If the tens of thousands of Washingtonians waiting weeks or months for unemployment checks ever do get paid, some small credit may be owed to an out-of-work construction superintendent named Hamal Strand.
On June 1, the 42-year-old Whatcom County resident sued the state for suspending benefits to him and nearly 200,000 other workers as part of efforts to halt a half-billion-dollar fraud scam disclosed in mid-May.
Strand is no attorney, but his internet-sourced legal theory — that the Employment Security Department (ESD) can’t just stop payments without letting workers appeal — isn’t so far-fetched.
On June 5, genuine attorneys made a similar point in a motion filed on behalf of workers in the state Supreme Court, where Strand’s case also waits. Similar arguments also appear in an earlier lawsuit, an amended version of which was filed Wednesday in Thurston County Superior Court.
Strand doesn’t claim to have started a legal rebellion against ESD. But he does think the lawsuits reflect a growing awareness that state officials “aren’t doing their jobs,” says Strand. “It’s coming to a head.”
The legal challenges come as ESD continues to struggle with two vast challenges — getting money to the unprecedented number of people left jobless by COVID-19 lockdowns while cleaning up an epic fraud scheme that targeted jobless benefits.
On the fraud front, ESD still hasn’t fully explained how the crime happened, but the agency seems to have stemmed the worst of the losses.
New weekly claims for unemployment benefits are down sharply since May — an indication, in part, that criminals are no longer filing tens of thousands of bogus claims, ESD officials say.
For the week ending June 20, the state received 29,612 “initial” claims for unemployment insurance, ESD reported Thursday. That’s up 2% over the prior week, but it’s around a fifth of the level in mid-May, when ESD says fraudulent activity peaked. (U.S. unemployment claims fell around 4%, to 1.5 million, for the week ending June 20, according to the U.S. Labor Department.)
The state has also recovered around $350 million of the estimated $550 million to $650 million that fraudsters stole, ESD Commissioner Suzi LeVine said Thursday.
But ESD is still behind in getting legitimate benefits to actual unemployed people. As of Thursday, nearly 72,000 individuals haven’t been paid for claims that were filed as far back as March due to issues that include potential fraud as well as other eligibility issues. (Most of the nearly 200,000 claims that were suspended in May over fraud concerns have been cleared, ESD officials say.)
ESD officials blame much of the delay on the unprecedented number of claims received during the pandemic. Fighting the fraud also means ESD must spend more time verifying each claimant’s identity. Even so, unpaid claimants represent less than 6% of all claimants, LeVine said Thursday.
Agency critics aren’t satisfied. They say ESD’s fraud crackdown is hurting tens of thousands of legitimate claimants.
They also argue that ESD is breaking the law.
One allegation is that LeVine lacked the authority to indefinitely halt payments, even in the midst of a fraud investigation, without giving claimants a chance to appeal.
U.S. Supreme Court decisions from the 1970s say that workers who are receiving benefits have a right to future benefits they’re eligible for — a right that can’t be taken away without “due process,” according to the June 5 suit, which was filed on behalf of the Seattle- and Spokane-based Unemployment Law Project and two workers.
And in 1988, Thurston County Superior Court permanently enjoined the ESD Commissioner, “[their] agents, employees, successors in office and all persons acting in concert or participation with any of them” from suspending unemployment benefits for individuals with ongoing claims “without adequate notice and an opportunity to be heard.”
Federal and state law may allow ESD to briefly suspend benefits over questions of fraud or other eligibility concerns, says Justin Abbasi, an attorney with the Seattle-based Sheridan Law Firm, which filed the June 5 case.
But the laws also require prompt payment within about 7 to 10 days of suspension unless the ESD determines that an individual claimant is ineligible and then gives the claimant an opportunity to challenge that decision, he says.
By suspending payments longer than 10 days, “Commissioner LeVine is likely acting without the authority of law,” says Abbasi, who notes that the case could go before the state Supreme Court by mid-July.
ESD has declined to comment on the two Supreme Court cases and did not respond to a request Thursday for comment on the Superior Court case.
ESD’s violations predate the fraud, critics say. Many workers whose claims have been ruled ineligible by ESD for other reasons and who want to appeal say the agency is refusing to forward those appeals to the state Office of Administrative Hearings, according to the Seattle-based Northwest Justice Project, which filed Wednesday’s amended complaint in Thurston County Superior Court.
ESD’s critics acknowledge that agency staff are struggling to review so many claims.
But they also say the agency hasn’t fixed technical problems that have made it hard for workers to file a claim or to communicate with ESD if their claim gets held up by the agency.
Bothell resident Raja Mawad, one of six plaintiffs in the Northwest Justice Project lawsuit, says that after ESD suspended his payments in mid-May as part of the anti-fraud crackdown, he uploaded the identity documents requested by the agency onto the agency’s website.
On Monday, Mawad spoke to an ESD representative by phone who said he could see Mawad’s documents in Mawad’s ESD account but couldn’t open them, according to the lawsuit. The following day, Mawad was told that his uploaded documents had disappeared from his ESD account and that he needed to upload them again.
Strand says such obstacles point to a broader problem: access.
Many workers with suspended or denied claims have no practical means to advocate for their case, he says. Calling the ESD helpline often means hours on hold. Emails and online messages go unanswered.
Some workers get a break by contacting state legislators, union representatives, or other influential persons who can prioritize or “elevate” their case at ESD, Strand and others say.
But not everyone who has waited weeks or months for payments knows how to get on “this magical list that can get you moved up,” says Strand.
“What are these people going to do?” Strand asks. “They [used to] go to work every day, and now they’re not getting a check and their kids are hungry.”
Strand admits he’s no longer in such dire straits himself. Days after he filed his petition, he says, an official with the state Attorney General’s Office, which serves as the ESD’s attorney, called to say that Strand’s payments issue had been resolved.
The official, Assistant Attorney General Jonathan Pitel, also suggested that Strand consider withdrawing his suit, Strand says. “Hopefully, we can resolve this before it goes to court,” Strand recalls Pitel saying.
The Attorney General’s Office did not respond to a request for comment.
Strand demurred. Although his benefits payments have indeed restarted, Strand says the legal battle now goes beyond his own fortunes.
“My petition will stand until everybody’s paid,” he says.