Unemployment Compensation; Ineligibility for Benefits due to Incarceration

Harmon v. UCBR, 163 A.3d 1057 (Pa. Cmwlth. 2017), allocatur granted Nov. 28, 2017, appeal docket 37 EAP 2017

Harmon was employed by Browns Shop Rite (Employer). During his employment, Harmon was sentenced to 30 consecutive weekends equaling 60 days confinement resulting from his conviction for driving with a suspended license. During this time, Employer terminated Harmon for reasons unrelated to his incarceration, and Harmon filed for unemployment benefits. The UC Service Center determined Harmon was ineligible for benefits for the period of Harmon’s incarceration. The Service Center also assessed a penalty of $438.75 and 17 penalty weeks for fault-based overpayments resulting from Harmon’s failure to report his incarceration when filing for benefits. Harmon appealed and a UC Referee conducted a hearing.

At the hearing, Harmon testified that he worked an average of 20 hours per week prior to his termination, and continued to work for Employer during the week during the period of his incarceration. Harmon further testified that he sought alternative employment after his termination, and did not knowingly withhold information when filing for benefits. A UC Claims Examiner testified that the UC Handbook informs claimants that they are not eligible for benefits for any week the claimant is incarcerated, and Harmon’s failure to report his incarceration justified the penalty assessment.

The Referee issued a decision, affirming the Service Center’s determination as to Claimant’s ineligibility for benefits under Section 402.6 of the UC Law, which provides: “An employe shall not be eligible for payment of unemployment compensation benefits for any weeks of unemployment during which the employe is incarcerated after a conviction.”  However, the Referee also found that Harmon did not intentionally withhold the information concerning his incarceration resulting in a modification of the portion of the Service Center’s award which assessed penalty weeks.

Harmon appealed to the UCBR, arguing that his weekend incarceration did not render him ineligible for benefits under Section 402.6 when his incarceration was not continuous, he was able and available to work during the week, and he did not intentionally withhold information regarding his incarceration. UCBR affirmed the Referee’s decision as to Harmon’s ineligibility for benefits under Section 402.6 of the Law and adopted the Referee’s findings of fact and conclusions of law; however, the UCBR modified the overpayment of benefits to a non-fault overpayment. Harmon appealed to the Commonwealth Court, and the Commonwealth Court affirmed, splitting 4-3.

The Commonwealth Court first addressed the plain language of Section 402.6 to determine whether Section 402.6 requires a Claimant be continuously incarcerated for the full week in order to be found ineligible for benefits.  Specifically, the court focused on the the definition of the word “during” in Section 402.6. Harmon argued that “during” as used in 402.6 imposes a “durational requirement” that a claimant is only ineligible for benefits for continuous incarceration throughout the entirety of the week;  UCBR contended that “during” may also mean “at some point,” and that therefore, UCBR’s determination was reasonable. Because the term “during” is not defined in the UC Law, the Court looked to the term’s common and approved usage, as required by the Statutory Construction Act, and referred to “during” ’s dictionary definition.  Merriam Webster’s Collegiate Dictionary’s alternative definitions, however, support both the claimant and the UCBR: (1) “throughout the duration of,” and (2) “at a point in the course of.” Accordingly, the court found the “during” language of Section 402.6 to be ambiguous, and rejected Harmon’s plain language argument.

Next, the court attempted to discern the intent of the General Assembly in drafting Section 402.6, first emphasizing deference given to UCBR’s interpretation:

One aid in construing statutory language is an administrative agency’s interpretation of the language of the statute it is charged with administering, which will be given deference unless the interpretation is clearly erroneous.” Summit Sch., Inc. v. Dep’t of Educ., 108 A.3d 192, 198 (Pa. Cmwlth. 2015). The Board’s interpretation, which relies on one of two equally reasonable definitions of the term “during,” is not clearly erroneous, and we address Claimant’s remaining arguments bearing in mind the deference to which the Board’s interpretation of Section 402.6 of the Law is entitled.

Harmon argued that the legislative history underlying the enactment of Section 402.6 shows the General Assembly’s intent was to preclude from benefits only those claimants who are granted work release, but remain incarcerated and live at the taxpayers’ expense throughout the entire week. In support of this argument, Harmon noted the Supreme Court of Pennsylvania’s decision in Chamberlain v. Unemployment Compensation Board of Review, 114 A.3d 385 (Pa. 2015). In that case, the Supreme Court explained that comments made prior to passage of an amendment to Section 402.6 demonstrated the General Assembly’s intent to change the law previously established by the Commonwealth Court’s decision in Greer v. Unemployment Compensation Board of Review, 392 A.2d 918 (Pa. Cmwlth. 1978), where the court concluded that an incarcerated claimant participating in a work release program was able to obtain unemployment compensation benefits under Section 402.6. However, the Chamberlain court could not find evidence that the General Assembly’s intent to supersede Greer extended to the disqualification of “claimants who were not incarcerated in a prison or an alternative institutional setting, but rather were sentenced to the less severe sanction of home confinement,” concluding that claimants under house arrest were not automatically ineligible for benefits under Section 402.6.

In rejecting Harmon’s application of Chamberlain, the court noted that ability to work during the week was not dispositive, as it recently explained in Gonzalez v. UCBR:

“the decision in Chamberlain makes clear that the applicability of Section 402.6 [of the Law] does not depend upon the claimant’s availability for work, but upon the meaning of the term incarceration, which it found to be ‘starkly different’ from home confinement.” [In Gonzalez w]e concluded that although the claimant was only incarcerated during the weekend, there was no question that he was “incarcerated” for the purposes of Section 402.6 of the Law, and, therefore, the claimant was ineligible for benefits.

Slip Op., at 11 (internal citations omitted).

The Commonwealth Court refused to impose a different result from that in Gonzalez, reasoning that because Harmon was confined, at least part of the week, in a correctional facility at the expense of taxpayers, Harmon’s situation more analogous to work release, “which the General Assembly clearly intended to preclude from receiving benefits when it enacted Section 402.6 of the Law.” Slip Op., at 12.

Finally, Harmon noted that Section 401(d)(1), which requires a claimant to be able and available for work to be eligible for benefits, has been interpreted to allow claimants who are only partially available for work to be eligible for benefits.  Therefore, in the interest of consistency with other UC Law sections, Harmon argued Section 402.6 should be construed to allow a claimant who is only incarcerated for part of the week to be eligible for benefits. The court disagreed, finding UCBR’s determination consistent because “the provisions concerning eligibility permit the Board to find a claimant eligible for benefits when the claimant is only partially available for work, and the provisions concerning ineligibility permit the Board to find a claimant ineligible for benefits when the claimant is incarcerated for only part of the week.” Slip Op., at 15.

Affirming UCBR’s order, the majority additionally noted there was no conflict with the UCBR’s determination and the policy of the UC law to provide benefits to “persons unemployed through no fault of their own,” concluding:

In short, the Board’s interpretation of Section 402.6 of the Law is not clearly erroneous, and it is entitled to deference. Claimant’s arguments in support of an alternative construction that would render an incarcerated individual ineligible for unemployment benefits only is he is incarcerated throughout the duration of the week (i.e., 24 hours/7 days per week) are not sufficiently compelling to override the deference afforded to the Board.

Slip Op., at 16.

President Judge Leavitt authored a dissent, joined by Judges Wojcik and Cosgrove. Judge Leavitt reasoned that the UCBR’s interpretation of the statute is not entitled to deference because the UCBR failed to address the central issue – the ambiguity inherent in the word “during”: “The Board did not address the meaning of the word ‘during.’ Rather, it focused solely on the word ‘incarcerated.’ Because the Board did not address the ambiguity in Section 402.6, it is impossible to give its holding any deference.” Slip Op., MHL-5.

Further, the dissent distinguished Harmon’s situation from a work release program:

Unlike the incarcerated inmate on work release, Claimant does not live at taxpayer expense. Other than his weekend meals from the government, he bears the burden of maintaining a place to live, securing transportation and providing for all the necessities of life. Claimant’s weekend incarceration may be his “fault,” but his unemployment is not.

Slip Op., at MHL-7.

The dissent construes Section 402.6 to mean that an employee is automatically disqualified only where he is incarcerated “throughout the duration of” the week, noting that a claimant may still be disqualified if incarceration affects the claimant’s availability for work pursuant to Section 401(d)(1) of the UC Law.

Authoring an additional, separate dissent to emphasize the rehabilitative purpose behind weekend sentencing, Judge Cosgrove opined:

Whatever the motivation behind the enactment of Section 402.6,3 it would be the epitome of illogic for the General Assembly to construct a mechanism for courts to fashion a rehabilitative remedy for transgressors with one statute, only to have that remedy eviscerated through exercise of another statute, particularly when the latter has only a “humane” and “remedial” purpose.

Slip Op., at JMC-3.

The Supreme Court granted allocatur to determine:

  1. Did the Commonwealth Court inappropriately expand the concept of administrative deference by evaluating the Board’s litigation posture for clear error, so that Commonwealth agency decisions will essentially become unreviewable?
  2. Did the Commonwealth Court misconstrue and misapply this Court’s holding in Chamberlain v. Unemployment Compensation Board of Review by applying it to disqualify anyone who is serving a sentence of incarceration?
  3. Does Section 402.6 of the Unemployment Compensation Law contain a durational requirement such that only claimants who are incarcerated for the entire claim week in question are disqualified?

For more information, contact Kevin McKeon or Dennis Whitaker.