Employers Now Required To Have Lawyers For PA Unemployment Compensation Cases
NOTE: ON FEBRUARY 17, 2007, THE PENNSYLVANIA SUPREME COURT OVERRULED THE COMMONWEALTH COURT AND FOUND THAT CORPORATIONS MAY BE REPRESENTED BY NON-ATTORNIES AT UNEMPLOYMENT REFEREE HEARINGS.
The Commonwealth Court of Pennsylvania threw both corporations and employees a curveball on February 3, 2005, with its decision in the case of Harkness v. Unemployment Compensation Bd. of Review, --- A.2d ----, 2005 WL 245622 (Pa.Cmwlth. 2005). In a 5-2 decision, the Court held that corporations, LLCs, and government agencies must now be represented by an attorney both at hearings before unemployment referees and at proceedings before the Unemployment Compensation Board of Review. This decision has a sweeping impact upon every company and every person involved in unemployment compensation (UC) cases in Pennsylvania.
In the Harkness case, the employer was represented at the hearing by a non-attorney employee of TALX UC EXPRESS, a company located in St. Louis, Missouri. TALX UC EXPRESS was in the business of representing other companies in unemployment compensation cases. The Commonwealth Court noted that “[a]s a general rule, a non-attorney may not represent parties before the Pennsylvania courts or administrative agencies” citing Nolan v. Department of Public Welfare, 673 A.2d 414 (Pa.Cmwlth.1995). The Court went on to hold that that any non-lawyer representing another legal entity in UC proceedings was engaging in the unauthorized practice of law, and thus the TALX representation was invalid, requiring the case to be remanded to the UC referee, and essentially retried.
Until the Pennsylvania Supreme Court overturns Harkness, or until the PA legislature changes the law to authorize corporations to represent themselves or be represented by a non-attorney in UC cases, this decision will require many PA employers to secure legal counsel to effectively prosecute or defend their cases. Sole proprietors are exempt from this holding, as they are not corporate entities with a legal existence apart from themselves.
On the other hand, Section 702 of the Pennsylvania Unemployment Compensation Law, 43 P.S. § 862, and the UC regulations promulgated at 34 Pa.Code § 101.41, specifically permit an individual claiming unemployment compensation to be represented by a non-lawyer in an unemployment compensation proceeding. The employer in Harkness attempted to argue that since employees are allowed to be represented by non-lawyers, employers should, in fairness, be allowed to do so as well. The Court rejected this argument, noting that the law was quite clear that only employees could have non-lawyer representation in PA unemployment cases.
What, then, are the full implications of the Harkness decision for both employers and employees? As Judge Leadbetter noted in his dissent, employers may now be less willing to defend employees’ unemployment claims if they have to spend money on a lawyer, potentially allowing less-deserving employees to receive benefits. Additionally, employers who attend UC hearings in PA without licensed counsel might be allowed to testify, but will likely not be permitted to argue the law, make objections to evidence, or to cross-examine the claimant’s witnesses.
On the other hand, UC claimants may find themselves at a disadvantage if suddenly many employers are represented by attorneys at their hearings. Few laypeople have the training, knowledge, resources and courtroom experience to hold their own in a formal legal setting against a competent lawyer, where the outcome of a case could turn on the correct application of the rules of evidence or other nuances of legal practice. It is too early to tell whether corporate entities will now regularly hire attorneys to represent them in PA unemployment cases, or whether they will attempt to go it alone, restricted only to testifying, and not being permitted to engage in cross-examination or to make legal arguments. It is also too early to tell how the unemployment referees will handle these decisions when faced with such issues in the UC hearing room.
Now, more than ever, having a lawyer on your side is important, if not essential, to the successful prosecution or defense of unemployment compensation claims in Pennsylvania. If you find yourself making a claim for unemployment, or if your company is required to defend an employee’s claim, you should consult with the attorneys at Wolf, Baldwin & Associates, P.C., before the Commonwealth Court’s recent curveball causes you to lose the game.
The administrative law lawyers at Wolf, Baldwin & Associates, P.C. represent both employers and employees in Pennsylvania Unemployment Compensation cases, from the initial hearing before the referee through all levels of appeals. Please click here to contact us today.
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