NC jobs agency suffers legal setback

dranii@newsobserver.comMarch 13, 2014 

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 Thursday’s 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 weren’t made available daily.

Wilson’s 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 agency’s $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 agency’s funding. The official became aware of the issue from a news story about the lawsuit.

Labor Department officials couldn’t 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 Wilson’s 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 isn’t 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 agency’s 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.

Folwell’s 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 doesn’t impede daily access to the hearing notices.

Ranii: 919-829-4877

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service