Opinion
No. 837 C.D. 2008.
Submitted: September 19, 2008.
Filed: July 24, 2009.
BEFORE: LEADBETTER, President Judge; FRIEDMAN, Senior Judge; FLAHERTY, Senior Judge.
OPINION NOT REPORTED
Steger, Gowie, and Company, Inc., (Steger) petitions for review of the adjudication of the Unemployment Compensation Board of Review dismissing its appeal pursuant to Section 501(e) of the Unemployment Compensation Law (Law), 43 P.S. § 821(e). The issue we are asked to decide is whether Steger's after-discovered evidence that Kimberly Shradley violated its policy prohibiting outside employment provides a basis for excusing its failure to file a timely appeal petition.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended. Pursuant to Section 501(e), unless an appeal is filed within 15 calendar days after a determination was mailed, the determination becomes final.
Kimberly Shradley filed a claim for unemployment compensation benefits after she was discharged from her position as a full-time accountant with Steger. The claim petition states as the reason for the discharge: "No longer needed, was not working out." By notice of determination, mailed on January 8, 2008, the UC Service Center granted the claim for benefits; the decision notes that Shradley did not admit to having caused the discharge and that Steger failed to submit sufficient information to sustain a burden of proving that the separation was based on willful misconduct. The notice of determination states, "The last day to timely appeal the determination is: January 23, 2008."
Steger filed a petition for appeal on February 11, 2008. In the space for listing the reasons for disagreeing with the determination and filing the appeal, the appeal petition states, "Employer on 2/2/08 received information from Quaker Mechanical that claimant was doing accounting and tax work for Employer's customer and a violation of employment terms — see attached." Attached to the appeal petition are printouts of e-mail messages between Shradley and Brad Zuke, who forwarded them to Steger on February 3, 2008.
The attached e-mail messages reflect that Shradley initially wrote to Zuke to inform him that she would no longer be working as an accountant for Steger and that another accountant would taking her place; the responding e-mails reflect a disagreement between Shradley and Steger about how to characterize accounting services she performed for one or more clients.
At a hearing before a referee on the issue of the timeliness of Steger's appeal, Eugene Steger, president of Steger, Gowie, testified that Shradley was discharged because she failed to report to work on two consecutive days and refused to provide an explanation for her absence. He acknowledged that Shradley was not discharged for violating her employment contract by providing accounting services to Steger clients. He explained that on February 2, 2008, he acquired information that she was providing accounting services to Steger clients in violation of her employment contract with Steger, and that had Steger been aware of this violation, it would have discharged her for this reason. At the close of the hearing, after the referee refused to hear evidence unrelated to reason for the late appeal, Steger stated that he was asking to appeal nunc pro tunc based on after-discovered evidence and information learned after the appeal period. The referee dismissed Steger's appeal petition without reference to Steger's request for permission to appeal nunc pro tunc.
The Board affirmed. The Board made the following findings of fact:
The Board denied Steger's request for a remand hearing based on its determination that the record was sufficient to enable it to render a decision.
1. A Notice of Determination (determination) was issued to the claimant on January 8, 2008 granting benefits.
2. A copy of this determination was mailed to the employer at its last known post office address on the same date.
3. There is no evidence to indicate that the determination sent to the employer was returned as undeliverable by the postal authorities.
4. The determination held that the claimant had been discharged because her employment was not working out and, therefore, the claimant was eligible for benefits pursuant to Section 402(e) of the Law.
5. The notice informed the employer that January 23, 2008 was the last day on which to file an appeal from this determination.
6. The employer filed its appeal as evidenced by meter mark on February 11, 2008.
7. The employer alleged that the claimant had been discharged for missing two days of work and not explaining the reason for her absence.
8. The employer further alleged that the employer had now discovered that during those two days the claimant had been working for the employer's client on the side.
9. The employer was not misinformed or misled by the unemployment compensation authorities concerning its right or the necessity to appeal.
10. The filing of the late appeal was not caused by fraud or its equivalent by the administrative authorities, a breakdown in the appellate system, or by non-negligent conduct.
The Board dismissed the appeal as untimely under Section 501(e) of the Law, 43 P.S. § 821(e). The Board reasoned, in pertinent part, as follows:
at the time the Department issued its determination, the employer was aware that the Department did not reference the two days that the claimant had missed work without explanation as the reason for her discharge. Nonetheless, the employer did not file an appeal from what at the time they believed was an incorrect determination.
On appeal, Steger argues: 1) the Board failed to consider evidence of Shradley's willful misconduct that came to its attention after the appeal date expired, and 2) it was misled regarding the timeliness of filing an appeal in that it did not acquire information about Shradley's misconduct until after the expiration of the appeal period.
Our scope of review of the Board's decision is limited to determining whether an error of law was committed, constitutional rights were violated, or necessary findings of fact were supported by substantial evidence. Frazier v. Unemployment Comp. Bd. of Review, 833 A.2d 1181 (Pa.Cmwlth. 2003).
Steger avers that it received information that Shradley was employed by one or more of its clients and misappropriated funds from a client, and that Shradley willfully and deceitfully withheld information about said conduct from Steger.
Unless a claimant or employer files an appeal within 15 calendar days after such notice was mailed to the party's last known postal address, the determination becomes final. Section 501(e) of the Law, 43 P.S. § 821(e). The 15-day time limit is mandatory and subject to strict application. Renda v. Unemployment Comp. Bd. of Review, 837 A.2d 685 (Pa.Cmwlth. 2003). If an appeal is not filed within the 15-day appeal period, the determination becomes final and the Board is without jurisdiction to consider the matter. Id. An appeal nunc pro tunc may be allowed when the delay in filing the appeal is caused by extraordinary circumstances involving fraud or a breakdown in the administrative process, or the non-negligent conduct of the appellant or appellate counsel. Cook v. Unemployment Comp. Bd. of Review, 543 Pa. 381, 671 A.2d 1130 (1996).
Steger essentially argues that the Board erred in dismissing his appeal because the delay in filing the appeal was caused by extraordinary circumstances involving non-negligent conduct, in that evidence of Shradley's willful misconduct was discovered after the expiration of the appeal period. Steger cites Preservation Pennsylvania v. Unemployment Comp. Bd. of Review, 673 A.2d 1044 (Pa.Cmwlth. 1996), in support of its contention that an appeal nunc pro tunc is justified when the employer produces after-discovered evidence that the claimant engaged in willful misconduct and concealed the misconduct. The Board counters that Steger failed to meet its burden of proving that non-negligent conduct beyond its control caused the delay in filing its appeal, and that Preservation Pennsylvania is distinguishable from the present case. We agree with the Board.
In Preservation Pennsylvania, the employer furloughed a bookkeeper as a result of budgetary problems; the bookkeeper applied for benefits and, without objection from the employer, began receiving benefits. During the ensuing five months, an audit of financial records revealed that the claimant/bookkeeper embezzled funds prior to her furlough, and the employer contacted the Job Center requesting an investigation. The Job Center issued a notice of determination denying benefits, reasoning that had the employer known of the embezzlement before the claimant's separation, she would have been proven ineligible for willful misconduct under Section 402(e) of the Law, 43 P.S. § 802(e), as well as under Section 3 of the Law, 43 P.S. § 752, because she was not unemployed through no fault of her own. The Job Center issued a fault overpayment. A referee reversed the Job Center, and the Board affirmed.
On appeal, this court enunciated a narrow exception to the rule that an employer must prove an employee's willful misconduct and that the willful misconduct was the actual reason for the employee's discharge from employment. The court held:
See Panaro v. Unemployment Comp. Bd. of Review, 413 A.2d 772 (Pa.Cmwlth. 1980).
where evidence of an employee's embezzlement of an employer's funds, or other criminal conduct committed against an employer which causes the employee's unemployment, is received within a reasonable time after the employee's separation and the employer promptly acts to contest a determination of eligibility for benefits, the Board is not deprived of authority to permit evidence of the after-discovered criminal conduct. The Board may thereafter reconsider the employee's entitlement to benefits in light of the after-discovered criminal conduct and terminate benefits if the employer sustained its burden of proof.
The narrow exception created in Preservation Pennsylvania does not excuse Steger's failure to file a timely appeal. As found by the Board, and supported by the record, Steger alleged that it discharged Shradley for willful misconduct in failing to report to work or explain her absence, and it was aware that the notice of determination did not reference the unexplained absence as the reason for her discharge, yet Steger did not file a timely appeal from what, at the time, it believed was an incorrect determination. Steger had reason to challenge the notice of determination with evidence of Shradley's willful misconduct even before it discovered that she may have performed accounting services for its clients. Unlike the situation in Preservation Pennsylvania, the after-discovered evidence in this case merely gave Steger an additional, and perhaps related, basis for challenging the determination of eligibility.
Preservation Pennsylvania's narrow exception applies where the employer obtains evidence of a claimant's concealed willful misconduct while employed, and the after-discovered evidence provides the basis (i.e., willful misconduct) for the employer to challenge to the determination of eligibility. See PrimePay, LLC v. Unemployment Comp. Bd. of Review, 962 A.2d 684 (Pa.Cmwlth. 2008) ( Preservation Pennsylvania allows employer to substitute after-discovered misconduct for actual reason for separation if employer proves employee concealed misconduct while employed). However, after-discovered evidence is simply not a basis for permitting an appeal nunc pro tunc, and the after-discovered evidence in this case does not excuse Steger's failure to file a timely appeal petition.
Accordingly, the order of the Board is affirmed.
ORDER
AND NOW, this 24th day of July, 2009, the order of the Unemployment Compensation Board of Review in the above-captioned matter is hereby AFFIRMED.