Vermont Legal Aid Files Class Action Lawsuit Against the Vermont Department of Labor Over Delays in Hearing Unemployment Benefit Appeals

UPDATE

FEBRUARY 17, 2022

Contacts: Kelli Kazmarski (kkazmarski@vtlegalaid.org)
Emily Kenyon (ekenyon@vtlegalaid.org)

Unemployment Insurance Lawsuit: Interim Agreement reached in Murphy et al v. VDOL

Relief should be coming soon for Vermonters experiencing emotional and financial stress caused by significant delays in first level appeal hearings at the Department of Labor. Vermont Legal Aid (VLA) and the Vermont Department of Labor (VDOL) have entered into an interim settlement agreement in the class action lawsuit filed in December 2021. The settlement agreement provides for a process to clear the backlog in unemployment appeals by May 1, 2022. The agreement also establishes benchmarks for progress and regularly reporting of VDOL data to VLA.  A link to the settlement agreement is here.

Vermont law requires VDOL to hold unemployment hearings within thirty days after someone files an appeal. However, nearly two years after the coronavirus pandemic hit the state, Vermonters were still waiting up to six months for their hearing. People don’t get unemployment benefits while their appeal is pending, so these continued delays were devastating for out-of-work Vermonters. For folks appealing wrongful overpayment notices, the stress of having thousands of dollars owed to VDOL, while waiting up to six months to have an appeal heard, was also overwhelming, sometimes seriously impacting mental health.

After months of trying to resolve these issues, VLA filed a class action lawsuit on December 1, 2021, on behalf of Vermonters who were still waiting as long as six months to have appeal hearings held. At a status conference held just after the case was filed, the parties were ordered to discuss a possible settlement as the appeal delay issues which were the subject of the lawsuit were of grave concern for the court and the people of Vermont.  In those discussions, it was quickly apparent that the Department was genuinely interested in resolving the appeal delay issue and understood the urgency of the issue for Vermonters suffering from ongoing delays.

The Department’s efforts to remedy the appeal delays, including making internal procedural changes and hiring more administrative law judges to hear appeals, have already made a difference. Recent data shows significant improvement in average wait times for claimants waiting to have appeal hearings. The Department anticipates continued improvement in the next few months with the changes it has already made. “We appreciate the hard work the Department has put into responding to the dire needs of unemployed Vermonters to have appeal hearings held quickly. Those hearings are often the key to unlocking critical benefits a household needs when someone has suddenly lost their income through no fault of their own,” explained Kelli Kazmarski, one of the attorneys from Vermont Legal Aid representing the Plaintiffs.

While the interim agreement is in effect, the litigation is on hold to allow the Department to continue to implement its plans to eliminate appeal delays. During that time, the Department will report its progress on a weekly basis to VLA and must use best efforts to attain certain benchmarks over the next few months. Either party may ask the court to intervene after good faith effort to resolve any problems or failures to comply with the agreement. Barring unforeseen events, the parties hope to reach final settlement in the lawsuit by this summer.

 

DECEMBER 1, 2021

Kelly Murphy et al v. Michael Harrington, Commissioner, and VT Dept. of Labor

On December 1, 2021, Vermont Legal Aid Inc. (VLA) filed a class action lawsuit in Washington Superior Court against the Vermont Department of Labor (VDOL) based on extensive delays in scheduling unemployment benefit appeals in violation of the law. The lawsuit requests an order from the Court to compel VDOL to come into compliance with the law.

Vermont law requires VDOL to hold unemployment hearings within thirty days after someone files an appeal. However, nearly two years after the coronavirus pandemic hit the state, VDOL is still failing to comply with this mandate. Instead, Vermonters must wait almost six months for their hearing. People don’t get unemployment benefits while their appeal is pending, so these continued delays are devastating for out-of-work Vermonters. There is no question that VDOL is completely out of compliance with the law.

“Many of our clients were wrongfully denied unemployment compensation, wrongfully terminated from their unemployment compensation, or wrongfully issued huge overpayment notices,” says Kelli Kazmarski, VLA attorney in the Poverty Law Project. “These delays are violating not only state law, but also Vermonters’ due process rights. People are waiting months and months without benefits just to be heard before these errors can be corrected. That’s simply unacceptable.”

VLA has been pushing the DOL to resolve this issue since at least January 2021. Over the summer of 2021, VDOL made assurances to advocates that it had a plan, and that it expected to make substantial progress in resolving the unlawful delay in appeal hearings by the end of September 2021. Yet, that still has not happened. In fact, the data shows that these delays in holding appeal hearings have continued. Over 600 unemployed Vermonters are waiting five or six months for their appeal hearing.

As plaintiff Joshua Webb explains, these delays have a considerable impact: “What the Department of Labor doesn’t seem to understand is that some promise of receiving any benefits I am due in the future does not pay my rent or other bills right now. Getting a lump sum of benefits I was owed six months after I appeal is not that helpful if I am already homeless by the time I receive the benefits!”

Read the Complaint.