Brief Fact Summary. Members of a family corporation applied for unemployment compensation when they laid themselves off during times of poor business.
Synopsis of Rule of Law. Corporate form is ignorable when applicants for benefits can exert control over a corporation to fire themselves or hire themselves at will because they are considered self-employed.
This case is ruled by DePriest Unemployment Compensation Case in which this Court held that the corporate entity may be ignored in determining whether the claimants, in fact, were unemployed under the act, or were self-employed persons whose business merely proved to be unremunerative during the period for which the claim for benefits was made.
View Full Point of LawIssue. Is corporate form ignorable when applicants for benefits can exert control over a corporation to fire themselves or hire themselves at will because they are considered self-employed?
Held. (Montgomery, J.) Yes. Corporate form is ignorable when applicants for benefits can exert control over a corporation to fire themselves or hire themselves at will because they are considered self-employed. The Unemployment Compensation Act is not to benefit the self-employed. Previous case law has ruled that the corporate form may be ignored in cases like Roccograndi’s (P). The Board of Review’s decision is affirmed.
Discussion. To qualify for state benefits, the applicant must be within the class eligible for the benefits. The self-employed do not qualify. In closely held corporations, the courts have found that members retain too much control over their ability to hire or fire themselves and are actually self-employed. This is a public policy decision by legislature.