Lawsuit Alleges 'Catastrophic Consequences' From Unemployment Delays

By Kate Davidson (OPB)
July 10, 2020 8:15 p.m.

UPDATE (4:33 p.m. PT) - The Oregon Employment Department is facing a lawsuit this week for allegedly violating state and federal law in its administration of unemployment benefits during the coronavirus crisis.

The suit asks the Multnomah County Circuit Court to compel OED to approve or deny unemployment claims within four weeks of a person’s application.


Many thousands of Oregonians have experienced just the opposite: an agonizing purgatory.

“OED’s failures have forced an untold number of Oregonians to live without the critical financial safety net of unemployment benefit money for a staggering 15 weeks – with catastrophic consequences for Oregonians who were low-income even before losing their jobs,” the suit states.

The Oregon Law Center and Legal Aid Services of Oregon filed the petition on behalf of 13 people who have struggled to get benefits.

Among them:

  • Florentina Flores de Vega, a seasonal agricultural worker who speaks Mixteco Alto and Spanish. The suit alleges her access to benefits was "wholly blocked" by the inaccessibility of Oregon's unemployment insurance system to people who don't speak English.
  • David Haines, a former Lyft driver and single father. He applied for regular unemployment benefits in April, then Pandemic Unemployment Assistance benefits in May. After thousands of attempts to call OED, he learned his claim would be sent to the agency's tax department. The suit says he has heard nothing since June 2.
  • Htoo Ler Paw, a refugee from Myanmar who was laid off from her cleaning job in March. The suit alleges OED requested a copy of her permanent residency document, or green card, five times, and it was sent five times, but the agency failed to deliver benefits. Paw waited on hold for hours to request phone interpretation, but never got it.

Two other petitioners, whom OPB is not naming, are described as survivors of domestic violence. They called OED seeking help again and again. One became so impoverished that she could not afford incontinence supplies for her disabled child, according to the suit.

“(She) feels that her and her family’s safety is jeopardized by the delayed and unpredictable payments by OED,” the suit states.

Related: Oregon Gov. Kate Brown Fires State Employment Director After COVID Failures

In a written statement, OED acting director David Gerstenfeld said the agency was aware of the lawsuit but does not generally comment on pending litigation. "What we can say," he wrote, "is that we truly understand just how frustrating this has been, especially for the more than 243,000 Oregonians who have lost their jobs as a result of the pandemic."

He pointed to steps the agency has taken, including hiring of hundreds of staff, opening a new contact center and, just recently, launching a language assistance hotline. But he conceded in the statement, "we have a lot more work to do."


Gerstenfeld assumed leadership of the beleaguered agency in May, following the ouster of his boss, director Kay Erickson. Erickson could not survive blistering criticism of the agency’s inability to deliver benefits to hundreds of thousands of Oregonians in a timely manner. U.S. Senator Ron Wyden, D-Oregon, was among those calling for Erickson’s departure, labeling the department’s problems a “litany of incompetence and unresponsiveness.”

Gerstenfeld has sought to increase communication with claimants, journalists and lawmakers. He has also provided a sobering assessment of the wait still to come. At his weekly press briefing, before the department received the suit, Gerstenfeld warned that tens of thousands of people whose PUA claims have not yet been processed should not expect payment for at least another month. Many have been waiting since March.

The lawsuit outlines OED’s scramble to address an unemployment crisis of historic proportions. The agency has received more than 600,000 claims since the pandemic hit and has been hampered by outdated technology and a mandate to quickly implement new federal programs.

The suit argues the agency has violated state law by failing to promptly approve or deny unemployment claims.

One common lag occurs when a claim is sent into the agency’s adjudication process, which Gerstenfeld said this week can cause delays of 12 to 14 weeks.

At a time of dire need, the suit states, “the current delays facing Oregonians who have applied for traditional UI, PUA, and PEUC are patently unreasonable.”

The suit also alleges the employment department intentionally discriminated against non-English speakers by failing to provide an online application for regular unemployment benefits in a language other than English.

“That decision was made despite OED having had ample resources to correct the problem since at least 2009,” the lawsuit states.

The suit argues the department’s decision violates Title VI of the 1964 Civil Rights Act and the Equal Protection Clause of the Fourteenth Amendment, which prohibit discrimination based on national origin in the provision of public benefits such as unemployment insurance.

Related: Applying For Unemployment Is Even Harder For Workers With Limited English

The employment department did not launch a designated language hotline until this week. When its regular phone lines became hopelessly jammed, as OPB reported in May, many people with limited English were left in the lurch – unable to access interpreters by phone and unable to apply online, even in Spanish.

The petitioners want the court to order the employment department to make multiple changes, including:

  • Approving or denying unemployment claims no later than four weeks from the date of application, including any time spent in adjudication or tax department review;
  • Automatically treating any denied regular unemployment claim as a PUA application and processing it promptly;
  • Creating a Spanish-language online application for regular unemployment claims; and
  • Deciding pending applications based on when a person first filed for any type of unemployment assistance, so those waiting longest can get help soonest.

No hearings have been scheduled yet in the matter.

Editor's note: This story has been updated to include statements from the Oregon Employment Department, which OPB received after the story was originally published.