A state legislative committee has endorsed a bill designed to extricate the state Division of Employment Security from a legal conundrum that threatens the agency’s federal funding.
The measure was endorsed Friday by a voice vote – without any debate or discussion among legislators – by the Joint Legislative Oversight Committee on Unemployment Insurance.
The bill would halt Employment Security’s decadelong practice of making hearing notices of contested unemployment cases available to employment law attorneys who pay a monthly fee. The U.S. Labor Department contends the policy violates federal regulations enacted in 2006 regarding dissemination of confidential information.
But a court order issued in March requires the state to continue to make those documents available. Hence, the conundrum.
“As I have stated publicly, the agency is between a rock and a hard place,” Dale Folwell, the head of Employment Security, said at the committee meeting. “We try to respect all authority every day.”
Monica Wilson, a Durham employment lawyer whose lawsuit led to the preliminary injunction that today requires the agency to make those hearing notices available, called the bill yet more bad news for beleaguered North Carolina workers.
“I’m really hurting for my clients at the moment,” she said.
Wilson and other employment law attorneys rely on the hearing notices to send solicitation letters to potential clients – unemployed workers whose benefits claims are being contested by their former employer. Without those letters, she said, many jobless workers won’t realize they can be represented by legal counsel at their hearings, where they’re likely to face an attorney or unemployment specialist hired by their former employer.
“These people would just go back to being in the dark,” she said.
Wilson filed her lawsuit after Folwell decided to make the hearing notices available to attorneys less frequently and for a higher monthly fee. The headlines generated by that lawsuit made the federal government aware of the situation, which led to it notifying the state it was violating federal law.
In an April 25 letter, Gail Gilbert, administrator of the federal Office of Unemployment Insurance in the Labor Department, urged the state to pass a law that ended the availability of the hearing notices. She also warned that continuing to make the hearing notices available would jeopardize the agency’s federal funding.
Employment Security’s entire operating budget of more than $60 million comes from the federal government.
Jan Paul, a staff attorney with the legislature’s Research Division, told committee members that, according to the Labor Department, North Carolina is the only state that makes these hearing notices available to the public.