The Maryland Board of Public Works on Wednesday approved a $300,000 payout to an advocacy organization and a law firm that spent months pressing for reform of the state’s unemployment insurance system.
The Public Justice Center, a non-profit public interest organization, filed suit against Maryland’s Labor secretary 13 months ago, in tandem with outside counsel. Their suit, Gorres et al v. Tiffany Robinson, was brought on behalf of six Marylanders who lost their jobs during the pandemic and faced challenges with the agency’s claims system.
The six faced a variety of hurdles, according to the court filing. Some waited months to begin receiving benefits, while others had their payments start, then stop. A third group was the subject of collections efforts, without due process, in cases where the agency believed it paid out more than a claimant was entitled to.
The named plaintiffs represented a tiny fraction of the residents who struggled with Maryland’s automated claims system, lawyers insisted. “There are thousands of other Marylanders in a similar limbo status — denied access to the benefits they desperately need and denied a determination of eligibility that would allow an appeal.”
The Board of Public Works, which is made up of the governor, comptroller and treasurer, approved the settlement with the Public Justice Center and the law firm Gallagher, Evelius, and Jones unanimously and with no discussion. The item was categorized as “general miscellaneous” on the board’s 240-page agenda.
The payout goes to the attorneys, not the named plaintiffs, according to Monisha Cherayil, an attorney with the center. That’s because the plaintiffs have had their claims issues resolved.
The settlement, she said, is reimbursement for the long hours that attorneys spent in direct negotiations with labor department officials — discussions that ended with concrete changes in agency “policy and practices.”
As part of the agreement, she said, the Department of Labor agrees to:
- Process the vast majority of new unemployment insurance claims within 21 days
- Appoint an ombudsman to give special attention to claims that go beyond 21 days
- Streamline the process for applying for benefits and proving eligibility, and to work with claimants who make small errors in their paperwork
- Suspend benefits for no more than two weeks when issues arise about a claimant’s eligibility
- Conduct a thorough investigation before seeking the return of overpayments and allow recipients to appeal any ruling by the agency
- Strengthen its BEACON claims system and provide jobless Marylanders an alternative — such as phone or mail communication
“We’re thrilled that the state wanted to sit down, shortly after we filed suit, to try to negotiate a resolution,” said Cherayil. “It obviously took hard work and a lot of time.” She said future benefits-seekers will find a system that is smoother and fairer than the one pandemic-era workers encountered.
The approval of the settlement followed by one day a legislative hearing at which Robinson offered a robust defense of her agency’s response to the 2020 spike in jobless benefits claims. She said her unwillingness to buckle to “political pressure” saved the state billions in fraudulent payouts.
In an interview on Wednesday, Sen. Clarence Lam (D-Howard), Senate chair of the Joint Audit and Evaluation Committee, said he was unaware of the agency’s discussions and eventual settlement with outside attorneys.
“It’s unfortunate that it takes a lawsuit for the department to actually do what they should have been doing to resolve these cases and make as many people whole as possible,” he said.
Robinson approved the $300,000 settlement in October but made no mention of it at Tuesday’s two-hour hearing. Lam called it “frustrating that the department was not more forthcoming with this lawsuit…”
“These are fundamental changes” in agency procedure, he added, “and to omit this important information in how the department is responding to the pandemic really calls into question the trust from the secretary.”
An agency spokesman did not immediately respond to requests for comment submitted via email and voice message. Last December, after the suit was filed, the spokesman called it “meritless” and said it would “only divert valuable taxpayer funds and resources from efforts to help our fellow citizens get back on their feet and into the workforce.”
Cherayil noted that the suit was filed more than a year after the initial spike in claims. “Over a year into the pandemic, we still had really significant problems with delayed benefits and interruptions and lack of process,” she said.
The filing noted that, as of last fall, Maryland ranked 44th among the states in determining basic eligibility for unemployment benefits in a timely fashion. While many states faced lawsuits similar to Gorres vs. Robinson, Cherayil said the settlement reached with the Maryland Department of Labor may be the “strongest” in the nation.
“We are very proud and confident that we were able to develop some solutions that we think will be really meaningful,” she said.