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Lawsuit: Oregon Employment Department Publicly Downplayed Unemployment Backlog

The Oregon Employment Department's Unemployment Insurance online claim system, pictured on Friday, April 17, 2020.

Bryan M. Vance

The Oregon Employment Department's Unemployment Insurance online claim system, pictured on Friday, April 17, 2020.

Court documents suggest far more people are in a ‘type of adjudication’ than was previously acknowledged.

The Oregon Employment Department has vastly understated the number of unemployment claims stuck waiting for adjudication, according to a court filing from the Oregon Law Center. Adjudication is a legally required process for reviewing eligibility issues with claims. During the pandemic, that process has sometimes dragged on for half a year, leaving tens of thousands of Oregonians in limbo.

The court documents present a more dire picture than the agency has publicly acknowledged.

On Oct. 14, acting agency director David Gerstenfeld told reporters that about 48,000 people had claims requiring adjudication.

But in a declaration two days later, an agency official said the number of claims waiting for adjudication was twice that, at more than 96,000.

“As of October 15, 2020, there are approximately 96,212 unemployment claims in any type of adjudication,” wrote Lindsi Leahy, director of the Employment Department’s unemployment insurance division.

The new higher figure was included in court documents filed Friday afternoon. Attorneys with the Oregon Law Center filed a motion for summary judgment in a class action lawsuit against the agency. They asked for a court order compelling the Employment Department to pay or deny claims promptly.

“The consequences of delays this severe and persistent are catastrophic – homelessness, hunger, sickness, despair,” the motion states.

Leahy, the official who said 96,212 claims were awaiting adjudication, provided more detail in a video deposition on Oct. 20. She said the 48,000 people mentioned publicly were those with claims known to require “full-scale” adjudication. The tens of thousands of additional claims were on a so-called “suspense list.”

“The suspense list is different than the adjudication list because the suspense list tells us this is a potential issue,” she said, according to excerpts of her deposition transcript. “We don’t know if this is a quick issue to resolve or if it needs full adjudication.”

People with unemployment claims held in suspense are still waiting for the agency to pay them or deny their claim. The difference, Leahy said, is the agency hasn’t determined whether those claims require a simple clarification or what she called “full-bore adjudication.”

The agency hasn’t decided that, because it has yet to evaluate those tens of thousands of flagged claims, according to Leahy’s deposition.

“We haven’t made that determination yet, because we haven’t reviewed the case file,” Leahy said.

The Employment Department recently announced a push to resolve its adjudication backlog, an effort it’s calling “Focus Adjudication.” It is tracking progress on claims publicly described as needing adjudication as of the end of September. At his weekly press briefing Wednesday, Gerstenfeld said that number now stands at roughly 41,700 claims, down from the 48,000 cited in court documents.

Gerstenfeld has consistently recognized the immense challenge Oregonians face when their claims wind up in adjudication.

The department has hired new adjudicators – increasing their ranks from 80 to 300. But the court documents note that half of those adjudicators were still in training as of mid-October. In fact, Oregon Law Center lawyers argue adjudication has actually slowed during the pandemic, as the number of cases has skyrocketed.

“The state is making fewer written decisions per month than it was before the pandemic,” they wrote.

The motion for summary judgment seeks a court order compelling the Employment Department to pay or deny claims promptly. It includes a timetable for doing so.

Petitioners in the case want the judge to force the Oregon Employment Department to report denial rates as well, to ensure that people’s claims aren’t unduly denied in an effort to meet timeliness standards.

They also ask that the court retain supervision to monitor compliance.

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.