Oregon is seeking to recover overpayments to unemployed people. The judge has to decide if it is legal


Rowan Hayes was cautiously optimistic when she read a letter from the Oregon Employment Department dated Dec. 6, 2023, saying she was eligible for the unemployment benefits she received during the pandemic and would receive a refund of the money the department had ordered her to repay.

The letter, dated 10 days after the Statesman Journal published a story about the OED’s myriad rulings in her case, was a reversal of the department’s 2020 ruling that Hayes left without good cause and therefore had to repay the state the $14,000 she received. All the time. The epidemic.

The Oregon Law Center sued the office of CEO and Director David Gerstenfeld in 2022 on behalf of six Oregonians who were ordered to repay unemployment benefits, citing the overpayment system as “impenetrable” and “fragmented” with “no clear explanation as to why.” The government takes action.” Delinquent interest already paid.”

Multnomah County Circuit Court Judge Eric Dahlen is hearing the case to determine whether the process of informing Oregonians that they were overpaid violates their constitutional rights to due process.

During a hearing on January 23, Dahlin said, “This is probably the most difficult case I have ever faced as a judge.”

Thousands of Oregonians have been asked to pay back benefits related to the pandemic. The OED made nearly 80,000 overpayment decisions in 2022, according to data it shared with the Statesman in December.

Oregon’s 2020 unemployment overpayment ruling has been rescinded

Hayes, a 25-year-old Clackamas mother, was on a payment plan that she expected to pay off in 2066.

She contacted the Oregon Law Center after she got a letter from the CEO’s office saying she was owed the money she had paid. (She has filed a written declaration in support of the Oregon Law Center’s case but is not one of the plaintiffs.)

Her experience with the OED includes exchanging numerous emails with a claims specialist from December 2020 through March 2021 in which she was told she was eligible for pandemic unemployment benefits, that the overpayments would be offset with various benefits and that notices she received in the mail were ignored. She requested a hearing, but it was held on the scheduled date. Her appeal was later rejected.

Hayes was also barred from waiving the overpayment, claiming she “misreported the information.” The new decision recognized her resignation after the vehicle required for her job had been totaled, meaning she had no reasonable choice but to resign.

Hayes described working with the agency again on recovering the money as “difficult.”

She said she is reviewing her bank statements to determine how much money she is owed because she is not confident that the agency is keeping an accurate record of the payments she has made.

The constitutionality of the unemployment overpayment process is in question

the Oregon Law Center The lawsuit asked the court to declare that the agency’s overpayments violated the due process requirement of the law Fourteenth Amendment. They also want a judge to order the state to immediately stop collecting overpayments until the CEO’s office creates and implements a new system.

The OED confirms that changes will come later this year. The new system is scheduled to go live on March 4, lawyers at the Office of the CEO said. Part of the switch will change the current two-notification system used for overpayment decisions to one notification.

Both parties filed motions for summary judgment, asking Dahlin to make his decision without a trial. Oral arguments were first heard on November 30, and a second hearing was held on January 23.

On January 23, the judge asked both parties to answer follow-up questions he had sent them the previous day. Dahlin said there are “obvious problems” with the system, and he will have to decide whether those problems violate the Constitution.

He asked for examples of cases in which Oregon appellate courts have made similar due process decisions regarding notices. The Oregon Law Center’s attorney asked if they would acknowledge that any of the issues with the overpayment system in the complaint were related to the pandemic.

Lawyers representing the six Oregon residents said no.

Attorney Kelsey Hillman said each claim relates to an OED policy that existed before the pandemic. She added that the pandemic has brought the issues back to the surface.

Dahlen also asked whether constitutional issues would remain once the OED implements its new system later in the year.

There’s no way to know before it’s in place, Hillman said.

“This means that the ruling in this case is critical to ensuring that the new system does not perpetuate existing constitutional violations in a shiny package,” Heilman said.

Dahlin also raised questions regarding the agency’s practice of not translating full notices sent to Oregonians in Spanish.

“I don’t know that best practice is the issue before the court. I think it’s more about the minimum that the agency is legally required to do,” said Shawnee Morgan of the Oregon Department of Justice. “We are here today on very specific allegations of due process violations.”

Morgan said the agency is also concerned that expanding what is required in notices could lead to more confusion. Morgan said the constitutionally required information is being met.

Dahlin asked both sides to submit additional memorandums by February 12.

Diane Lugo covers the Oregon Legislature and equality issues. Accessed at dlugo@statesmanjournal.com Or on Twitter @Diane Lugo

This article originally appeared in the Salem Statesman: Oregon’s unemployment overpayment issue faces a constitutional test

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