Opinion
C.A. No. 11A-01-008 MMJ.
Submitted: August 16, 2011.
Decided: November 4, 2011.
On Appeal from a Decision of the Unemployment Insurance Appeal Board AFFIRMED.
Arijuana N. Hitchens, Pro Se, Appellant.
Katisha D. Fortune, Esquire, Department of Justice, Wilmington, Delaware, Attorney for Unemployment Insurance Appeal Board.
MEMORANDUM OPINION
FACTUAL AND PROCEDURAL CONTEXT
In January 2006, the Claimant, Arijuana Hitchens, began working for Primerica Life Insurance Company as an independent representative. Claimant provided financial services to her clients and her earnings were derived solely from commissions. Claimant's position with Primerica was largely unprofitable, with Claimant sustaining a total net loss of $2,776 for the period of 2007 through 2009.
In February 2008, while working for Primerica, Claimant opened her own income tax preparation business called Taxes More. As the sole proprietor and sole employee of Taxes More, Claimant prepared federal and state income tax returns for individuals and small businesses. Claimant estimated that during tax season, she worked a minimum of ten hours per week for Taxes More. Claimant's 2008 and 2009 income tax returns reflect that Taxes More yielded a net profit of $511 during this time period.
On December 31, 2009, Taxes More's business license lapsed after Claimant failed to file the annual renewal. Taxes More, however, continued to conduct business in 2010.
To supplement the income generated from Taxes More, Claimant obtained a job with the Census Bureau in April 2010 as an enumerator. Claimant worked for the Census Bureau until she was laid off in August 2010.
Claimant applied for unemployment benefits on September 19, 2010. On November 10, 2010, an Appeals Referee denied Claimant benefits after finding that Claimant was not unemployed pursuant to 19 Del. C. § 3302(17). Claimant appealed the Referee's decision to the Unemployment Insurance Appeal Board ("Board").
On December 30, 2010, the Board affirmed the Referee's decision. The Board found that because Claimant was "collecting some income and working in some capacity on a weekly basis," she was not an "unemployed individual" within the meaning of 19 Del. C. § 3302(17). Rather, according to the Board, Claimant was self-employed, and thus, ineligible for unemployment benefits.
On January 19, 2011, Claimant filed a pro se appeal of the Board's decision to this Court. Claimant acknowledges that although she is self-employed, it is not the primary source of her livelihood and she remains available for full-time work. As such, Claimant claims she is entitled to unemployment benefits.
STANDARD OF REVIEW
On appeal from the Board, the Superior Court must determine if the Board's factual findings are supported by substantial evidence in the record and free from legal error. Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." The Court must review the record to determine if the evidence is legally adequate to support the Board's factual findings. The Court does not "weigh evidence, determine questions of credibility or make its own factual findings." If the record lacks satisfactory proof in support of the Board's finding or decision, the Court may overturn the Board's decision. On appeal, the Superior Court reviews legal issues de novo.ANALYSIS
In order to be eligible for the receipt of unemployment benefits, an individual must be unemployed. "`Unemployment' exists and an individual is `unemployed' in any week during which the individual performs no services and with respect to which no wages are payable to the individual. . . ."Individuals who are self-employed do not fall within the statutory definition of "unemployed," and thus, are barred from the receipt of unemployment benefits. As the Court has recognized, "[U]nemployment benefits are intended to support persons who become unemployed through no fault of their own and to promote stable employment and not to support the early stages of a new business or self employed individuals whose enterprises have simply not been profitable."
O'Brien v. Unemployment Ins. Appeal Bd., 1993 WL 603363, at *3 (Del. Super.). See also Workman v. Del. Dept. of Labor, 2011 WL 3903793, at *3 (Del. Super.); Jones v. Unemployment Ins. Appeal Bd., 2001 WL 755379, at *2 (Del. Super.).
Workman, 2011 WL 3903793, at *2. See also Weeraratne v. Unemployment Ins. Appeal Bd., 1995 WL 840722, at *2 (Del. Super.) (holding that self-employment acts as a bar to unemployment benefits because such benefits are not "for the purpose of supporting the early stages of a new business").
Although there is no bright-line test to determine whether an individual is, in fact, self-employed, Delaware case law suggests that self-employment exists "where an individual has made more than de minimis efforts on behalf of an operating business that he or she owns, regardless of whether the business is profitable or the individual remains available for other work." For example, in Miller v. Herschmann, the Court found that the claimant was self-employed, and thus ineligible for unemployment benefits, because he "acknowledged that he operated his own business and described his attempts to make the business successful." Likewise, in Workman v. Delaware Department of Labor, the Court denied the claimant unemployment benefits after determining that he was self-employed rather than unemployed. In reaching that conclusion, the Court noted that the claimant "acknowledged at his hearings that he operated two start-up businesses of his own," "described his efforts to make those businesses successful," and "acknowledged that he received payments for his efforts in both businesses."
Id. at *3.
2007 WL 4577373 (Del. Super.).
Id. at *2.
2011 WL 3903793 (Del. Super.).
Id. at *4.
The Court finds there to be substantial evidence to support the Board's determination that Claimant was not unemployed. The record establishes that Claimant was an independent representative for Primerica as well as the sole proprietor and sole employee of Taxes More. Although Claimant was unable to testify with any certainty as to the amount of time she invested in each business, she did indicate that she worked a minimum of ten hours per week at Taxes More. Claimant further acknowledged that she received payment for her efforts in both businesses.
The Board properly found that Claimant was a self-employed individual, whose business endeavors were the primary means by which she supported herself. Claimant acknowledged that her businesses were her primary sources of income and that her employment with the Census Bureau was merely to supplement her income. Claimant further acknowledged that she only sought unemployment benefits upon being laid off because she "need[ed] a little assistance until [her] businesses [had] more money coming in."
It is clear that Claimant's motivation in seeking unemployment benefits was to help support her business endeavors, which, by all accounts, were largely unprofitable. Because such a purpose was not contemplated by the Delaware General Assembly, the Court finds that Claimant is ineligible for unemployment benefits.
CONCLUSION
Claimant is not an unemployed individual within the meaning of 19 Del. C. § 3302(17). There is substantial evidence in the record to support the Board's finding that Claimant was, in fact, self-employed, and thus, ineligible for unemployment benefits. The Court finds that the Board's decision is free from legal error. THEREFORE, the decision of the Unemployment Insurance Appeal Board is hereby AFFIRMED.