Opinion
No. 2234 C.D. 2012
11-08-2013
The Nursing Group, LLC d/b/a/ The DMB Group, LLC, Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
The Nursing Group LLC, doing business as The DMB Group, LLC (Petitioner), petitions for review of the November 9, 2012 order of the Unemployment Compensation Board of Review (Board), which affirmed a referee's determination that Mary H. Willets (Claimant) was not ineligible for benefits under sections 402(h) and 4(l)(2)(B) of the Unemployment Compensation Law (Law). We vacate and remand.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§802(h), 753(l)(2)(B). Section 402(h) of the Law provides that an employee "shall be ineligible for compensation for any week ... in which [she] is engaged in self-employment." 43 P.S. §802(h). The term "self-employment" is not defined in the Law; however, the courts have utilized the two-prong test in section 4(l)(2)(B) of the Law to fill the void because its obvious purpose is to exclude independent contractors from coverage. Beacon Flag Car Company, Inc. (Doris Weyant) v. Unemployment Compensation Board of Review, 910 A.2d 103, 107 (Pa. Cmwlth. 2006). Section 4(l)(2)(B) states, in pertinent part:
(2)(B) 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).
The relevant facts and procedural history of this case are as follows. Through Petitioner's assistance, Claimant performed services at Wood Services as a registered nurse (RN) from September 21, 2011, until her services were discontinued on April 26, 2012. (Findings of Fact (F.F.) Nos. 1, 3-4.) Claimant applied for unemployment compensation benefits, and by notice dated March 18, 2012, the local service center determined that Claimant was not ineligible for benefits under section 402(h) of the Law. (Reproduced Record (R.R.) at 27a.) Petitioner appealed, and a hearing was held before a referee on August 21, 2012.
At the hearing, Douglas M. Bilyeu (Bilyeu), Petitioner's President and CEO, testified that Wood Services is a residential facility for the developmentally disabled and handicapped located in Langhorne, Bucks County, and is one of Petitioner's clients. (R.R. at 91a.) Bilyeu stated that Claimant signed a Nursing Agreement Contract (Agreement), and that he placed her to work at Wood Services as a Nurse Contractor. (R.R. at 92a.) According to the Agreement, which was admitted into evidence, Petitioner is "engaged in the business of recruiting, brokering and scheduling independent Nurse Contractors for nursing units of facilities and acting as a billing and payment service." (R.R. at 14a.) The Agreement states that a Nurse Contractor engages Petitioner to "secure shift placements" in hospitals and health facilities, bill the facilities for services rendered, and provide payment to the Nurse Contractor. Id. The Agreement also states that a Nurse Contractor is an independent contractor who is exempt from withholding taxes and must obtain his or her own professional liability insurance. (R.R. at 14a, 17a-18a.)
Under the heading "Placements," section 8.1 of the Agreement states, in pertinent part: "[Petitioner] shall notify Nurse Contractor of a placement by telephone or written schedule (email). Nurse Contractor is free to accept or reject any schedule offered except that, if Nurse Contractor submits a desired and confirmed schedule to [Petitioner], the desired schedule may not be withdrawn or rejected." (R.R. at 17a.) Pursuant to section 8.2 of the Agreement:
The placement, once accepted by Nurse Contractor, is the responsibility of the Nurse Contractor. Failure to provide service once a schedule is accepted could result in termination of this Agreement and a charge in accordance with Schedule A attached hereto and made apart hereof, unless a suitable substitute has been arranged by Nurse Contractor and approved by [Petitioner].(R.R. at 17a.) In turn, Schedule A lists "charges" for a Nurse Contractor's failure to attend an accepted shift, ranging from $95.00 for a 4-hour weekday shift to $275.00 for an 8 or 12-hour holiday shift. (R.R. at 22a.)
Section 14 of the Agreement further states that a "Nurse Contractor is free to provide [his or her] own nursing services to any hospital or facility for which services are rendered by Nurse Contractor pursuant to [the] Agreement, either as a staff nurse or independent contractor, whether directly or through a competitor of [Petitioner.]" (R.R. a 20a.) However, this section also contains a non-compete clause, prohibiting a Nurse Contractor, during the term of the Agreement and for a period of one year after its expiration or termination, from starting his or her own staffing agency or working for one of Petitioner's competitors to "provide the nursing services of others to any hospital or facility which is a client of [Petitioner's] at such time." Id.
At the hearing, Bilyeu confirmed that Schedule A permits Petitioner to impose a charge on Nurse Contractors "for shifts that are not completed after they've been accepted." (R.R. at 100a.) Bilyeu stated that when Claimant worked for Wood Services, she signed in and out at that facility and provided invoices to Petitioner so that it could bill Wood Services for the hours she worked. Bilyeu said that after Petitioner received payment from hospitals and facilities, Petitioner would pay a Nurse Contractor, including Claimant, an hourly wage based upon the actual hours worked. (R.R. at 93a, 99a-100a.)
When the referee asked Bilyeu if Claimant worked "set days," Bilyeu responded:
It was whatever was given to me that was available shifts, and based on what the nurses were available to do, including [Claimant.] So whatever the shifts were given to us by the staffing coordinator of the facility were then offered to the nurses that were oriented to Wood Services.(R.R. at 92a.) Bilyeu was later asked by Petitioner's attorney if there were any "set hours of work" for Nurse Contractors, Bilyeu said "no" and stated as follows:
[Petitioner's Attorney]: How are the hours established?
[Bilyeu]: It's based on what the staffing office gives for shifts that are available for the different agencies that supply Wood Services with nurses. So they're [i.e., the
shifts] called in on a monthly basis, or weekly, depending on what's available, what their nurses cannot do, and what shifts still remain open.(R.R. at 95a, 98a-99a.)
* * *
[Petitioner's Attorney]: When [Petitioner] contracts with the nurse (inaudible) any long term (inaudible) in the contract (inaudible)?
[Bilyeu]: There is no guarantee of shifts and services.
Bilyeu added that while performing services for Petitioner, Claimant was free to work for others. Bilyeu testified that there were numerous other staffing agencies for nurses in the area; some of Petitioner's Nurse Contractors also provided nursing services through these staffing agencies while working for Petitioner; Claimant had been looking for additional work; and he personally encouraged Claimant to pursue opportunities with other staffing agencies. (R.R. at 94a, 100a.)
In addition, Bilyeu stated that Claimant was not required to attend any meetings at Petitioner's office, and that Petitioner did not supervise Claimant in the performance of her duties at Wood Services, did not train her, and did not instruct Claimant or other Nurse Contractors regarding how to perform their services. (R.R. at 93a, 99a-100a.) Bilyeu testified that he informed Claimant that her last day of work at Wood Services would be April 26, 2012, because Wood Services told him that, for a variety of reasons, it did not want Claimant to return to its facility; thereafter, Bilyeu did not offer Claimant any other placements/assignments because none were available for someone with Claimant's experience. (R.R. at 94a-96a.)
Claimant testified that she did not work any "set hours," and that Petitioner would call her if Wood Services "needed somebody on a particular day or days." (R.R. at 104a.) Claimant further testified to instances in which she believed that she was supervised by the staff at Wood Services. (R.R. at 104a-06a.)
By decision dated August 23, 2012, the referee determined that Claimant was not ineligible for benefits under section 402(h) of the Law. In pertinent part, the referee found that Claimant signed the Agreement to perform services for Petitioner as an independent contractor; Petitioner set Claimant's rate of pay; Petitioner would receive information from Wood Services when it needed a Nurse Contractor; Petitioner would contact Claimant when work was available at Wood Services; Claimant was required to complete invoices for Petitioner with the hours she worked for payment; Claimant was required to clock in and out at Wood Services; Claimant was not supervised in the performance of her duties; Claimant's services at Wood Services were terminated because Wood Services had concerns with her work performance; and Petitioner did not offer Claimant any work after her services were discontinued with Wood Services because it had no work available. (Findings of Fact Nos. 2, 4, 7, 8-9, 13-15.) Based upon these findings, the referee concluded:
In the present case, [Petitioner] established that [Claimant] was free from direction and control in the performance of her duties. However, [Petitioner] has failed to establish [Claimant] was customarily engaged in an independently established trade, occupation, business or profession. Since [Petitioner] has failed to prove both parts of section (4)(l) of the Law, [Claimant] cannot be considered to be self-employed.(Referee's Decision at 2.)
Petitioner appealed, and the Board affirmed. The Board adopted and incorporated the referee's findings and conclusions and added the following: "The Board finds and concludes that as [Claimant] could not refuse shifts within her schedule, and as [Petitioner] has failed to indicate that [Claimant] had hours available to work for another employer, the Board agrees that [Petitioner] failed to meet the second prong of the test and has failed to prove that [Claimant] was self-employed." (Board's decision at 1.) Notably, neither the referee nor the Board made any credibility determinations in rendering their decisions.
On appeal to this Court, Petitioner challenges the Board's findings that Claimant could not refuse shifts and that the record is devoid of evidence that Claimant had time to work for another employer, asserting that these findings are not supported by substantial evidence. We agree.
Our scope of review in an unemployment compensation appeal is limited to determining whether constitutional rights were violated, whether the adjudication is in accordance with the law, or whether necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa.C.S. §704.
Section 4(l)(2)(B) of the Law sets forth a presumption that one who performs services for wages is an employee -- and thus not ineligible for benefits under section 402(h) - as opposed to an independent contractor -- who is ineligible for benefits under section 402(h). Stage Road Poultry Catchers v. Department of Labor and Industry, Office of Unemployment Compensation Tax Services, 34 A.3d 876, 889 (Pa. Cmwlth. 2011). However, the presumption in favor of employee status is overcome and the claimant will be considered an independent contractor if the putative employer establishes that: (1) the claimant was free from control and direction in performing the services; and (2) the services are of a type customarily performed in an independent trade or business. CE Credits Online v. Unemployment Compensation Board of Review, 946 A.2d 1162, 1167 (Pa. Cmwlth. 2008).
In this case, the Board determined that Petitioner satisfied the first prong of the section 4(l)(2)(B) test but failed to establish the second prong. With regard to the second prong, the following three factors guide our inquiry: (1) whether the claimant is able to work for more than one entity; (2) whether the nature of the business compelled the individual to look to only a single employer for the continuation of such services; and (3) whether the claimant worked on a job-by-job basis and was free to accept or reject assignments. Danielle Viktor, Ltd. v. Department of Labor and Industry, Bureau of Employer Tax Operations, 586 Pa. 196, 222-23, 229-30, 892 A.2d 781, 797-98, 801-02 (2006); Gill v. Department of Labor and Industry, Office of Unemployment Compensation Tax Services, 26 A.3d 567, 570 (Pa. Cmwlth. 2011). Where the employee is free to accept or reject an assignment, the individual generally is not considered to look to a single employer for the continuation of such services. Danielle Viktor, 586 Pa. at 229, 892 A.2d at 801. The issue of whether an individual is an employee or independent contractor under section 4(l)(2)(B) of the Law is a question of law, subject to this Court's review. Stage Road Poultry Catchers, 34 A.3d at 888.
In unemployment compensation proceedings, the Board is the ultimate fact-finding body empowered to resolve conflicts in evidence, to determine the credibility of witnesses, and to determine the weight to be accorded evidence. Oliver v. Unemployment Compensation Board of Review, 5 A.3d 432, 438 (Pa. Cmwlth. 2010) (en banc). Although the Board is the fact finder, the Board's findings of fact are conclusive on appeal only so long as the record, taken as a whole, contains substantial evidence to support them. Penflex, Inc. v. Bryson, 506 Pa. 274, 286, 485 A.2d 359, 365 (1984). In determining whether there is substantial evidence to support the Board's findings, this Court must examine the testimony in the light most favorable to the prevailing party. Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 355, 378 A.2d 829, 831 (1977). Substantial evidence is defined as relevant evidence upon which a reasonable mind could base a conclusion. Johnson v. Unemployment Compensation Board of Review, 502 A.2d 738, 740 (Pa. Cmwlth. 1986).
Here, the Board's finding that Claimant could not refuse shifts offered by Petitioner is not supported by the record. To the contrary, Bilyeu provided uncontradicted testimony that Claimant was free to work for herself and/or other staffing agencies while performing services for Petitioner, and the first clause of section 8.1 of the Agreement states that Claimant "is free to accept or reject any schedule offered." (R.R. at 17a.) The fact that Claimant may not have performed nursing services for other employers during her time with Petitioner is immaterial. This is because the issues in determining whether the type of work constitutes an independent trade or business are whether the claimant was restricted from performing the services for others and whether anything in the nature of the work limits it to a single employer, not whether the claimant chooses to work for third parties. Stage Road Poultry Catchers, 34 A.3d at 891-92; Schneider v. Unemployment Compensation Board of Review, 12 A.3d 754, 757-58 (Pa. Cmwlth. 2010). Moreover, the consistent testimony of Bilyeu and Claimant demonstrate that Claimant did not have any set days or hours of work; Petitioner could not guarantee a Nurse Contractor a certain number of shifts in the long-term; and Petitioner, either weekly or monthly, offered Claimant assignments or a "schedule" on a job-by-job or shift-by-shift basis. Therefore, the record does not support the Board's finding that Claimant could not refuse shifts without suffering adverse consequences.
In its brief, the Board emphasizes that under section 8.2 of the Agreement, Claimant was required to work the shifts that she accepted, and that if she was unable to work a shift, she would have to arrange for a replacement to work her shift or face a penalty charge or possible termination. However, any adverse consequence that a worker is subjected to for failing to show up for a shift that has already been accepted cannot be equated to the worker's inability to accept or decline a shift in the first instance. Indeed, independent contractors, the same as employees, may suffer consequences for not showing up for work when they agree to work on a certain day.
Further, the Board's finding that there was no evidence to prove that Claimant had the time or ability to work for another employer is likewise belied by the record. Section 14 of the Agreement states that Claimant is free to provide nursing services to other facilities, directly or through other staffing agencies, including Petitioner's competitors, so long as she does not start her own business or work for a competitor in order to broker and provide the nursing services of others. Bilyeu provided uncontradicted testimony that there are many other staffing agencies in the area; Nurse Contractors working for Petitioner also work for these agencies; Claimant had been looking for additional work; and he encouraged Claimant to pursue additional work with these agencies. Contrary to the Board's finding, Petitioner adduced evidence that Claimant was free to work for others or had the necessary time and opportunity to seek nursing services elsewhere while she was providing services for Petitioner's clients. See Resource Staffing, Inc. v. Unemployment Compensation Board of Review, 995 A.2d 887, 892-93 (Pa. Cmwlth. 2010) (rejecting the Board's conclusion that the claimant was limited in his ability to seek work for others, even though the claimant spent a considerable amount of time at the client's location, because the contractor agreement, despite containing a non-compete clause, permitted the claimant to provide services to others and the claimant admitted that his schedule was flexible).
For these reasons, we conclude that the two findings made by the Board are not supported by substantial evidence and that these findings were absolutely critical to the Board's determination that Employer failed to establish that Claimant was not engaged in an independently established occupation or trade.
In addition, although the second clause of section 8.1 of the Agreement binds a Nurse Contractor to a particular block schedule of time when a Nurse Contractor submits a schedule to Petitioner and Petitioner approves the schedule, there is no evidence that Claimant submitted such a schedule to Petitioner or that Petitioner approved one. While Bilyeu testified to Claimant's rate of pay for the days and times on which she worked her shifts, (R.R. at 92a), the record does not establish with certainty how many shifts Petitioner offered Claimant on a weekly or monthly basis. More importantly, the Board did not make any findings pertaining to Claimant's work-schedule, particularly the amount of shifts she worked in a given time-frame, and the Board failed to consider and assess Petitioner's evidence, outlined above, that Claimant was free to work for others.
The following exchange between Bilyeu and the referee occurred:
[Referee]: And was there a rate of pay set, or was it negotiated?(R.R. at 92a.)
[Bilyeu]: It was negotiated.
[Referee]: And what was the negotiated rate of pay, if you know?
[Bilyeu]: I do, I just need to pull that out. It differs based on the shifts during the week and the weekend. I'll get that for you in a minute. Would you like to see it?
[Referee]: If you could just - if you tell me what it was first.
[Bilyeu]: Okay. The specifics would be Monday through Friday dayshift, $43 an hour; Monday through Thursday evening shift would be $44; Monday through Thursday night shift, $45; Friday evening all the way through Sunday, 11:00 to 7:00 shift, nightshift, would be $45; and a holiday shift would be $65 per hour.
The Board's decision lacks any credibility determinations, and its analysis does not indicate whether the Board misapprehended the Agreement's language; whether the Board rejected Employer's evidence as not credible; whether the Board found Employer's evidence credible but not deserving of the necessary weight; or whether the Board viewed Employer's evidence as legally insufficient. We reiterate that it is the Board's duty and functional purpose to assign credibility and weight determinations to the evidence presented, see Wardlow v. Unemployment Compensation Board of Review, 387 A.2d 1356, 1357 (Pa. Cmwlth. 1978), or otherwise make the legal basis for its decision apparent. The Board's failure to do so impedes our ability to conduct meaningful appellate review. As this Court has stated:
When ... the burdened party did present sufficient evidence as a matter of law and yet failed to prevail below, we then must determine whether the reason for the adverse determination stems from the fact finder's opinion that the evidence presented was not credible, or, whether instead the fact finder committed an error of law in applying the proper principle of law to the facts presented. If the latter, we can reverse the agency, even if the fact finder has found the testimony of the burdened party credible, because in such instance the issue is a matter of law for this Court to determine. In the former instance, however, the approach is different because our scope of review precludes us from making factual findings or credibility determinations. Moreover, we decline to infer credibility. Thus, we must scrutinize the adjudication. If specific credibility determinations appear that support the result of the adjudication, then we may affirm the decision below on the basis that the burdened party failed in his burden to
persuade the fact finder. If, however, specific credibility determinations do not appear in the factual findings, in the discussion or conclusions, and no other specific explanation for the adverse determination appears in the adjudication, then we have no other alternative but to vacate the order below and remand for specific credibility findings and for an explanation of the agency's decision; otherwise we could not perform our appellate review function.Kirkwood v. Unemployment Compensation Board of Review, 525 A.2d 841, 843-44 (Pa. Cmwlth. 1987) (emphasis in original).
Accordingly, we vacate and remand to the Board to issue a new decision setting forth express credibility determinations and a specific legal explanation for its decision.
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 8th day of November, 2013, the November 9, 2012 order of the Unemployment Compensation Board of Review (Board) is vacated and the case is remanded to the Board for a new decision consistent with this memorandum opinion.
Jurisdiction relinquished.
/s/_________
PATRICIA A. McCULLOUGH, Judge BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION NOT REPORTED
DISSENTING OPINION BY PRESIDENT JUDGE PELLEGRINI
I respectfully dissent because the Unemployment Compensation Board of Review's (Board) finding that Mary H. Willetts (Claimant) "could not refuse shifts within her schedule" and its determination that The Nursing Group, LLC d/b/a The DMB Group, LLC (Employer) "failed to indicate that the claimant had hours available to work for another employer" are supported by the record in this case. As a result, the Board did not err in concluding that Claimant is not ineligible for benefits under Section 402(h) of the Unemployment Compensation Law (Law).
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(h). Section 402(h) states that "[a]n employe shall be ineligible for compensation in any week ... [i]n which he is engaged in self-employment...." Because Section 402(h) does not define "self-employment," this Court looks to Section 4(l)(2)(B)'s definition of "employment" because the purpose of that section is to exclude independent contractors from its coverage. Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593, 595 (Pa. Cmwlth. 2012). Section 4(l)(2)(B) states, in pertinent part:
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). Because the Board determined that Employer satisfied the first prong of the foregoing test to show that Claimant is ineligible for benefits under Section 402(h), Employer was required to establish that: Claimant was also able to perform the same services for others; the nature of the business did not compel Claimant to perform those services only for a single employer; and Claimant worked on job-by-job basis and was free to accept or reject assignments. Danielle Viktor, Ltd. v. Department of Labor and Industry, 586 Pa. 196, 222-23, 229-30, 892 A.2d 781, 797-98, 801-02 (2006).
Section 8.1 of the Nurse Contractor Agreement states that "[a] Nurse Contractor is free to accept or reject any schedule offered except that , if [a] Nurse Contractor submits a desired and confirmed schedule to [Employer] , the desired schedule may not be withdrawn or rejected...." (Reproduced Record (R.R. at 17a) (emphasis added). While Claimant may or may not have been called in to work at a specific date or time, once she submitted her preferred schedule to Employer, she was locked into those times and could not work for another employer whether or not she was actually scheduled to work by Employer. Employer's witness acknowledged that while there was no set time that Claimant worked, she worked Monday through Friday (see id. at 92a), which undermined Claimant's ability to work for another employer during the normal work week. In addition, Claimant specifically testified that she has never been employed as an independent contractor. (Id. at 105a). As a result, the Board properly found that Claimant "could not refuse shifts within her schedule" and properly concluded that Employer did not sustain its burden of proof because it "failed to indicate that the claimant had hours available to work for another employer" or that Claimant did, in fact, work for another employer.
See Jia v. Unemployment Compensation Board of Review, 55 A.3d 545, 549 (Pa. Cmwlth. 2012) ("Similarly, and significantly, the record here lacks any evidence that Claimant customarily engaged in an independent business or performed programming services for any other business. As in Minelli and Sharp [Equipment Co. v. Unemployment Compensation Board of Review, 808 A.2d 1019 (Pa. Cmwlth. 2006)], Claimant's testimony is clear that he was not so engaged and there is no contrary evidence. The single act of signing the consulting contract here does not suffice. Sharp. The contract language providing that Claimant could work for others does not establish that he engaged in an independent business and did work for others. Minelli. Moreover, the scope of work requires Claimant to work in Employer's offices during specified business hours, thus undermining his ability to work for others. See Sharp. The test an employer must satisfy to overcome the presumption of an employment relationship is simply not met here."). --------
Accordingly, unlike the majority, I would affirm the Board's order granting benefits.
/s/_________
DAN PELLEGRINI, President Judge