Law Overturns Pennsylvania Court on Requiring Employers to Have Attorney Present at UC Proceedings

The Pennsylvania legislature and governor have taken steps to overturn a court decision that required that employer representatives at unemployment compensation proceedings be attorneys. The new law means employers no longer are required to be represented by legal counsel at unemployment compensation proceedings in Pennsylvania.

In February 2005, the Commonwealth Court of Pennsylvania issued a decision requiring that employer representatives at unemployment compensation proceedings must be attorneys. The court's decision in Harkness v. UCBR, held that employers may only be represented by an attorney at proceedings before the unemployment compensation authorities. Responding quickly to the uproar created by that decision, the Pennsylvania Senate introduced a measure to amend the unemployment compensation law to permit employers to be represented at unemployment proceedings by "counsel or other duly authorized agent."

That measure, SB 464, subsequently was amended to provide that "[a]ny party in any proceeding under this Act before the Department, a Referee or the Board may be represented by an attorney or other representative." The measure was quickly passed by the Pennsylvania House of Representatives and was signed by Governor Rendell on June 15, 2005.

While the new law means employers are no longer required to be represented by legal counsel at UC proceedings, employers should be aware that proceedings before the unemployment compensation referee are recorded and, in the event of an appeal, transcribed. While the decision of the unemployment compensation authorities is not binding on courts or other tribunals, the testimony and other evidence provided at an unemployment hearing may be used at subsequent proceedings, including proceedings before state and federal agencies and/or courts. For example, unguarded statements made by agents of the employer at an unemployment compensation proceeding may be used as evidence of discrimination or other alleged wrongdoing in a subsequent civil action. Conversely, admissions made by a claimant at an unemployment compensation proceeding may be used to undermine his or her claims in a subsequent proceeding.

In short, retaining counsel at an unemployment compensation proceeding may pay substantial dividends by limiting or eliminating altogether the potentially greater liability risk inherent in state or federal court litigation. Therefore, in situations where an employer believes that a charge of discrimination or other litigation has been or may be instituted by an unemployment compensation claimant, it generally will be in the employer's best interests to retain counsel to handle the unemployment compensation matter.