Peter A. Precht v. Unemployment Compensation Board of Review

Summary

The Pennsylvania Supreme Court considers whether the judicially created "positive steps" test remains applicable when determining whether activities related to a stand-alone business constitute self-employment under the Unemployment Compensation Law. The Court holds that the test is untenable where it permits denial of benefits without proof that the claimant performed services for wages, as required by Section 4(l)(2)(B) of the Law. The Court reverses the Commonwealth Court's order affirming the denial of benefits.

Holdings

1. Section 4(l)(2)(B) of the Unemployment Compensation Law provides the test for determining whether an individual's actions related to a stand-alone business enterprise render the individual self-employed under Section 402(h).
2. The positive steps test contravenes the plain language of Section 4(l)(2)(B) when applied to individuals who have not yet performed services for wages or who are not yet customarily engaged in an independently established trade, occupation, profession, or business.
3. Because Precht had not performed services for wages through his stand-alone business, his efforts to establish that business did not establish self-employment or render him ineligible for unemployment compensation.

Questions Presented

1. Whether Section 4(l)(2)(B) of the Unemployment Compensation Law supplies the test for determining self-employment in the stand-alone business context.
2. Whether the judicially created positive steps test remains viable for determining self-employment under the Unemployment Compensation Law.
3. Whether a claimant who has not performed services for wages and is not yet customarily engaged in an independently established business may be disqualified from unemployment compensation based solely on efforts to establish a future business.

Disposition

reversed