A lawsuit against Alabama Labor Secretary Fitzgerald Washington over the handling of COVID-19 unemployment benefits is now being appealed to the Alabama Supreme Court after a lower court dismissed it in August.

Legal advocacy group Legal Services of Alabama filed a lawsuit against Washington and the Alabama Department of Labor (ADOL) in February on behalf of 26 Alabamians who said they faced hefty delays in the application process for unemployment benefits.

“[ADOL’s] failure to process applications for unemployment compensation benefits in a timely manner and their terminations without notice cause thousands of Alabama households to suffer,” read the initial complaint filed in the Circuit Court of Montgomery County. 

The complaint said that some plaintiffs waited over a year for ADOL to consider their applications for benefits or to receive information about the termination of benefits.

The complaint also claimed that some claimants waiting for hearings drew unemployment before their benefits terminated, only to receive an ADOL letter notifying them of overpayment immediately after sending in their termination letters.

“Many others received overpayment notices after receiving unfavorable decisions, and ADOL, at least in some situations, has counted all regular and pandemic benefits as overpayments even when the hearing officer only found claimants ineligible for or disqualified from receiving regular unemployment compensation benefits” the complaint continued.

In March, ADOL claimed it was working as efficiently as possible under a labor shortage and filed a motion to dismiss the lawsuit, according to reports. 

The U.S. Department of Labor instituted a process for states to forgive federal unemployment benefits that were overpaid during the pandemic.

According to AL.com, ADOL was considering applying for the waiver in September but was not sure if it could pinpoint where forgiveness would be justified.

In ADOL’s defense, the state of Alabama argued that Washington was protected by sovereign immunity, a legal doctrine that protects government officials from being convicted of certain civil or criminal offenses. 

Montgomery Couty Judge James Anderson dismissed the lawsuit in late August. 

As of September, ADOL identified almost 9,000 people who received overpayment notices in error, sometimes for amounts exceeding $1,000.

According to Alabama Policy Insistue’s Justin Bogie, this mismanagement is nothing new from the department. ADOL made an estimated $159.3 million in improper unemployment benefit payments from 2018 to 2021. 

“The reasons for the mistakes leading to overpayment vary,” Bogie wrote in a July editorial. “It could be something as innocent as an honest mistake by an applicant or their employer. It could be an error made by staff during claim review. In some cases, the reason is blatant fraud.”

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