue.  It is also correct to note that, generally speaking, a religious body’s decisions to hire, fire and prescribe duties to its clergy are constitutionally protected and exempt from a court’s analysis.  However, contrarily, a religious body may not avoid a court’s involvement into issues that are exclusively secular.  For example, as theMundie Court noted, issues that are not doctrinal issues include “the meaning of agreements on wills, trusts, contracts, and property ownership.  These disputes are questions of civil law and are not predicated on any religious doctrine.”  Therefore, the narrow issue before theMundie Court was Defendant’s preliminary objections dealing with whether Plaintiff’s employment with Defendant was simply a contractual issue or one that was doctrinal in nature and exempt from court review.

The Court overruled the preliminary objections on the grounds that insufficient discovery had been conducted to shed light on the question of whether Plaintiff’s termination is simply a breach of a secular contract or one that is of more significant doctrinal import.  As a light most favorable to the facts plead in Plaintiff’s Complaint must be shed, the Court concluded, for the purposes of the preliminary objections, that Plaintiff’s claims could be exclusively secular.  Without an Answer or any discovery, Defendant simply did not have sufficient facts to demonstrate anything to the contrary this early in its litigation.  Now that Defendant’s preliminary objections have been overruled, Defendant will have to file an Answer and discovery will presumably ensue.  If, through discovery, it is revealed that this matter is a simple breach of contract, Plaintiff’s case may progress; if it is considered to be a matter of doctrine, the Rev. Mundie’s suit will likely face the same fate as that of Fr. Moyer’s.

Originally published in Upon Further Review on March 4, 2010 and can be viewed here and on my website here.

Employed or Not Employed? That Is the Question

It might seem obvious that one of the primary criteria used to determine whether an individual is eligible for Unemployment Compensation is for that individual to have been actually employed by the perceived “employer” he was “working for” before his/her separation from said perceived employer. Although colloquial parlance equates “working for” someone/something with employment, Unemployment Compensation Law makes a distinction between those who “work for” someone/something under an employment relationship and those who have an independent contracting relationship. Consequently, when an individual applies for and is denied Unemployment Compensation, he may be shocked to learn that his denial is due to the fact that the person/entity he had been “working for,” for however long or short period of time, was never actually his “employer”. While some may say that this distinction appears to be mere hair splitting, its impact on whether an Unemployment Compensation claimant is granted or denied benefits is ultimately dispositive. That is, an individual who has an independent contractor relationship with an individual/entity is not eligible for Unemployment Compensation benefits if that relationship is terminated. It matters not whether the contracting relationship was terminated for “cause” or was “voluntary” – the mere existence of an independent contractor relationship renders the potential claimant ineligible for benefits. Therefore, it is crucial to know and understand the distinction between employment and independent contracting in the context of Unemployment Compensation and this article will lay out the criteria for the definition of independent contracting as it applies to the collection of Unemployment Compensation benefits.

Under Pennsylvania Unemployment Compensation Law, if one is an independent contractor, then one is considered to be self-employed. Although the statute defines neither independent contractor nor self-employment, the statute does define “employment” essentially as follows: ” [s]ervices performed by an individual for wages shall be deemed to be employment subject to this act”. 43 P.S. § 753 (l)(2)(B). The statute continues, establishing basic guidelines as to what employment is not: “[one is deemed employed] 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 the contract for 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).

While describing what employment is not, the above quoted basic guidelines, conversely, establish the essential criteria for self-employment (i.e. independent contracting). Consequently, the Pennsylvania Courts use the following two-part test to determine whether an individual is self-employed (i.e.: independently contracting): (1) whether the claimant was free from control and direction in the performance of the work; and (2) the business is one that is customarily engaged in as an independent trade or business. (Venango Newspapers v. Com., Unemployment Compensation Board of Review, 158 Pa. Cmwlth. 379, 631 A.2d 1384 (Pa. Cmwlth. 1993), holding that where claimant did not receive on-the-job training, supplied his own tools and had no taxes deducted from the sums received, claimant was not an employee.) As the claim that an individual is not an employee but rather an independent contractor is essentially an affirmative defense made by the alleged employer against the claim for benefits, the alleged employer generally has the burden to prove that the claimant is not an employee.

To determine whether an individual is free from the control and direction of an employer in the performance of work, the Pennsylvania Courts frequently look to eight factors. No one factor is determinative as to whether an individual is an employee or independent contractor, and the Court generally considers and weighs all eight factors in the employment relationship.

The eight factors considered by the Court are as follows: first, the Court examines how the job was performed. Specifically, the Court is more likely to decide that an individual is an independent contractor if he sets his own hours, creates his own work/task agenda, and/or decides how many other workers are needed for a particular task. Second, the Court looks at whether there was a fixed rate of remuneration. Who decides the cost of the services being provided? Who decides when/if raises are granted? A worker who establishes his own pay rate and decides when his own pay rate increases or decreases is functioning more like an independent contractor than employee. Third, the Court notes whether taxes are deducted from the claimant’s remuneration. The Court is more likely to rule that a worker is an independent contractor if the worker receives a 1099 form and is able to deduct expenses and be responsible for paying his own taxes. Fourth, the Court also notes whether the alleged employer supplies the tools necessary to carry out the services being provided. If the worker must provide and use his own tools to carry out his tasks, the Court is more likely to rule that the worker is an independent contractor. Fifth, the Court ascertains whether the alleged employer offers on-the-job training. If an alleged employer provides on-the-job training, the Court is more likely to rule that there is an employment relationship. Sixth, the Court discerns whether there were regular meetings with the alleged employer. Regular meetings generally will signify an employment relationship. Seventh, the Court inquires into whether the claimant suffers risk of loss when claimant’s expenses exceed income. In other words, if the business fails, will the alleged employee merely lose his job, or will the alleged employee have the responsibility to satisfy the business “potential creditors If the alleged employee merely loses his job, and has no responsibility to address the business’ creditors, then the Court is likely to rule that he is an employee rather than an independent contractor. Eighth, the Court investigates into whether the claimant was compelled to look only to the employer for further employment. If a worker regularly sought and/or acquired the same or similar work from other sources, while already engaged with an alleged employer, then the Court is likely to rule that the worker had independent contracting relationships with his “employers. See, e.g., Venango, 157 Pa. Cmlwth. 379, 631 A.2d 1384 (Pa. Cmwlth. 1993); Kelly v. Comm., Unemployment Compensation Board of Review, 107 Pa. Cmwlth. 261, 528 A.2d 294 (Pa. Cmwlth. 1987) (holding that claimant was self-employed where claimant was paid a lump sum for his performance, and he was not compelled to look only to general contractor for further employment); Pavalonis v. Comm., Unemployment Compensation Board of Review, 57 Pa. Cmwlth. 289, 426 A.2d 215 (Pa. Cmwlth. 1981) (holding that claimant was self-employed when claimant supplied all of his tools and materials, did not receive any on-the job training, did not receive a fixed hourly wage and had no taxes deducted from the sums received from employers).

To determine whether a business is one which is customarily engaged in as an independent trade or business, the Pennsylvania Courts consider two factors: (1) whether the claimant is capable of performing the activities in question for anyone who wish to avail themselves of the services; and (2) whether the nature of the business compel the individual to look only to a single employer for the continuation of such services. See, e.g., Venango Newspapers, 631 A.2d 1384 (Pa. Cmwlth. 1993); Kelly, 528 A.2d 294 (Pa. Cmwlth. 1987); Pavalonis, 57 Pa. Cmwlth. 289, 426 A.2d 215 (Pa. Cmwlth. 1981).

The two above-mentioned factors essentially revolve around a worker’s loyalty to the individual/entity providing him with the work. Is the worker permitted to do the same work for two different (even competing) individuals/entities simultaneously? Does the worker recieve all of his work from a single individual/entity? May/must the worker seek work from more than one source? Perhaps most importantly, who decides where the worker can perform his services? If a worker is constrained to work for a single individual/entity and/or cannot select himself where he will perform his services, then the Court will weigh these factors in favor of the worker being in an employment relationship rather than an independent contracting relationship.

Significantly, the amount of money a worker receives is not a determinative factor in these analyses, as even a small sum earned does not automatically remove the designation of “independent contractor”.

Ultimately, all of the above factors can essentially be reduced to a single word: freedom. Does the worker have the freedom to set his own schedule? The freedom to establish his own pay rate? The freedom to work for competing businesses simultaneously? As a corollary, does the worker have to bear the responsibilities associated with this freedom, such as deducting his own taxes, using his own tools, and bearing the risk and burden of financial loss in the business? In the end, the more freedom a worker has the more likely the Court will find that he is an independent contractor (self-employed); the less freedom a worker has the more likely the Court will rule that the worker is an employee.

This article appeared in The Legal Intelligencer on March 30, 2006 and can be found here.

It can also be found here on my firm’s website.

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