Judge grants preliminary injunction preventing Gov. Hogan from ending federal unemployment benefits in Maryland

Work search requirements begin next week
Posted at 11:01 AM, Jul 13, 2021
and last updated 2021-07-13 18:12:16-04

BALTIMORE — A Baltimore City Circuit Court judge has granted a preliminary injunction keeping Governor Larry Hogan and Maryland Secretary of Labor Tiffany Robinson from terminating enhanced federal unemployment insurance programs in the state.

Last month, Governor Larry Hogan said the benefits would be discontinued on July 3, including an additional $300 a week through the Federal Pandemic Unemployment Compensation (FPUC), $100 Mixed Earner Unemployment Compensation program, and programs for jobless workers that wouldn't typically qualify for unemployment assistance.

The Unemployed Workers Union and Public Justice Center filed two separate lawsuits in state court to halt Hogan's plans.

Following a Monday court hearing, Judge Lawrence Fletcher-Hill found that Plaintiffs in both unemployment lawsuits have shown that claimants will suffer irreparable harm if this Preliminary Injunction is not issued and that it's in the public interest to continue these benefits.

Alec Summerfield, attorney for the Unemployed Workers Union, hailed the court's decision but said it was just one part of their lawsuit.

"It may make the difference whether a worker eats or not, or between paying a utility bill, car payment, mortgage or rent, "said Summerfield. "The second part revolves around the thousands of workers who have not seen a penny of their benefits, some for as long as a year, held up in the dysfunctional Labor Department's Unemployment Division."

As of July 6 -- the Maryland Department of Labor says 20,098 in and out-of state unemployment claims remain under review.

RELATED: Court hearing to determine fate of federal unemployment benefits in Maryland

In response to the ruling, Hogan's Director of Communications Michael Ricci, indicated the state would not appeal. Maryland's highest court turned away an appeal to a temporary restraining order issued by Fletcher-Hill last Saturday.

"While we firmly believe the law is on our side, actual adjudication of the case would extend beyond the end of the federal programs, foregoing the possibility of pursuing the matter further," said Ricci.

He added that next week, the state intends to implement work search requirements in order for applicants to qualify for the federal programs. Those rules had previously been waived under the COVID-19 state of emergency.

"With more jobs available than ever before, work search requirements for federal programs will go into effect next week. Claimants must search for work using the Maryland Workforce Exchange, which has over 250,000 jobs available across the state," said Ricci.

For the preliminary injunction to be granted, the Plaintiffs had to establish four factors including: the likelihood of success on the merits; the "balance of harms,” determined by weighing whether greater injury would be done to Defendants by granting an injunction than to Plaintiffs by denying one; that Plaintiffs will suffer irreparable harm unless an injunction is granted; and the public interest.

On the likelihood of success on the merits, the judge found that "The General Assembly has used strong language to require maximization of effort in relation to the federal government in providing unemployment relief for Maryland residents. The Maryland Secretary is bound by Maryland law, not federal law, to maximize those available benefits."

When balancing harms, the judge stated that Plaintiffs were able to show that they'd face significant personal hardship if their remaining unemployment benefits terminate now rather than on September 6, 2021 and the Court was particularly struck by the plight of those who have had to struggle with irregular or no employment.

However, Defendants were also able to show that the State will experience harm if a preliminary injunction is granted. Secretary Robinson estimated a shortfall of $60 million to the state after federal reimbursement for facilitating these federal programs.

"The Court was impressed by Secretary Robinson’s testimony to the magnitude and complexity of the effort required of her Department to administer these enhanced unemployment benefits," wrote Judge Fletcher-Hill.

Ultimately, he found the balance tips in favor of Plaintiffs and issuing a preliminary injunction.

Finally, the judge stated Plaintiffs clearly face the threat of irreparable harm if a preliminary injunction is not granted. And The Court concluded that the public interest supports issuance of a preliminary injunction.

"Some economic benefits may be delayed by continuation of enhanced benefits for two months. Any delay in such benefits, however, will be balanced by continuation of the economic stimulus produced by the benefits and by support for displaced workers transitioning
back into available jobs," Judge Fletcher-Hill wrote.

A final determination still needs to be made, however, the U.S. Department of Labor requires states to provide 30-day notice to opt-out of these programs. Seeing as these federal benefits expire on September 6, it's unlikely these benefits will cease before then.

Initially, the state asked that the cases be heard in federal court, but a U.S. District Judge agreed with the plaintiffs to have it remanded back to the state level.

Besides Robinson, multiple witnesses took the stand during Monday's hearing including Neil Bradley with the U.S. Chamber of Commerce.

He testified that it’s no longer prudent for the state to continue paying out $300 in weekly unemployment benefits.

Another witness was economist Michael Siers of the Maryland Department of Commerce.

He said the data shows "a disincentive to work" with unemployment programs still in effect.

"I would not say there’s a 1-to-1 link in the announcement that benefits are ending and job searches spiking," said Siers. "But data suggests and supports that ending enhanced benefits would lead to increase in job searches and applications submitted and increase in hiring."

That was similar to the Hogan administration's initial response to the lawsuit.

"Go anywhere in the state right now, and employers will tell you their top challenge is finding enough workers. In fact, there are more jobs available now than ever before," Ricci said on June 30.

Read the injunctions below.