The state Division of Employment Security has lost the first battle in a legal war over public documents that unemployment law attorneys rely on to solicit clients.
A preliminary injunction issued Thursday by Wake County Superior Court Judge Paul Ridgeway orders the state to continue to make the disputed documents available daily until the dispute goes to trial.
Agency chief Dale Folwell initially was intent on making hearing notices of contested unemployment cases available less frequently to attorneys who pay a monthly fee to obtain them. But he switched course and opposed releasing them at all after the U.S. Department of Labor objected to making them available.
Durham employment law attorney Monica Wilson contended in her lawsuit against the agency that, under either of those two scenarios, she and other lawyers with similar practices could be put out of business. Moreover, jobless workers would be less likely to have a lawyer on their side when their unemployment claims are contested.
In Thursdays three-page ruling, Ridgeway concluded there was probable cause that Wilson would prevail in the case and that she would suffer irreparable harm if the hearing notices werent made available daily.
Wilsons attorney, Durham lawyer Jim White, hailed the preliminary injunction as the right result for both his client and the people she represents.
White added that he hopes the media attention focused on the lawsuit has raised awareness that affordable counsel is available to jobless workers fighting to get unemployment benefits.
Folwell said he is concerned the ruling could jeopardize the agencys $57.7 million in federal funding its sole source of operating funds.
Last week a U.S. Department of Labor official notified the department that releasing the hearing notices violated federal law and could trigger a halt in the agencys funding. The official became aware of the issue from a news story about the lawsuit.
Labor Department officials couldnt be reached for comment about the preliminary injunction.
Folwell, who joined the agency 12 months ago, said the legal battle has highlighted the fact that our agency has been violating federal law by selling confidential information for a long period of time. Attorneys pay a fee to receive the notices.
He added that it is regrettable that unemployed workers have never been notified that hearing notices, which can include sensitive information such as whether an employee was let go for misconduct, were available to the public.
The state argued at a hearing this week that federal law required the state to keep the documents confidential. But White, arguing on Wilsons behalf, contended that federal law clearly defers to state law regarding what constitutes a public record.
Fresh cases for lawyers
The hearing notices at issue involve appeals filed by jobless workers whose claims have been denied or by employers who contend that the worker isnt entitled to an unemployment check.
For the past decade, those hearing notices have been purchased for $300 a month by attorneys who were able to retrieve them daily at the agencys headquarters on Wade Avenue in Raleigh. But late last month, Folwell abruptly instituted a new policy that made them available only by mail as few as three times a month, rather than daily.
Wilson contended that because many hearings are scheduled 10 to 14 days in advance, decreasing the frequency and making them available only by mail would prevent attorneys from contacting potential clients in time.
Folwells new policy also raised the monthly fee for obtaining the documents to $600, but the preliminary injunction maintains the $300-a-month status quo.
Wilson contends that the state cynically changed its policy to prevent lawyers from representing unemployed workers at appeals hearings, resulting in fewer unemployment benefits being paid.
The state argued there are security issues because lawyers retrieve the documents without going through building security and that releasing the documents only by mail levels the playing field for out-of-town lawyers.
The preliminary injunction clears the way for the state to take steps to ensure employee safety as long as it doesnt impede daily access to the hearing notices.