Summary
In Bievenour, this Court held that "the objective of the classification which excludes parents of employers is rationally related to a legitimate state interest.... [T]he computation of benefits without a formal arrangement, combined with the great potential for fraudulent abuse, presents obvious problems."
Summary of this case from Prince v. Unemployment Compensation Bd.Opinion
Argued December 8, 1978
May 17, 1979.
Unemployment compensation — Employment — Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897 — Parents of employer — Children of employer — Constitutionality — Age discrimination — Reasonable classification — Constitution of the United States, Fourteenth Amendment — Equal protection.
1. Provisions of the Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897, which exclude from the definition of employment and thus from eligibility for benefits parents of an employer, while including children over eighteen of employers, are not violative of equal protection principles of the Fourteenth Amendment to the Constitution of the United States. [617-18]
2. Entitlement to unemployment compensation benefits is not a fundamental right such that classification of recipients by age would constitute a suspect classification, and the exclusion from coverage of parents of an employer is a classification which is reasonable and rationally related to a legitimate state interest, recognizing that the statutory purpose involved is to provide temporary assistance to relieve economic hardship occasioned by sudden unemployment not to establish a welfare program for the elderly fraught with the potential for fraudulent abuse, difficulty of benefits computation and higher cost. [618-19]
Argued December 8, 1978, before Judges CRUMLISH, JR., BLATT and MacPHAIL, sitting as a panel of three.
Appeal, No. 1378 C.D. 1977, from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Lewis J. Bievenour, No. B-145757.
Application to the Bureau of Employment Security for unemployment compensation benefits. Application denied. Applicant appealed to the Unemployment Compensation Board of Review. Denial affirmed. Applicant appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Rajeshwar Kumar, for petitioner.
Michael D. Klein, Assistant Attorney General, with him James K. Bradley, Assistant Attorney General, Daniel R. Schuckers, Assistant Attorney General, and Gerald Gornish, Acting Attorney General, for respondent.
The Unemployment Compensation Board of Review disallowed the appeal of Lewis J. Bievenour (Bievenour) from a referee's denial of benefits. He appeals to us. We affirm.
Is Section 4(1)(4)(5) of the Unemployment Compensation Law (Act) which provides that the word "employment" shall not include "service performed by an individual in the employ of his son, daughter, or spouse, and service performed by a child under the age of eighteen (18) in the employ of his father or mother" constitutional? Bievenour, last employed as a carpenter by a hardware store under the sole proprietorship of his son was declared ineligible for benefits by a referee who found he was not engaged in "covered" employment under the Act. He argues that the statute, by declaring him ineligible because he is the father of an employer whereas children of an employer 18 years or older are eligible, unconstitutionally discriminates against him on the basis of age in violation of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P. S. § 753 (1) (4) (5).
Bievenour's challenge confuses invidious discrimination of eligible persons or groups of persons for whatever reason with the establishment of eligibility requirements. The Act has specifically declared certain individuals to be ineligible for benefits and does not discriminate with respect to those persons or groups of persons who are eligible for benefits under the Act. Thus, the discrimination is not among individuals within a class eligible for benefits, but rather the discrimination occurs in classifying certain persons or groups of persons eligible for benefits and others ineligible. The latter category of discrimination between classes does not violate the Equal Protection Clause so long as the classification bears some rational relationship to a permissible object sought to be attained by the statute. See Massachusetts Board of Retirement v. Murgia, 427 U.S. 307 (1976).
The right to receive unemployment compensation benefits in Pennsylvania is a statutory right and, as such, has statutory provision limitations but, where a state law defines eligibility for statutory entitlement, that eligibility is subject to the protection of the Fourteenth Amendment and may "not be limited in any way that works an invidious discrimination or constitutes a denial of due process." Hammond v. Marx, 406 F. Supp. 853, 855 (D. Maine 1975).
Entitlement to unemployment compensation benefits, however, is not a fundamental right and classification by age does not constitute a suspect classification. Hammond v. Marx, supra. Thus, the age classification established by the statute is a valid one if it is grounded upon some reasonable basis; that the classification made by the state is not perfect or results in some inequality in practice does not offend the Constitution. Dandridge v. Williams, 397 U.S. 471 (1970).
We hold that the objective of the classification which excludes parents of employers is rationally related to a legitimate state interest. One need only to give a cursory look at the factual posture of this case and its consequences to see that it makes good sense. Bievenour is 69 years old and has worked sporadically at odd jobs part time for his son whenever the son "had money to go ahead on a project." Thus, the computation of benefits without a formal arrangement, combined with the great potential for fraudulent abuse, presents obvious problems. The varying number of weekly working hours and pay scale differences in many job positions makes benefit computation difficult if not impossible. The acknowledged purpose of the Act is to provide temporary assistance to relieve economic hardship of sudden unemployment, see Unemployment Compensation Board of Review v. Molitoris, 24 Pa. Commw. 360, 356 A.2d 863 (1970), and is not and can never be a social welfare program for the elderly.
It cannot be persuasively argued that a compensation program encompassing parents of employers would not be more costly than the existing program and thus would inevitably require state subsidy, a higher rate of employer contribution, a lower current benefit scale, or a combination of them. We perceive nothing in the Constitution which requires a state to subordinate or compromise its legitimate interests solely for the purpose of expanding unemployment assistance programs.
A state has a legitimate interest in maintaining a self-supporting compensation program. Similarly, it does have a significant, if not cardinal concern, for the distribution of available resources in such a way as to maintain benefit payments at an adequate coverage level whereas coverage of a wider class of unemployed persons inadequately is obviously undesirable. Bievenour's sole argument in support of his appeal is not a valid one.
Accordingly, we
ORDER
AND NOW, this 17th day of May, 1979, the order of the Unemployment Compensation Board of Review, Decision No. B-145757, dated May 26, 1977, is hereby affirmed.