Alabama's Unemployment Backlog Goes to U.S. Supreme Court This Fall

This fall, the U.S. Supreme Court will address Alabama’s contentious handling of unemployment claims during the COVID-19 pandemic. The court has scheduled oral arguments for Monday, October 7.

The plaintiffs, a group of Alabamians, argue they faced excessive delays in receiving unemployment benefits. They filed a petition for certiorari, highlighting the long waits for compensation they believe they are owed.

In 2022, a group of Alabama residents sued in state court, claiming wrongful denial of unemployment benefits and lack of appeal opportunities during the pandemic. Governor Kay Ivey called the backlog of cases "outrageous" in 2022.

The lawsuit asserts that the system's delays were excessive. Some recipients received notices demanding repayment of thousands of dollars without any appeal options.

The Alabama Department of Labor has declined to comment due to ongoing litigation. In June 2023, the Alabama Supreme Court ruled in favor of the Labor Department and Secretary Fitzgerald Washington, stating that plaintiffs must exhaust all administrative appeals before filing a lawsuit.

The Labor Department argued that individuals should seek appeals, not bypass the process with collateral suits. By 2021, Alabama had the longest appeals delays in the country, averaging 566 days compared to some states resolving cases within 20 days.

Larry Gardella, attorney for Legal Services Alabama, criticized the system's inefficiency, questioning the logic behind waiting for a decision before challenging it.

The U.S. Supreme Court will now decide if states must adhere to a Reconstruction-era law protecting citizens' rights or if such claims should be handled solely in federal courts. Legal Services Alabama emphasized the importance of state courts in upholding federal rights.

In their Supreme Court filing, the Alabama Department of Labor cited the influx of claims between April 2020 and March 2022, noting the staff shortages that caused inevitable delays.

The state maintains that state courts have the discretion to decide when to intervene and that plaintiffs still have access to federal courts. They argue that allowing plaintiffs to bypass administrative judges and go directly to state courts offers little practical difference.

Gardella contends that state court access broadens options for addressing civil rights violations.

Aaron Johnson, a 68-year-old plaintiff, lost his job with the U.S. Census Bureau in 2020. He applied for unemployment in October 2020 but had not received a decision by January 2022 despite multiple follow-up attempts.

Another plaintiff, Christin Burnett, lost her job in 2019 and received unemployment benefits until 2020. She was unable to get assistance during the pandemic due to a data error with her social security number and her job loss occurring before COVID.

The Alabama Department of Labor acknowledged staffing shortages that slowed claim processing and stated efforts were underway to improve.

By March 2022, the department was handling appeals from December 2020. Thomas Daniel, director of Unemployment Compensation, noted that it was impossible to provide timely hearings due to the backlog.

Sixteen states have filed briefs supporting Alabama's right to dismiss the lawsuit. The U.S. Chamber of Commerce supports individuals' rights to sue in state courts without exhausting administrative processes, citing the high costs of federal court claims.