Dausch v. Unemployment Compensation Board of Review

In Dausch v. Unemployment Compensation Board of Review, 725 A.2d 230 (Pa. Cmwlth. 1999), the Court examined the second condition of the sideline activity exception and concluded that "mere preparations undertaken to expand a sideline business . . . do not constitute a substantial change in the sideline business." Id. at 232. There, the claimant was a licensed attorney and a certified public accountant. While employed by an accounting firm (employer), the "claimant also engaged in a sideline legal and accounting practice." Id. at 231. The employer laid the claimant off in May 1995, but he continued operating his sideline business while receiving unemployment compensation benefits, "which were to terminate on November 4, 1995." Id. Because the claimant's job search was unsuccessful, claimant leased office space, in October 1995, "in the hope of expanding his sideline business into a business that could support his family." Id. During the month of October, the "claimant painted the walls and shelving of the leased office space, refinished furniture and moved it into the office and installed a phone system. Claimant also arranged for advertisements of his business to appear in November issues of newspapers and magazines." Id. Claimant began to occupy the leased office on November 10, 1995. Id. The Court held that an increase in hours from thirty to sixty per week and from ten to forty-five per week, respectively, constituted a substantial change in activity in the claimants' sideline businesses. The Dausch court expanded its focus and did not only look at the hours worked prior to and after separation, but also examined the claimant's actions to determine whether they were preparatory in nature or whether services were actually performed. Dausch, 725 A.2d at 232. The Court held that because there was no evidence that the claimant worked from the leased office prior to his benefits being terminated, solicited business or advertised for business prior to his termination, or performed services for clients prior to the time that his benefits were terminated, "the claimant's sideline business activity did not substantially change after his separation from employer." Id.