San Francisco – A group of California workers who received unemployment insurance benefits during the COVID-19 pandemic, along with the nonprofit Legal Aid at Work, are suing the state’s Employment Development Department (“EDD”), the agency that manages California unemployment benefits.
The class action lawsuit filed today in Alameda Superior Court alleges that the EDD is failing to properly inform plaintiffs and other claimants when it makes extremely consequential decisions retroactively denying claimants benefits, accusing claimants of committing fraud, and demanding repayment of past benefits. Legal Aid at Work and Rosen Bien Galvan & Grunfeld LLP are representing the plaintiffs. The complaint is here.
“The number of Californians who have been impacted by the EDD’s failures is huge. Approximately 20 million claims were filed with the EDD between 2020 and 2022 during the COVID pandemic, and it is clear that thousands of claimants have been hurt by the EDD’s failure to communicate to those who have been retroactively denied benefits in an accurate, clear and timely way,” said George Warner, Director of the Wage Protection Program at Legal Aid at Work. “The staff of our organization and others like it around the state have been contacted by thousands of Californians who have been impacted by the EDD’s failure to effectively communicate the status of their claims.”
The complaint alleges that the EDD only sends notices to claimants by regular mail, to the last address a claimant has provided the Department, even though years may have passed since claimant was receiving benefits, and many claimants have since moved. Because the EDD does not use other means to try to contact the claimants, many claimants do not find out about these decisions until the deadline to appeal has passed. Sometimes, claimants only learn about the decision when the EDD takes their tax refunds, garnishes their wages, or levies their bank accounts. The EDD could be reaching out to claimants in many other, more reliable ways; in other circumstances, the EDD contacts claimants by text message, email, and through the Department’s online portal.
“The EDD is making decisions with huge financial consequences for claimants,” said Warner. “The average person needs to be able to understand any decision that the EDD is making, and their rights and options. But the notices are extremely confusing—even for trained lawyers.”
“Many claimants have no idea what the EDD has decided,” added Jenny Yelin, a partner with Rosen Bien Galvan & Grunfeld LLP in San Francisco. “What makes it even worse is that the decisions are often wrong. When claimants appeal, they have about a 50 percent chance of getting the EDD’s decision reversed—about as good as flipping a coin. But only a subset of claimants appeal the EDD’s decisions, because the EDD’s notices are unintelligible, bury crucial information, and make it seem like the EDD’s decision is final.”
In the complaint, plaintiffs ask the Court to order the EDD to provide clearer notices, written in plain language, so that claimants can understand their rights. They also are asking the Court to order the EDD to inform claimants about their decisions by email, text message, and on the EDD’s website. And because of the EDD’s failure to update addresses or use these readily available communication channels to contact claimants about the denial of claims, plaintiffs are requesting that the Court order the EDD to send revised notices to claimants, so these claimants have a chance to appeal their claims.
The two individual Plaintiffs are representing a class of claimants who, like them, have been sent notices from the EDD in the last two years. The class Plaintiffs and Legal Aid at Work assert that the EDD’s practices violate Due Process under the Fourteenth Amendment, the right to a “fair hearing” under the Social Security Act, and the California Constitution. Legal Aid at Work is also suing the EDD as a taxpayer, alleging that these policies amount to government waste.
George Warner, Attorney, Legal Aid at Work; (415) 593-0065; email@example.com
Jenny Yelin, Partner, Rosen Bien Galvan & Grunfeld LLP; (415) 433-6830; firstname.lastname@example.org
# # #
Statements by Plaintiffs
Renee Okamura: “I did not feel safe working at my job in retail after the pandemic started. The job was too dangerous, given my medical condition. I applied for unemployment insurance benefits because I thought I was eligible, and I relied on those benefits to live. Then, two years later, I received a confusing notice saying I was retroactively not eligible for benefits, that I had made a false statement, and that I would have to pay the EDD a huge amount of money, including penalties. I was really scared. I could not figure out what they thought I told them that was false statement, and I could not figure out why they thought I should be disqualified.”
Kathryn Din: “I found out in 2022 that I owed the EDD over $2,500 because I received a Collections Notice. It was really scary, because I kept on receiving letters from the EDD about how I had to repay the benefits, and how if I did not pay, they would seize my tax refund or take other legal actions against me. Because I never received the Notice of Overpayment that the EDD apparently sent me, I had no idea why the EDD thought I had been overpaid. And, until I reached out for help, I had no idea that I could appeal the decisions that the EDD made about my case.”
# # #