After being laid off from her full-time job as a salesperson, a woman who added some hours to the real estate work she had already been doing on the side is eligible for unemployment benefits, the Commonwealth Court has ruled.

In so holding, the unanimous en banc panel of five judges determined that increasing hours to a "sideline" employment position does not conflict with the state law prohibiting a claimant from collecting benefits if he or she starts working "full-time."

The panel fit the circumstances in Crocker v. Unemployment Compensation Board of Review into its own exception to state law that otherwise blocks a claimant from claiming benefits when the claimant is involved in "self-employment." The exception allows benefits in cases where self-employment began before termination from full-time employment, the self-employment continued without substantial change after full-time employment was terminated, and the self-employment was not the claimant’s primary source of livelihood.

The ruling reverses the decision of the UCBR, which had argued to the Commonwealth Court that Carrie A. Crocker’s increased hours at Northwood Realty, where she had already been working about 25 to 30 hours a week on top of her full-time job, meant she was no longer "unemployed" under Section 4(u) of the Unemployment Compensation Law, found at 43 P.S. Section 753(u).

"By increasing her hours by five to 10 hours per week, [Crocker] did not effect a substantial change in her sideline activity," Judge Mary Hannah Leavitt said in a seven-page opinion. "The board erred in otherwise holding, and [Crocker] is eligible for unemployment benefits."

Crocker was laid off from her sales job at MET Electrical Testing in July 2009, after working there for about two years, according to the court’s opinion. When she was laid off of work, she added about five or 10 hours to her job at Northwood Realty, the opinion said. She had testified that her work with Northwood Realty started in 2004.

However, when her unemployment compensation center learned of Crocker’s real estate work, it notified her she was not eligible for benefits and imposed a non-fault overpayment on her for the weeks she had received benefits. A referee concluded she was not eligible for benefits and the UCBR affirmed.

Crocker appealed, asking the court to find she was ineligible for benefits because her real estate work was a sideline activity and arguing that she did not receive an overpayment.

The court agreed, rejecting the UCBR’s position that the court’s own holding in Kelly v. Unemployment Compensation Board of Review in 2004 required the court to deny benefits.

In Kelly, the claimant collected benefits after losing his job as a sales manager. Two months later, he began full-time, commission-based work in real estate sales while continuing to receive benefits. When the claimant earned his first commission, he reported it to his UC center, which subsequently terminated benefits.

The case went up the ladder and the Commonwealth Court eventually held that the claimant was not unemployed, as defined in Section 4(u), because his work provided compensation that could "eventually" be payable to him. The court then decided that the fact that the claimant had no earnings for three months did not matter because compensation is not relevant to the question of whether someone is employed.

But Leavitt distinguished Kelly from the instant case and overruled the former to the extent it conflicted with the panel’s March 15 holding in Crocker. Leavitt said it was important that the claimant in Kelly began his full-time, commission-based real estate sales job two months after being fired, as opposed to during or before he started his full-time job from which his benefits were being paid.

Pittsburgh attorney Lawrence R. Chaban represented Crocker and said the court focused on the sideline work aspect of the case, as opposed to self-employment. He said the opinion became broader when the court reversed Kelly, which Chaban noted he had not asked the court to do.

According to Chaban, the referee below found that Crocker could work as many hours as she wanted at her real estate job and, therefore, construed the work as full-time employment.

"The UCBR was pushing the referees finding that she could now work as many hours as she wanted," he said.

Ben Present can be contacted at 215-557-2315 or Follow him on Twitter @BPresentTLI. 

(Copies of the seven-page opinion in Crocker v. Unemployment Compensation Board of Review, PICS No. 13-0627, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •