Here is the back story:
My wife's company does not fall under the FMLA law (13 employees).
Prior giving birth they asked her to let them know what her plans were for after her maternity leave. She documented them and then met with the owner of the company. He told her that the business was growing rapidly and he could not keep her job open for the six weeks of maternity leave that she would be out. She was open to any form of employement - PT or FT once the six weeks were over.
Essentially she was told that she would not have a job in six weeks - so we consulted PA Unemployment Office and then told her to file her claim once the disability period was over. She was approved (determination letter received).
Now we receive a call from the Unemployment office stating that the owner of the company is fighting the claim because he said that my wife decided not to come back.

Do we have any grounds to fight/appeal this if indeed she is denied now that the owner is "spinning" the truth. Are we now in a "he said - she said" scenario?

You always have the right of appeal. But so does the employer.

All she can do is present her case. The state will determine which is the more creditable.