A Baltimore judge on Tuesday blocked Gov. Larry Hogan’s attempt to end enhanced federal unemployment benefits early for tens of thousands of jobless Marylanders.
The preliminary injunction, issued by Baltimore City Circuit Judge Lawrence Fletcher-Hill, comes in a pair of lawsuits filed by out-of-work state residents who challenged Hogan’s decision to opt out of the pandemic-related programs.
Fletcher-Hill ordered the Hogan administration to keep paying the expanded benefits at least until the lawsuits are resolved. The judge found that the court challenges against Hogan have a substantial chance of prevailing in court.
A spokesman for Hogan indicated that the Republican governor won’t challenge Fletcher-Hill’s decision since a continued court battle likely will last beyond early September, when the federal expanded unemployment programs are slated to end.
“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 Michael Ricci, Hogan’s spokesman.
Ricci said those in the Hogan administration “fundamentally disagree with today’s decision” and contend that keeping unemployment benefits in place “is hurting our small businesses, jeopardizing our economic recovery and will cause significant job loss.”
The U.S. Department of Labor informed Maryland last week that it would require at least 30 days notice before the Hogan administration could quit the programs, meaning that expanded federal unemployment benefits would continue for at least another month even if Hogan prevailed at trial or if an appeals court overturns Fletcher-Hill’s injunction.
The federal unemployment programs, created by Congress in response to the pandemic, provide an extra $300 per week for people receiving regular state unemployment, offer benefits to freelancers, gig workers and others who don’t regularly qualify for unemployment insurance and extend benefits for people who’ve hit the 26-week cap on benefits.
Ricci noted that more than half of the states “have already ended enhanced benefits, and the White House and the U.S. Department of Labor have affirmed that states have every right to do so.”
Robbie Leonard, one of the attorneys representing the unemployed workers, called the decision “a big win” for the approximately 175,000 people receiving unemployment benefits in Maryland — and for “the people who are still struggling to navigate Maryland’s unemployment system to get the benefits they’re entitled to.”
Leonard said the next legal battle will be trying to force the Maryland Department of Labor to resolve claims issues for thousands of out-of-work people he believes were falsely flagged for potential fraud and are now “stuck in limbo awaiting a determination about receiving unemployment benefits.”
In his decision, Fletcher-Hill ruled that the legal challenges to Hogan’s decision likely would win at trial because a clause in Maryland state law — strengthened earlier this year by Democrats in the General Assembly — appears to require the state to accept all federal unemployment aid.
State law, Fletcher-Hill wrote, “should be interpreted in this context to constrain administrative discretion and to require the Maryland Labor Secretary to maximize use of any available federal unemployment benefits.”
The judge also wrote that cutting off benefits early would inflict “significant personal hardship” and that the unemployed workers suing the Hogan administration “have been strained economically and emotionally by the pandemic.”
The “impact of the pandemic has been cruelly uneven,” Fletcher-Hill wrote.
The judge added that, “as one who has enjoyed the privilege of continuous, secure employment,” he was “particularly struck by the plight of those who have had to struggle with irregular or no employment.”
Kevin Baxter, one of the unemployed workers who brought the lawsuit, said the decision extending benefits into September would give him and others a bit of financial breathing room and “enough time for people to find a job. My coworkers aren’t going to worry about how they’re going to pay their bills.”
Baxter worked for 13 years at the Baltimore Convention Center hotel before being furloughed when the pandemic hit, but the hotel’s business hasn’t picked up enough to bring him back. Baxter said he’s applied to many jobs, including at hospitals and other hotels but hadn’t been able to find something yet.
Alex Dame, another furloughed hotel worker, called Hogan’s decision “unconscionable.” She said she’d relied on unemployment benefits and temporary part-time work to piece together a living over the last year.
“I know a lot of workers need this money. Even if it’s just for a few more weeks, it’s vital, it’s the difference between people being evicted or not,” said Dame, who joined Baxter at a press conference organized by UNITE HERE Local 7, a union that represents hospitality workers and backed one of the lawsuits.
Hogan had announced his plans June 1 to pull Maryland out of the federal programs, joining roughly two dozen other state governors — almost all, like Hogan, Republicans — in cutting off the federal pandemic unemployment aid early. But, just hours before Hogan’s move was set to take effect July 3, Fletcher-Hill issued a temporary restraining order keeping the expanded benefits in place.
Attorneys for Hogan unsuccessfully tried three times over the Independence Day holiday weekend to appeal Fletcher-Hill’s earlier temporary order.
The judge’s Tuesday morning decision extending his previous court order came just before the temporary restraining order was set to expire. Fletcher-Hill issued his decision after hearing hours of testimony Monday from state officials and arguments from lawyers for unemployed workers and the Hogan administration.
Hogan has said that the federal unemployment programs should be cut off in order to push people back to work and blamed the benefits for the struggles of some businesses to hire enough workers as the economy reopens.
Several Hogan administration officials, including state Labor Secretary Tiffany Robinson, testified on Monday that the governor also considered rising vaccination rates and what the Hogan administration has characterized as “extensive” fraud in unemployment claims while making his decision.
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Critics of Hogan’s move argue that there is little actual evidence that expanded federal benefits are causing a labor shortage in the state and that slow hiring is likely driven by other factors, including an uneven economic recovery and trouble finding childcare for working parents.
Michael Siers, an economist for the Maryland Department of Commerce, testified Monday that businesses in the state are experiencing a labor shortage and that the federal benefits are having at least some impact on people’s decisions to return to work.
But Siers, who said he was not involved in the Hogan administration’s decision to cut off benefits, also noted that other factors are at play and that some industries have been slow to rebound amid the ongoing pandemic.
Hogan administration officials testified Monday that the governor made the final decision to withdraw from the program and that the letter outlining the decision was drafted by John Kashuba, a former Republican congressional staffer and Trump administration official who now serves as the director of the Maryland Department of Labor’s Office of Fair Practices.
The lawsuits were organized by the Unemployed Workers Union, which is affiliated with Baltimore’s Peoples Power Assembly, and UNITE HERE Local 7, a union that represents hospitality workers. Several teams of attorneys are representing the out-of-work residents in the lawsuits, including lawyers from the nonprofit Public Justice Center and the firm of Gallagher Evelius & Jones in Baltimore, as well as Alec Summerfield of Baltimore and Robbie Leonard of Leonard & McCliggott Law Group.
Hogan is being represented by the high-powered private Venable law firm because Maryland Attorney General Brian Frosh, who typically would defend the state in court, roundly criticized Hogan’s decision to cut off benefits as “foolish.”
Frosh, a Democrat, refused to represent the Hogan administration in the case and instead hired the Venable firm. It’s not yet clear how much that legal representation is costing state taxpayers.