A Baltimore Circuit Court judge ruled Tuesday that hundreds of thousands of jobless workers in Maryland must continue to receive federal unemployment benefits, a major blow to Gov. Larry Hogan (R), who planned to pull the state out of the federal program.
In his ruling, Fletcher-Hill said 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.
A spokesman for Hogan said Tuesday that Hogan and state Labor Secretary Tiffany P. Robinson, who were the named defendants, “fundamentally disagree” with the judge’s ruling but do not plan to appeal. A trial probably would be scheduled in the fall, after the federal benefits end Sept. 6.
“While we firmly believe the law is on our side, actual adjudication of the case would extend beyond the end of the federal programs, forgoing the possibility of pursuing the matter further,” spokesman Michael Ricci said in a statement. “This lawsuit is hurting our small businesses, jeopardizing our economic recovery, and will cause significant job loss.”
Hogan announced in late May that Maryland would withdraw from the federal program, with the enhanced benefits to jobless workers ending July 3. 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.
The plaintiffs’ attorneys argued that their clients faced obstacles to returning to work and that the benefits offered a “lifeline” to cushion the blow of the pandemic.
“This is truly a David-and-Goliath victory,” said Roxie Herbekian, president of Unite Here Local 7, whose members were plaintiffs in one of the lawsuits organized by the Baltimore-based Public Justice Center. The other legal challenge was organized by the Maryland Unemployed Workers Union, which is led by the Peoples Power Assembly.
During the day-long hearing on Monday, Robinson testified that she was notified late Friday by the Biden administration that the state would have to give 30 days’ notice to stop the benefits. That means, even without the preliminary injunction, the benefits would have continued until mid-August.
At least 25 states led by Republican governors have decided to end the enhanced federal benefits.
The additional federal aid, which is $300 a week on top of state unemployment benefits, allows people who lost jobs in Maryland during the pandemic to apply for mixed earners unemployment compensation, pandemic emergency unemployment compensation and pandemic unemployment assistance, which helps gig workers and others who usually would not qualify for aid. Under Hogan’s order ending the enhanced federal aid, people collecting unemployment also would have to again prove that they are looking for work.
The state estimates that 250,000 people have qualified for the benefit in Maryland.
“I’m glad that we did win because a lot of Maryland unemployed people will not have to worry about how they are going to pay their rent, how they are going to pay their gas and electric, how they are going to pay all their necessary bills,” said Kevin Baxter, who was laid off from his job in the employee cafeteria at the Hilton Hotel in Baltimore. “This gives us enough time for people to find a job.”
Baxter said he has applied for positions at Johns Hopkins, the University of Maryland and Comcast. He blamed his inability to land a job on competition. He said he is either overqualified or underqualified for the positions.
The lawsuit in Maryland is among about a handful that have been filed across the country. Last month, a judge ordered a preliminary injunction in a case in Indiana. A Texas judge rejected a request for a temporary injunction in a similar case.
The judge’s ruling is the latest action in the legal challenge that was filed against Hogan and Robinson.
Fletcher-Hill imposed a temporary restraining order this month that allowed the unemployment benefits to continue until July 13.
Hogan’s lawyers appealed the judge’s ruling but lost in both the Maryland Court of Special Appeals and the Court of Appeals, the state’s highest court.
On Monday, Robinson was among four witnesses who were called to testify for the defense during the day-long virtual hearing. The plaintiffs did not call any witnesses.
The defendants argued that the extra federal aid is hurting the state’s economy and is keeping people from retuning to work.
Michael Siers, an economist with the state Department of Commerce, testified that Maryland had 200,000 job openings in March and that the rate of filling those jobs indicated that people were not returning to work. Siers also noted that there were numerous reasons people might not return, including fear of contracting the coronavirus and problems with accessing care for children who were attending school virtually.
Fletcher-Hill appeared to empathize with the plaintiffs.
“In its global scope and in the anxiety that almost all people experience over the threat of disease, the impact of the pandemic has been universal, but the brief stories of these Plaintiffs reminds the Court that the impact of the pandemic has been cruelly uneven,” he wrote.
Attorney General Brian E. Frosh, who supported the continuation of federal benefits, hired outside counsel to represent Hogan and Robinson. The state’s contract is with Venable LLC, a high-powered firm with offices in Baltimore. A spokeswoman for Frosh’s office said they have not received any invoices connected to the case.
Even though the state won’t appeal, the legal challenges are not over. Alec Sumerfield, who filed the class-action lawsuit for the Maryland Unemployed Workers Union, said he plans to file an amended complaint next week seeking back pay for workers who have had difficulty accessing benefits because of the state’s troubled filing system. “We’re continuing the fight,” he said, estimating that as many as 50,000 people could be affected.