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Lawsuit alleges D.C. government denied or withheld unemployment benefits from workers without explanation

Unique Morris-Hughes, director of D.C's Department of Employment Services, talks about unemployment numbers in May 2020. (Toni L. Sandys/The Washington Post)
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Four D.C. workers who lost their jobs during the coronavirus pandemic and experienced gaps in unemployment benefits filed suit against the District on Wednesday, alleging the city failed to explain why their payments were withheld or denied as they faced financial distress.

The lawsuit, filed in U.S. District Court in Washington by the Legal Aid Society of the District of Columbia and the firm Alston & Bird, marks the latest indicator of public frustration with the city’s Department of Employment Services (DOES) — which over the past 22 months has faced a torrent of scrutiny from workers and lawmakers who cited insufficient communication and efficiency as the agency struggled to handle an unparalleled flood of new unemployment claims.

In addition to making up the missed payments, the complaint also asks the court to issue an injunction that would prevent D.C. from terminating, reducing or denying an unemployment claimant’s benefits in the future without providing a written rationale.

Mayor Muriel E. Bowser (D), the D.C. government and DOES Director Unique Morris-Hughes are named as defendants in the complaint. Spokespeople for Bowser and DOES did not return a request for comment on the suit.

As criticism of DOES mounted last spring, the D.C. inspector general announced plans to audit the employment agency’s ability to process claims. But Jaime Yarussi, deputy inspector general for business management, told The Post in December that the office had issues accessing some documents and data from DOES because of the pandemic, and that the timeline for completion will be delayed. Audits generally take 210 business days to complete.

DOES was also sued in October by a former employee who alleged it failed to pay him hundreds of hours in overtime.

The lawsuit filed Wednesday details the experiences of four workers who lost their jobs early in the pandemic and faced weeks of interruptions in benefits. In some cases, DOES’s online portal indicated the withheld payments were to offset an unspecified overpayment, according to the lawsuit. In others, no explanation was given at all.

Their stories align with complaints shared by scores of D.C. residents and workers in news reports, on social media and at council hearings over the course of the pandemic. Nicole Dooley, a supervising attorney at the D.C. Legal Aid Society, said the organization had interviewed at least 1,000 people seeking help with unemployment matters between March 2020 and December 2021. In contrast, Legal Aid interviewed just 25 people about the same issues in all of 2019.

“Generally there’s been a great deal of frustration from everyone who has called us. These four are representative of the lack of information people have received about their claims,” Dooley said. “Sometimes people can get information easily — but for many others, it takes months and months to track down where people’s benefits are.”

Stalled payments, conflicting answers: D.C. unemployment woes trigger investigation

The complaint argues that unemployment benefits are property rights protected by the Fifth Amendment, and that DOES obstructed the plaintiffs’ rights to appeal the decisions because the agency did not provide them with a written explanation, which is necessary to initiate an appeal at the Office of Administrative Hearings.

Mulugeta Hailu, a cabdriver who lost his job in May 2020, experienced an 11-week gap in benefits last year, according to the complaint, “undermining his ability to afford rent, fuel for his car, food for himself or support his children.”

Because he never received more than $5,000 in unemployment payments, Hailu was forced to exhaust his savings and borrow money from friends until his payments resumed. The suit alleges he never got a notification about why the benefits stopped in the first place. While the DOES online portal indicates he was ineligible for part of the period, and benefits were taken to offset an overpayment for the remainder of the time, Hailu says he never heard from DOES about an overpayment — or that his benefits were taken to offset them.

Another plaintiff, William Perry, was laid off from a construction job in June 2020 and filed for benefits shortly afterward, according to the complaint. He received a monetary determination in March 2021 that found him ineligible for benefits starting in February of that year — but DOES never sent a determination for the months before that, nor an explanation for why he did not get paid.

In all, Perry has gone 18 months without receiving payments despite following up with DOES more than 35 times, according to the complaint. At one point, it contends, Perry was told his claim was “lost in the system” because of computer problems.

“I had to ask to borrow money from my family members and friends to get by,” Perry said in a statement. “I feel like the D.C. government has jerked me around, and it weighs on me not knowing whether my unemployment claim will ever be resolved.

The filing comes as City Council member Elissa Silverman (I-At Large), whose Labor and Workforce Development Committee oversees DOES, announced Wednesday that 10,000 D.C. residents who waited more than 60 days for unemployment payments during the pandemic received one-time $500 payments between Christmas and New Year’s Eve, which she pushed for during budget negotiations last year.

“Delays in getting claimants their unemployment benefits were costly to many workers because they incurred more debt by using high-interest credit cards or borrowed money from loan services to make ends meet,” Silverman said in a statement. “We put this in the budget as a way to compensate claimants for the debt and aggravation.”