Unemployment Surge Draws Lawyers To The Front Lines

By Emily Brill | August 16, 2020, 8:02 PM EDT

Unemployment agencies have struggled to handle a flood of new claims in the midst of the coronavirus pandemic, leading some attorneys to take new roles guiding clients through the process. (Jeff Kowalsky/AFP via Getty Images)

When Carlos MacArthur found himself facing three crises at once this spring, he thought he could take comfort in the fact that one lent itself to a relatively easy fix.

He wasn't sure what would happen with his leukemia diagnosis and marital troubles, which asked questions of his body and soul for which he didn't immediately have the answer. But he knew what would happen when he lost his job in the coronavirus pandemic: Like millions of other Americans facing the same situation, he'd collect unemployment benefits.

So, after his boss at the medical transport company laid him off, he applied. Then he waited. And waited. And waited.

Four weeks went by. The landlord for the apartment he'd lined up asked for a security deposit, but without a paycheck, he couldn't afford it. He started living in his car. Four more weeks passed. Finally, the first unemployment check came. He gave it all to the landlord. The landlord said he needed more. MacArthur said he'd have it the next week, when he got his second check. The next week arrived. The check did not.

"The next week came, and I didn't get anything. I thought, 'Wow, I gave [the landlord] all the money I have,'" MacArthur said. "That's when I started calling around and found an advocate."

MacArthur connected with Julia Rosner, an attorney with Manhattan Legal Services, who started making calls on his behalf. Not long after, he heard from the state unemployment agency: It would begin sending him the checks he was owed, which at that point totaled more than $10,000.

"If it hadn't been for Mr. MacArthur having an advocate, he probably still wouldn't have gotten what he was owed," Rosner said.

The U.S. unemployment system was not designed to involve lawyers. Formed in 1935, after the Great Depression underscored the impact of mass job losses during a global crisis, the system was supposed to be straightforward: You lose your job, you apply for unemployment, you get a check. Lawyers sometimes get involved when employers step in to argue workers aren't eligible for unemployment, but that's traditionally the extent of their involvement.

During the early months of the coronavirus pandemic, that changed. As millions of people applied for unemployment, and understaffed state agencies with outdated infrastructure couldn't keep up with the demand, more and more people turned to lawyers for help as benefit delays stretched from weeks to months.

"You shouldn't need a lawyer to get UI benefits," said John Tirpak, the director of the Unemployment Law Project in Washington state. "You shouldn't need somebody to decipher an incomprehensible notice or know how to work with a difficult website to get basic unemployment benefits — these are for working people, people of all classes and income levels, people from different backgrounds, and it should be accessible."

Instead, the system is often the opposite of that, lawyers who've helped people receive unemployment in three states tell Law360. Over the past several months, they've watched their clients face language barriers and busy signals, broken websites and bewildering paperwork, while reckoning with a Kafkaesque bureaucracy that, for many, determines their ability to eat.

And, like their clients, they're frustrated.

Doing What They Can

Jennifer Lord, a Michigan employment attorney who works as a partner at Pitt McGehee Palmer Bonanni & Rivers PC, is used to helping people navigate employment issues: wrongful firings, Family and Medical Leave Act violations, on-the-job discrimination.

She knows what to say to those clients, having handled those claims for more than 20 years. When it comes to her newest clients — Michigan residents seeking unemployment benefits — she finds herself searching for the right words.

"With employment discrimination, I can say, 'Here's the plan: I'll either help you or I can't help you.' But in this situation, there are so many unknowns," Lord said. "That's been really painful, because people are just suffering, and it's heartbreaking."

One of those unknowns came barreling into Michigan — and many other states — in May: Dubious claims began pouring into unemployment agencies, and soon, bureaucrats suspected they were facing an organized fraud ring.

As a result, states put benefit applications on hold or stopped sending out checks. A Detroit television station reported in June that the state locked 350,000 Michiganders' unemployment benefits while investigating the alleged scam.

Lord received call after call, fielding inquiries from people who'd lost their benefits or never gotten them in the first place. As she did what she could to help — placing calls, helping people navigate the agency's website — she wondered why the system couldn't handle this influx of applicants. Shouldn't it have been designed for that?

"It would only make sense to design these social safety nets to handle the worst-case scenario," Lord said. "They're not even designed to weather a minor blip, let alone a major blip like the one we're seeing now."

Tirpak received a similar deluge of calls at the Unemployment Law Project, a nonprofit founded to assist Washingtonians denied unemployment that now, due to the pandemic, is helping a new group: people who applied but never heard back.

This spring, the nonprofit went from receiving between 20 and 50 calls per day to receiving several hundred, mostly from people dealing with "access issues," Tirpak said.

"People are calling the unemployment agency hundreds of times and can't make contact," Tirpak said. "And if they don't understand your language, they'll hang up on you rather than getting an interpreter. We've heard many, many reports of that."

Attorneys' attempts to resolve the unemployment delay crisis have involved both individual and systemic work, they say. On a person-to-person basis, they help people decipher confusing paperwork and navigate unemployment websites, and they reach out to the agency on clients' behalf in emergency situations, like MacArthur's. Since Rosner intervened in MacArthur's case, he began receiving unemployment checks, Rosner and MacArthur said.

On a larger level, these attorneys also work behind the scenes to try to affect policy changes.

They've spoken out about the extent of the problem, encouraged their clients to write to politicians and pushed for changes in conversations with unemployment agency officials, they said. Tirpak's organization asked the Washington Supreme Court in June to compel the state's unemployment agency to "promptly process claims," he said. The court has not yet ruled on the writ of mandamus.

On Aug. 6, Suzi LeVine, commissioner of the state's Employment Security Department, touted progress in clearing a backlog covering more than 81,500 people who applied for benefits in mid-June but had not received payments.

Still, she acknowledged in a statement that "we know we still have a lot more work to do and a lot of trust to be regained as we move into the next phase of our response."

"Getting benefits to all eligible Washingtonians has been, and continues to be, our agency's top priority," LeVine said at the time.

According to ESD data posted last week, 1,295,080 individuals in the state have filed for unemployment benefits since March 7.

Attorneys are doing what they can, but there's only so much they can do when faced with a bureaucracy straining at the seams, they said. State unemployment agencies, funded by the federal government, are often understaffed, and, almost across the board, working with outdated infrastructure, attorneys say. Rosner cited this "old, old computer system" as one of the primary issues causing benefit delays.

'Old, Old Computer System'

The information technology system at most unemployment agencies was put in place in the 1970s and 1980s, on "big mainframe computers" that use a now-outdated programming language called COBOL, said Stephen Wandner, a senior fellow at the National Academy of Social Insurance who used to work for the federal unemployment agency.

"If you want to make any changes to the UI system at the state level, it's very hard to do, because the systems are very old, there are very few programmers who know these languages anymore, and modern IT is a lot more efficient than these old systems," Wandner said.

The primary barrier to modernizing IT systems, Wandner said, is that state agencies don't have the money to do it. And that ties back to "a very boring topic that has very recently become interesting: the administrative financing of UI," said Stephen Woodbury, an economist at W.E. Upjohn Institute for Employment Research and Michigan State professor.

"The federal government basically writes the check to the states for the states to run their programs," Woodbury said. "For reasons that are hard to understand, the states and the federal government have never been able to figure out a formula that works or a set of incentives to give the states so they set up an efficient method for administering the system."

New York, which processed 4.1 million unemployment claims during the first three months of the pandemic, was supposed to modernize its system in the 1990s, Rosner said. Because it didn't, her clients — like MacArthur — are left dealing with the consequences, she said.

"A state the size of New York that hasn't modernized its UI system is very open to running into problems when there's a pressing need for UI," Rosner said.

A representative for New York's labor department, Deanna Cohen, said that the state's unemployment agency has recently put work into modernizing its system, "including building a new unemployment application with Google [and] upgrading our phone system." 

"Thanks to this work, we have now paid almost $40 billion in unemployment benefits to more than 3.3 million New Yorkers," Cohen said. 

Some states are considering using federal coronavirus relief funding to modernize their systems. New Jersey state lawmakers are weighing directing $50 million of that funding toward updating their unemployment agency's IT and hiring additional staff.

Attorneys and researchers say if any situation has demonstrated the need for investment in unemployment systems, it's been the coronavirus pandemic.

"What's happened the past three to four months seems tailor-made for a good IT system," Woodbury said. "If Amazon can take billions of orders, why can't the states take millions of UI claims and process them online?"

Have a story idea for Access to Justice? Reach us at accesstojustice@law360.com.

--Editing by Katherine Rautenberg.

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