Another class-action lawsuit filed against Michigan unemployment agency

Another class action lawsuit was filed against Michigan's Unemployment Insurance Agency last week from several claimants who say they have not received all the benefits they were entitled to in the pandemic, if at all.

The claimants say their due process rights to receive notice and an opportunity to be heard before the agency halts benefits, their property rights to state and federal jobless benefits and their right to protest or appeal an agency decision before the UIA starts collection activities all have been violated.

"Thousands of unemployment insurance claimants have waited a year or years to be paid," the lawsuit, filed in the U.S. District Court for the Eastern District of Michigan, said. "Many have never been paid at all. Others who are just now recovering from financial hardship are facing unlawful seizure of wages and tax returns without any legal basis."

The claimants are asking the court to order the agency to take all actions necessary to ensure the prompt payment of jobless benefits and stop the agency from future violations of due process rights and remove all "stop payment" indicators unless and until protests and appeals can be considered.

This class action lawsuit follows another class action against the UIA, which said the agency acted outside its legal authority in pursuing collections more than a year after benefits were paid or for overpayments that were a result of agency error. A state judge said earlier in August that the agency must halt collection activities for claimants who were told they were overpaid benefits in the pandemic and then appealed that decision.

It's unclear if collection activities have been stopped. Nick Assendelft, a spokesperson for the agency, didn't immediately have an answer to that question Wednesday morning. Assendelft didn't have a direct response to the lawsuit, but instead brought up a recent $6.8 million equity grant the agency received from the U.S. Department of Labor, which will provide resources and facilitate initiatives that will ensure that workers in underserved Michigan communities will be able to access jobless benefits.

"The U.S. DOL grant builds on the many reforms UIA Director Julia Dale has implemented to improve customer service, including reassigning staff and resources to address the agency's case backlog," he said.

The plaintiffs in this most recent lawsuit all filed for benefits in the pandemic. Paul Kreps, a self-employed pest control technician, was determined eligible for the federal Pandemic Unemployment Assistance benefits. More than two years later, he has yet to receive those benefits. His case was marked "closed" in March 2021, although he said he is owed $25,000 in benefits.

Another plaintiff, Diana Boudrie, was furloughed from her job in April 2020. She applied for benefits and was approved, receiving them through August 2020. But in November 2020, she received a notice from the agency reversing her eligibility for unemployment benefits. Boudrie protested, but the agency didn't process her protest and a month later, she received a notice of collection demanding repayment of benefits paid and threatening garnishment if she did not make immediate monthly payments toward the benefits previously paid.

In March 2021, Boudrie received a collection notice demanding immediate repayment of the entire balance of $9,440 and threatening garnishment if she did not repay the entire balance immediately.

Contact Adrienne Roberts: [email protected].