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Texas unemployment benefits lawsuit: what's the reason and what could be the consequences?

Texas becomes the second state to face a lawsuit from jobless workers over its governor’s decision to end pandemic unemployment benefits early.

Texas becomes the second state to face a lawsuit from jobless workers over its governor’s decision to end pandemic unemployment benefits early.

As the US economy reopens with over half the population vaccinated, businesses are searching for employees to staff their establishments but having difficulties finding willing bodies. Blaming enhanced unemployment benefits, there has been a move in over half the states to cancel the additional assistance to prod people back to work. However, workers are beginning to push back against those executive decisions.

Due to the unpreceded situation created by the covid-19 pandemic the US Congress created enhanced unemployment programs which were extended under the American Rescue Plan until 6 September. However, citing the need to get people back to work 25 Republican governors took the executive decision to end benefits early.

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In Louisiana the Democrat governor reached an agreement with Republican lawmakers to do the same. So far, in a handful of other states, Republican legislatures are trying to get their states to follow suit.

Texas workers say the governor’s decision to stop $300 pandemic unemployment benefit is unlawful

Texas Governor Greg Abbott announced in May that his state would stop participation in the enhanced unemployment benefits programs, including a weekly booster of $300 on top of other jobless aid, on 26 June. His decision was one of two dozen that followed Montana’s lead to end one or all of the enhanced benefits before the 6 September expiration date.

There is no federal obligation for states to participate in the programs, however unemployed workers in Texas allege that the governor overstepped his authority in canceling the enhanced unemployment benefits. Through Facebook, two separate groups of jobless aid recipients, Texas Unemployment Updates and Unemployment Petition and Peaceful Protest, organized to stop the state from ending the financial assistance.

The 30,000-plus members among the two groups say that Governor Abbott did not have the legal authority to take the decision on his own, but that it should be determined by the Texas Workforce Commission. The lawsuit states that Governor Abbott “exceeded his power” when he opted out of the program, and seeks a restraining order to keep benefits from ending for nearly a million Texans. A judge was set to hear the case on Friday.

Indiana judge stops state from ending enhanced unemployment benefits

Judge John Hanley of the Marion Superior Court granted a preliminary injunction on Indiana’s suspension of the enhanced unemployment compensation programs on Friday. The decision reinstates payments for around 230,000 Indiana residents which stopped on 19 June. Judge Hanley said there was a "preponderance of evidence" that Governor Eric Holcomb had violated Indiana law with his decision to end the pandemic jobless aid early. Under Indiana law the state is required "to procure all available federal insurance benefits to citizens."

Judge Hanley in his ruling wrote "A loss of housing or medical care and the inability to provide food, shelter and adequate childcare for a family constitute irreparable harm pending resolution of this cause of action and are not adequately compensable by an award of damages."

A handful of legislatures push to have enhanced unemployment benefits stopped

Three states – Michigan, North Carolina and Wisconsin, now have legislation pending the signature of their respective state’s governor to end the $300 a week in extra unemployment compensation. All three states have Republican-controlled state legislatures and Democrat governors. It is expected that all three governors will veto the bills but have yet to do so.

Lawmakers in Kansas passed a non-binding resolution calling on Governor Laura Kelly to end the $300 weekly extra payment. Governor Kelly is opposed to such a move. Likewise, New Mexico Governor Michelle Grisham received a letter from Republican leaders in the state House of Representatives with a similar request to encourage jobless New Mexicans to return to work. In the case of New Mexico though lawmakers asked for a “one-time $1,200 return-to-work bonus once an unemployed worker has been on the job for a month,” to be created in place of the weekly additional payment.