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Lawsuit Alleges 'Catastrophic Consequences' From Oregon Unemployment Delays

The Multnomah County Courthouse is pictured Saturday, May 25, 2019, in downtown Portland, Ore
The Multnomah County Courthouse is pictured Saturday, May 25, 2019, in downtown Portland, Ore.

The lawsuit seeks a court order compelling the Oregon Employment Department to decide unemployment claims within 4 weeks

UPDATE (4:33 p.m. PT) - The Oregon Employment Department is facing a lawsuit this week for allegedly violating state and federal law in its administration of unemployment benefits during the coronavirus crisis.

The suit asks the Multnomah County Circuit Court to compel OED to approve or deny unemployment claims within four weeks of a person’s application.

Many thousands of Oregonians have experienced just the opposite: an agonizing purgatory.

“OED’s failures have forced an untold number of Oregonians to live without the critical financial safety net of unemployment benefit money for a staggering 15 weeks – with catastrophic consequences for Oregonians who were low-income even before losing their jobs,” the suit states.

The Oregon Law Center and Legal Aid Services of Oregon filed the petition on behalf of 13 people who have struggled to get benefits.

Among them:

Florentina Flores de Vega, a seasonal agricultural worker who speaks Mixteco Alto and Spanish. The suit alleges her access to benefits was “wholly blocked” by the inaccessibility of Oregon’s unemployment insurance system to people who don’t speak English.

David Haines, a former Lyft driver and single father. He applied for regular unemployment benefits in April, then Pandemic Unemployment Assistance benefits in May. After thousands of attempts to call OED, he learned his claim would be sent to the agency’s tax department. The suit says he has heard nothing since June 2.

Htoo Ler Paw, a refugee from Myanmar who was laid off from her cleaning job in March. The suit alleges OED requested a copy of her permanent residency document, or green card, five times, and it was sent  five times, but the agency failed to deliver benefits. Paw waited on hold for hours to request phone interpretation, but never got it.

Two other petitioners, whom OPB is not naming, are described as survivors of domestic violence. They called OED seeking help again and again. One became so impoverished that she could not afford incontinence supplies for her disabled child, according to the suit.

In a written statement, OED officials said they were "aware of the lawsuit" but they "do not generally comment on pending litigation." Instead, department officials acknowledged that delays were "frustrating" to "more than 243,000 Oregonians who have lost their jobs as a result of the pandemic." The department pointed to several steps it's taken, including the hiring of staff to take calls, establishing a new call center, as well as a launching a new web site and phone number aimed at helping claimants. But officials conceded in the statement, "we have a lot more work to do."

Gerstenfeld assumed leadership of the beleaguered agency in May, following the ouster of his boss, director Kay Erickson. Erickson could not survive blistering criticism of the agency’s inability to deliver benefits to hundreds of thousands of Oregonians in a timely manner. U.S. Senator Ron Wyden, D-Oregon, was among those calling for Erickson’s departure, labeling the department’s problems a “litany of incompetence and unresponsiveness.”

Gerstenfeld has sought to increase communication with claimants, journalists and lawmakers. He has also provided a sobering assessment of the wait still to come. At his weekly press briefing, before the department received the suit, Gerstenfeld warned that tens of thousands of people whose PUA claims have not yet been processed should not expect payment for at least another month. Many have been waiting since March.  

The lawsuit outlines OED’s scramble to address an unemployment crisis of historic proportions. The agency has received more than 600,000 claims since the pandemic hit and has been hampered by outdated technology and a mandate to quickly implement new federal programs.

The suit argues the agency has violated state law by failing to promptly approve or deny unemployment claims.

One common lag occurs when a claim is sent into the agency’s adjudication process, which Gerstenfeld said this week can cause delays of 12 to 14 weeks.

At a time of dire need, the suit states, “the current delays facing Oregonians who have applied for traditional UI, PUA, and PEUC are patently unreasonable.”

The suit also alleges the employment department intentionally discriminated against non-English speakers by failing to provide an online application for regular unemployment benefits in a language other than English.

“That decision was made despite OED having had ample resources to correct the problem since at least 2009,” the lawsuit states.

The employment department did not launch a designated language hotline until this week. When its regular phone lines became hopelessly jammed, as OPB reported in May, many people with limited English were left in the lurch – unable to access interpreters by phone and unable to apply online, even in Spanish.

The petitioners want the court to order the employment department to make multiple changes, including:

Approving or denying unemployment claims no later than four weeks from the date of application, including any time spent in adjudication or tax department review;

Automatically treating any denied regular unemployment claim as a PUA application and processing it promptly;

Creating a Spanish-language online application for regular unemployment claims; and

Deciding pending applications based on when a person first filed for any type of unemployment assistance, so those waiting longest can get help soonest.

No hearings have been scheduled yet in the matter.

Copyright 2020 Oregon Public Broadcasting

Kate Davidson is OPB’s business and economics reporter. Before moving to Oregon, she was a regular contributor to "Marketplace", a reporter at Michigan Radio focused on economic change in the industrial Midwest and a producer at NPR.