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Legislature expected to OK settlement in class-action suit against unemployment agency

A gavel rests on the judge’s bench in the courtroom of the 39th Air Base Wing legal office at Incirlik Air Base, Turkey, Nov. 14, 2019.
Air Force Staff Sgt. Joshua Joseph Magbanua
A gavel rests on the judge’s bench in the courtroom of the 39th Air Base Wing legal office at Incirlik Air Base, Turkey, Nov. 14, 2019.

The Michigan Unemployment Insurance Agency has reached a tentative $55 million agreement to resolve a class-action lawsuit representing thousands of workers who were wrongly forced to repay pandemic-era jobless benefits.

In some cases, workers had wages and tax refunds garnished while they were still contesting the unemployment agency’s determination that they were improperly paid.

The deal has been given a court’s preliminary OK. The class-action claim says the state’s pursuit of these workers intensified their stress and drove some into bankruptcy.

Amber McCann is the press secretary for House Speaker Joe Tate (D-Detroit). She said Tuesday that the Legislature has approved funding for lawsuit settlements in the past and she expects this time will be no different.

“Details have yet to be worked out, but I’m sure the Legislature will comply with whatever the terms of the settlement are,” she said.

State Senator John Cherry (D-Flint) sits on the Senate Appropriations Committee. He said the errors affected “unprecedented numbers” of people.

“We had a lot of constituents who were having a lot of trouble. It took a long time to work through all those issues and we’re still working through them. But I’m glad they reached a settlement and we’ll have to figure out how to handle that.”

Cherry said the biggest decision will likely be which pot of money the Legislature will draw from to make the payments.

In an often-fractious political environment, it’s a place where Democrats and Republicans appear to coalesce.

State Senator Roger Victory (R-Hudsonville) told Michigan Public Radio said he is still looking at the settlement terms, but agrees that people were treated poorly by the state Unemployment Insurance Agency.

“Fraud was committed against these folks,” he said. “Their lives were disrupted. Some of their lives were literally ruined and they just had no voice. So, it was emotional distress and financial distress on a number of these people.”

Victory said some of the issues with technology and practices pre-dated COVID-19. The unemployment agency won’t admit liability under the deal, but will take steps to prevent similar errors in the future.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.