Workers in more states sue governors over early end to unemployment benefits

Unemployed workers in Louisiana and South Carolina joined a growing movement challenging governors for ending federal unemployment programs early. Workers in eight other states have filed similar lawsuits, so far with mixed success.

In Louisiana, jobless residents claimed that Gov. John Bel Edwards’ decision to opt out of the program caused financial uncertainty and distress and that the rapid rise in COVID-19 cases makes the benefits even more crucial.

"Louisiana currently has the fastest-growing covid cases in the country at the time of this filing," the complaint states, according to the Louisiana Record. "Louisiana is also the second poorest state in the country. Of all the states in the country, Louisiana is the last state that should be walking away from $220 million in federal benefits right now."

Similarly, out-of-work South Carolinians claimed Gov. Henry McMaster’s decision to terminate the programs early caused hardship and goes against the state’s statutory obligation to pay benefits.

"Defendants’ actions are plainly contrary to this statutory obligation," the lawsuit said. "As a result of Defendants’ premature termination of these benefits, Plaintiffs have each suffered and will continue to suffer hardships related to the loss or reduction of their Unemployment Insurance benefits."

In all, 26 states cut off the extra $300 in weekly benefits before the federal expiration on September 6, while 22 of them also canceled the Pandemic Unemployment Assistance (PUA) program for workers who don’t normally qualify for regular unemployment insurance and the Pandemic Emergency Unemployment Compensation (PEUC) program that provides extra weeks of benefits.

More than 4 million workers are affected by the cuts in those states, losing a total of $22.5 billion in potential benefits, according to estimates by the Century Foundation. Nearly 3 in 5 workers affected by the early expirations have been left with no benefits at all.

‘The State is ordered to re-engage’

Three of the 10 lawsuits so far have been successful, but a recent one faced challenges. In Ohio, a state judge rejected the attempt to reinstate the additional $300 in weekly unemployment benefits, saying Gov. Mike DeWine has the authority to cut the benefits.

"The Court is aware of, and sympathetic to, the thousands of Ohioans without work and in desperate need of any assistance available," Franklin County Common Pleas Judge Michael J. Holbrook wrote in his decision. "The Court simply cannot legislate from the bench and overlook the clear terms of [state law]."

Last week, an Arkansas judge granted a preliminary injunction ordering Gov. Hutchinson to reinstate the pandemic unemployment benefits.

"The Court has serious doubts that the Governor and the Director of Workforce Services were acting within the scope of their duties, as these decisions would normally be the subject of legislation from the General Assembly," the order said. "The State is ordered to re-engage these terminated programs if the United States Government will agree to permit the State to do so.

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In Indiana, benefits have been restarted, while a Baltimore City Circuit Court judge granted a preliminary injunction against the governor earlier this month, reinstating the benefits at least temporarily in Maryland.

"The lawsuits that were filed by what I might call unemployment experts — people that were attorneys for the poor — those lawsuits have generally prevailed," Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. "Whereas the ones so far that were filed by attorneys that were just general attorneys or general employment lawyers and private practice, those have not prevailed."

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

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