Punching In: Unemployed Amid Covid, Workers Fight Disaster Claim
By Robert Iafolla and Chris Marr, Bloomberg Law
The legal fight over pandemic jobless aid that states cut short last year could be headed in a new direction as unemployed Texans argue that the U.S. Labor Department owes back-pay benefits—potentially to a million or more people nationwide.
Texas was the largest of 20 states that stopped paying Pandemic Unemployment Assistance in June or July 2021, weeks before its congressionally scheduled Labor Day expiration date. PUA was designed to cover laid-off workers who didn’t qualify for traditional unemployment insurance such as part-time, low-wage, independent, and gig workers.
Many of the more than a dozen legal challenges to states’ decisions have fizzled out, but the Texas plaintiffs are attempting to bypass the states and get the money directly from Washington. They argue language in the Coronavirus Aid, Relief, and Economic Security Act, which created the benefit program in March 2020, requires the Labor Department to pay PUA benefits with or without the state agencies that traditionally process claims.
The plaintiffs seek class status for people from those 20 states who missed out on payments—setting up a possible logistical nightmare for the DOL to disburse those benefits without state involvement.
The CARES Act “was dealing with a national issue that called for a national response,” said Danny M. Rosenthal, an attorney at James & Hoffman P.C. in Washington who represents the Texas plaintiffs. Letting benefits end when states opted out “violated the clear mandate that the statute established.”
While six other states ended a separate $300 weekly pandemic jobless benefit, the lawsuit focuses only on PUA because plaintiffs argue the CARES Act specifically made it mandatory. The lawsuit echoes arguments that worker advocates and Sen. Bernie Sanders made in May 2021, writing that the DOL was legally obligated to pay PUA benefits.
Justice Department lawyers representing the government have moved to dismiss the case, arguing the plaintiffs failed to state a legally viable claim. The court could set a hearing date after motion briefing concludes in mid-April.
Nearly all of the original set of suits challenging early termination of PUA benefits were filed against Republican-led states. After early wins in Indiana and Maryland, the plaintiffs’ claims mostly failed, including losses in Florida and South Carolina.
Most recently, state supreme courts in Arkansas and Oklahoma reversed lower court decisions to restore jobless benefits, and a federal judge in Tennessee dismissed an unemployed workers’ case there. Suits against state officials are still pending at an Arizona appeals court and the Ohio Supreme Court.