10/25/2005
CONTACT: Melissa Sharp, (202) 554-9000
NFIB Files Brief in Pennsylvania Supreme Court Arguing Small-Business Owners Deserve Equal Treatment in Unemployment Compensation Proceedings
Harrisburg, Pa. — The National Federation of Independent Business’s Legal Foundation filed a brief with the Pennsylvania Supreme Court yesterday urging the court to reverse a Commonwealth Court decision that effectively changes how employers can defend themselves from unemployment compensation claims. The lower court ruled that employers must hire an attorney in unemployment compensation claim proceedings, while claimants may use non-attorney representatives.
NFIB’s Legal Foundation joined the Pennsylvania Chamber and the Society for Human Resource Management in the brief urging the Pennsylvania Supreme Court to overturn the lower court’s decision and allow both employers and claimants to use non-attorney representatives in unemployment compensation claims cases. The brief argues that the lower court’s ruling places an undue burden on business owners and is simply unfair.
“The reason unemployment compensation claims cases are heard by an administrative tribunal, rather than a court, is to keep the proceedings informal and inexpensive. Considering the relatively small amounts in dispute, there is no need for formal rules of evidence requiring an employer to be represented by attorney,” said Karen Harned executive director NFIB Legal Foundation. Harned also noted that “the decision raises a due process issue if one side is allowed third-party help and the other is not.”
Most states permit both workers and employers to be represented by non-attorneys at informal unemployment compensation hearings. Prohibition of non-attorney representatives will dramatically increase unemployment compensation costs for small businesses. According to a recently released NFIB Small-Business Poll, median legal expenses for small-business owners in 2004 were between $4,000 and $5,000.
“This may seem like an insignificant amount, but when you consider that the average salary for small-business owners is $50,000, it’s easy to understand why small-business owners might choose to settle an unfair unemployment compensation claim rather than hire an attorney to fight it,” said Harned.
Kevin Shivers, NFIB/Pennsylvania state director, predicted that a “‘lawyers only’ requirement will ‘shut-out’ many small firms from challenging an invalid UC claim.”
The case is, Harkness v. PA Unemployment Compensation Board of Review, Docket numbers 112 and 113 MAP 2005.
The NFIB Legal Foundation is a 501(c)(3) organization created to protect the rights of America's small-business owners by providing advisory material on legal issues and by ensuring that the voice of small business is heard in the nation's courts. The National Federation of Independent Business represents the consensus views of its 600,000 members in Washington, D.C., and all 50 state capitals.
