An unemployment compensation referee and Willow Grove, Pa.-area attorney is not eligible for unemployment benefits, the Commonwealth Court has decided, upholding the Unemployment Compensation Board of Review’s finding that she was terminated for willful misconduct for allegedly engaging in ex parte communications and convincing two complainants to drop their cases.

A three-judge panel unanimously ruled October 8 that the unemployment board did not err when it reviewed the termination of Sandra L. Henderson, who formerly worked as an unemployment compensation referee with the Pennsylvania Department of Labor and Industry, and determined that she was ineligible for benefits.

Henderson had argued, among other things, that the unemployment board had a conflict of interest in presiding over her case.

Writing the opinion for the court, Judge P. Kevin Brobson agreed with the board’s argument that, since it does not appoint referees, it is not an interested party, and determined that the board was not required to recuse itself. Judges Renee Cohn Jubelirer and Anne E. Covey joined in the decision.

“Moreover, the rule of necessity prevents recusal of all members of an agency because an agency is either statutorily or constitutionally bound to carry out its duties,” Brobson added. “Despite claimant’s suggestion to the contrary, there is no other individual or body authorized by statute or otherwise permitted by law to hear her appeal.”

According to Brobson, during an investigation into Henderson’s requests for overtime, a manager with the board discovered an accidentally recorded, off-the-record conversation between Henderson and a complainant, in which Henderson allegedly told the complainant that an overpayment determination had become final, that there was nothing she could do about it, and that the complainant would not have to pay the overpayment back unless he received future benefits. The complainant eventually withdrew his appeal, Brobson said.

As part of the investigation, the manager also contacted another complainant who had dropped a case. The complainant allegedly told the manager that, during a prehearing meeting, Henderson reported that her appeal was untimely and therefore holding a hearing was a waste of time. The complainant further said that Henderson never allowed her to testify as to why her appeal was untimely or why she qualified for financial hardship, Brobson said. The complainant allegedly also said that Henderson never went on the record during the discussion, the opinion said.

Following a fact-finding conference, where Henderson contended that she conducted prehearing conferences with parties to explain what will happen at the hearings, that it was common practice to such hold informal preconference meetings without giving notice to all the parties and that she was not aware of the rule requiring that such prehearing conferences needed to be recorded, Henderson was fired for, among other things, violation of the code of conduct in initiating ex parte communications and encouraging parties to withdraw their appeals without affording them due process rights of a hearing.

The Unemployment Compensation Board of Review then denied her claim for unemployment benefits.

Henderson appealed. Along with arguing that, as her employer, the board had a conflict of interest, Henderson also contended that the board violated her right to due process and her right to cross-examine a witness when it denied requests for continuances and a request to reopen the record.

She further contended that the complainant who testified that Henderson told her that her appeal was untimely was not a credible witness, and that the board erred in concluding her actions were willful misconduct.

Upholding the board’s decision, the Commonwealth Court said that the board provided a fair hearing before an impartial hearing officer, that some of Henderson’s contentions that the board was biased lacked specifics and that the board had the discretion to determine credibility.

“Although the board accepted ‘as credible the testimony … that oftentimes referees will counsel a party to a one-party hearing on the issues involved if that party asks a question prior to the hearing,’ the board reasoned that this is not what [Henderson] was doing,” Brobson said. “It does not appear that the purported ex parte nature of [Henderson's] discussion was what the board found to be improper. Rather, the substance of the conversation was the offending conduct, not the absence of the other party.”

The Commonwealth Court further determined that it was Henderson’s delay in resubmitting a subpoena, allegedly caused in part by Henderson’s requesting that the subpoenas be mailed to her once they were signed, that prevented her from serving subpoenas on time and caused her to lose the ability to cross-examine the witness.

Henderson, who represented herself pro se, and Gerard Mackarevich, who represented the unemployment board, did not return calls for comment.

Max Mitchell can be contacted at 215-557-2354 or mmitchell@alm.com. Follow him on Twitter @MMitchellTLI. •

(Copies of the 37-page opinion in Henderson v. Unemployment Compensation Board of Review, PICS No. 13-2843, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •