Suit: Michigan's 'robo-adjudication system' wrongly charges, fines jobless aid applicants

Economic Indicators Associated Press

Michigan Unemployment Agency is violating the rights of applicants for jobless benefits by using an automated system to file unjustified fraud charges and penalties against them, a federal lawsuit alleges.

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The Sugar Law Center filed the suit in U.S. District Court in Detroit on behalf of the United Auto Workers union and seven individuals it says were wrongly denied benefits or threatened with fines because of the automated system.

"The state's robo-adjudication of unemployed insurance claims" accuses people of fraud and imposes "severe penalties, often without any basis in fact," John Philo, executive director of the Sugar Law Center, said in a statement Wednesday. "The system treats all persons applying for benefits as suspect and as potential criminals and appears designed to deter working people from applying for benefits that they have earned through years of work after losing their jobs, commonly through no fault of their own."

The suit says Michigan's "robo-adjudication system" violates applicants' constitutional right to due process, as well as the federal Social Security act.

The Associated Press left messages Wednesday afternoon seeking comment from the state.

Among those suing the agency is Amanda Balma, who worked at a nursing home in Okemos until she became pregnant and managers dismissed her in 2014, the complaint said. It said managers said they couldn't accommodate a 10-pound lifting limit.

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"In November 2014, three months after she had stopped receiving benefits, Amanda received a letter from the agency stating she had committed intentional misrepresentation and owed the agency over $20,000 in fines," the complaint said. It said that Balmer's employer wrongly told the state that she was on a leave of absence, rather than having been dismissed.

Another plaintiff, Kevin Grifka, an electrician in Washtenaw County, applied for and received unemployment benefits before returning to work last fall, the complaint said. It said he got a notice in December that he owed $12,000 in restitution, based on a computer error that indicated he was being paid during the layoff.

The Detroit-based law center's lead attorney, Tony Paris, said it has seen a "drastic increase in both the amount of these intakes and the egregiousness of the charges since the implementation of the state's robo-adjudication."

"This current system is not only deterring working people who are between jobs from filing and collecting the benefits they are entitled to, it is jeopardizing an essential safety net, resulting in delays that out-of-work folks cannot afford," Paris said.