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Jobless workers in Maryland wage another legal battle over unemployment benefits

Litigation calls on officials to fix the state’s unemployment system and provide redress to those affected by its problems

Labor organizer Roxie Herbekian speaks to a crowd in Baltimore in June. (Robb Hill for The Washington Post)

Matthew Bosley made hundreds of unanswered calls to Maryland unemployment after he lost his job as a manager at a staffing company at the start of the pandemic. Most of the time the line was busy. Other times he sat on hold — for hours.

Like tens of thousands of other jobless workers, he wanted to find out why his benefits were delayed. Two months after filing and having to dip into his savings, Bosley received some money; but then about a year later, he was told that he had been overpaid and owed tens of thousands of dollars to the state.

He tried contacting the state Department of Labor with little success. Then he filed suit, joining a growing list of at least a dozen federal cases across the country seeking redress after the red tape and tumult that left millions of jobless Americans in an anxiety-ridden waiting game. Lawyers in case filings argue that Maryland’s delays in issuing benefits violate federal law and the U.S. Constitution.

At the core of the legal challenge is the requirement under the federal-state unemployment system, established by Congress during the Great Depression, to provide prompt payments as “administratively feasible” to jobless workers. During the pandemic, Maryland and other states across the country were deluged with claims (in the first three months of the pandemic, Maryland received as many claims as it did in all of 2019). Its antiquated system could not handle the surge, and its updated portal repeatedly malfunctioned.

The delays led to rallies and legislative hearings where hundreds of people struggling to make ends meet pleaded for help.

Bosley is one of six named plaintiffs in a class-action lawsuit filed in U.S. district court last month against Maryland Labor Secretary Tiffany Robinson over a slew of problems unemployed workers had over the past two years — from delayed payments to unexplained overpayment notices and discontinued benefits.

David Rodwin, an attorney with the Public Justice Center, which is representing the plaintiffs, said the plaintiffs want the department to fix its system by ensuring that unemployment benefits are paid within 21 days of an applicant’s filing; suspended benefits are restored within two business days; and if benefits are placed on hold for more than 14 days, the applicant is given a written explanation.

“For tens of thousands of Marylanders, the system has failed completely: either their claims for benefits have languished for months or their benefits have been suddenly cut off for similar periods without notice or explanation,” the lawsuit reads.

The state has added staff to its call centers and expanded operating hours. But state officials have said that Maryland’s law hampers efforts for an applicant to get a faster response because it is one of four “mitigation” states that require adjudicators to determine if there are factors that led to a denied claim.

A spokesman for the state Department of Labor said the department has no comment on the ongoing case.

The plaintiffs, who live in Baltimore City and Prince George’s, Montgomery and Anne Arundel counties, represent three classes affected by the troubled system over the past three years. They are: those whose benefits were delayed, those whose benefits were discontinued without “an appealable determination,” and those who were told they received overpayments and weren’t given any explanation about the alleged overpayments or information on how they could appeal the decisions.

Bosley, who initially contacted the agency about his delayed payment, learned a year later that he allegedly owed $36,854.40 to the state in an overpayment and interest fees.

“It’s like a cloud over my head,” said Bosley, 24, who said he worked through college and graduated from Salisbury University with no student debt.

The suit claims that tens of thousands of jobless workers received overpayment notices without an opportunity to contest them, which lawyers say is a violation of their statutory rights and constitutional right to due process of law.

It also claims that many Maryland residents who needed benefits never received them and that others got financial help that ended without explanation.

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The plaintiffs are asking the court to block the state from sending overpayment notices and to suspend the collection of allegedly overpaid benefits, including by intercepting tax refunds and reducing ongoing benefits.

“Unemployment insurance is a critical safety net for workers, enabling them to buy food and pay rent, and tiding them over until their next job. The system must work for people, not against them,” said attorney Tyra Robinson, also with the Public Justice Center. “Marylanders cannot afford for the unemployment insurance system to utterly fail. We’re suing to fix the system.”

Rodwin said both parties have agreed to mediation, which is expected to run through early January. He said many jobless workers are still caught in red tape.

According to court documents, Robinson says the state has already taken “substantial steps” to deal with the problems that plagued the system during the health crisis and the “dramatic increases in unemployment applications and dramatic increase in unemployment fraud.” Still, she said, she is interested in additional improvements. She rejects the notion that a class action is warranted or that the defendants can prove irreparable injury.

The lawsuit isn’t the first filed by the Public Justice Center, an advocacy group that promotes anti-poverty and racial equity, over unemployment benefits.

Earlier this year, the center was one of two organizations representing unemployed workers that was successful in challenging Gov. Larry Hogan’s (R) decision to terminate enhanced federal benefits early.

In July, a Baltimore Circuit Court judge blocked the move, ruling that the “personal magnitude of the harm” to unemployed workers outweighed the potential fiscal impact a preliminary injunction would have on the state. He also found that the plaintiffs showed a likelihood of succeeding on their claim that the Maryland labor secretary is bound under state unemployment law to accept federal benefits.

Hogan had planned to pull out of the federal program July 3, about two months before it was set to expire. He argued that the state’s economic recovery depended on unemployed workers returning to the workforce and that the extra benefits were keeping them from going back to work.

Maryland was one of about 25 Republican-led states where the governor moved to end the benefits before the Sept. 6 deadline that was imposed by the Biden administration.

Bosley said recently that he received a call back from the state Labor Department about a month ago. Officials there said he can apply for a waiver of the overpayment, something that he said he had not been told before the lawsuit.

He said he is concerned about others who might be in a similar situation.

“It shouldn’t take a federal lawsuit to receive a phone call from the Maryland Department of Labor,” he said.