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CAMACHO v. BOWLING

February 8, 1983

CARMEN CAMACHO AND STEVEN FLOWERS, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
WILLIAM M. BOWLING, DIRECTOR, ILLINOIS DEPARTMENT OF LABOR; C. THOMPSON ROSS, ADMINISTRATOR OF BUREAU OF UNEMPLOYMENT SECURITY; AGALIECE MILLER, COMMISSIONER OF DIVISION OF UNEMPLOYMENT INSURANCE; SACHTLEBEN, CHIEF OF THE APPEALS SECTION; ILLINOIS DEPARTMENT OF LABOR, DEFENDANTS.



The opinion of the court was delivered by: Roszkowski, District Judge.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Before the court is a civil rights class action which challenges the practices of the State of Illinois in its administration of unemployment insurance benefits. The plaintiffs claim that the Illinois Department of Labor has a practice of raising issues at the administrative appeals hearing which were not appealed from and for which claimants received no notice. The plaintiffs contend that this practice violates Section 303(a)(3) of the Social Security Act, 42 U.S.C. § 503(a)(3), and deprives the plaintiffs of property (unemployment benefits) without the due process of law guaranteed under the Fourteenth Amendment to the Constitution of the United States. A bench trial of the liability issue*fn1 was conducted on May 4, 1982. For the reasons stated herein, the court finds in favor of the plaintiff class.*fn2

Jurisdiction of the court is properly invoked pursuant to 28 U.S.C. § 1343. This opinion constitutes the court's findings of fact and conclusions of law as is required by Federal Rule of Civil Procedure 52.

I. THE UNEMPLOYMENT INSURANCE PROGRAM

Title III of the Social Security Act, 42 U.S.C. § 501 et seq., established the Unemployment Compensation program. The program is administered and implemented through state governmental bodies. The Illinois program operates under the guidelines found in the Illinois Unemployment Insurance Act, Ill.Rev.Stat. ch. 48 §§ 300 et seq., (1981). Under the Act, the Director of the Illinois Department of Labor is responsible for administering the Illinois Unemployment Insurance System. The procedures generally followed in administering the program are as follows.

a. Initial Application for Benefits

Under the system as it is presently structured, applicants for unemployment insurance benefits must appear personally at the local unemployment office to apply for benefits. At the time of this initial application, each claimant completes an application form and then receives a benefits right interview.

During the interview, a state employee will explain the eligibility requirements to the claimant. Among the requirements discussed is the requirement that the claimant be able to work, be available for work, and be actively seeking work.*fn3 This requirement is generally referred to as the "A & A" requirement.

At the interview, which is conducted either one-on-one or in groups with the aid of audio visual equipment, the claimants also receive a booklet entitled "You and the Facts About Unemployment Insurance." The booklet, 32 pages in length, makes these disclosures about the A & A requirement:

  You are eligible for benefits for any week only if
  you meet ALL of the following conditions and are NOT
  subject to disqualification:
  During the week, you were ABLE to work, AVAILABLE for
  work and actively LOOKING for work on a full-time
  basis.
  The law states that you must be AVAILABLE FOR WORK
  during any week for which you claim benefits. This
  means, during the week, you must have been willing
  and ready to accept a suitable job. . . .
  The law states you must be actively looking for work
  on your own initiative. While the State Job Service
  (at one of whose offices you must register) will make
  every effort to help you find a job, you will be
  expected to inform your unemployment insurance office
  about:

1. Where you applied for work.

2. The kind of work you have been seeking.

3. Your prospects of being hired.

  Keep a record of the dates and places you apply for
  work. If your period of unemployment

  becomes extended, you may have to consider "lowering
  your sights" to improve your chances of finding work.

The booklet also informs the claimant of other relevant rules including potential grounds for disqualification, procedures for appeal of adverse rulings, and amount of benefits to which a person may be entitled.

After the claimant completes the application, the agency hands the claimant a "Ben-437 form." The form, entitled "IMPORTANT NOTICE," again reiterates the significance of the A & A requirement. The form, in full, provides:

    You have just filed your claim for unemployment
  insurance benefits. IN ORDER TO RECEIVE BENEFITS YOU
  MUST BE ACTIVELY LOOKING FOR WORK. The Employment
  Service, with whom you are required to register
  unless otherwise notified, will make every effort to
  help you find a job. However, you must also look for
  a job yourself. Upon request, you will be expected to
  furnish this office with information regarding (1)
  where you have applied for work, (2) the kind of work
  you have been seeking, and (3) your prospects for
  employment.
  IT IS ADVISABLE TO KEEP A RECORD OF THE DATES AND
  PLACES YOU APPLY FOR WORK.
    As the period of your unemployment becomes
  extended, you will be expected to give consideration
  to the acceptance of work outside of your customary
  occupation or for prevailing wages which may be lower
  than you received in your last regular job.
    Other conditions which you must meet to receive
  benefits are explained in a booklet, YOU AND THE
  FACTS ABOUT UNEMPLOYMENT INSURANCE. If you do not
  have a copy ask for one at the claims counter or the
  reception desk.

Unless the claimant is exempt, the Local Office will instruct the claimant to register with the Illinois Job Service. Registration with the local employment service office is also a prerequisite to eligibility for benefits.

After the interview, the claimant is mailed form "BIS 653". (See Appendix 1)*fn4. The form covers a two week period. In completing the form, the claimant certifies that he was available and looking for work. The form asks the claimant to list in detail the potential employers contacted, the date of contact, the person contacted, the method of contact, the type of work sought, and the results of the contact. After the local office mails the BIS 653 to the claimant, it begins to process the claimant's application.

b. Processing the Application

The local office will review the completed application to determine whether the claimant is eligible for benefits. If this preliminary examination indicates eligibility, the local office mails a notice of the claim to the claimant's former employer. The employer is entitled to object to the claim if it believes the applicant is ineligible. If there is an employer objection, the claimant will be summoned back to the local office and the objection will be discussed with a claim's adjudicator.

If there is no objection, the claimant is authorized to receive up to 26 weeks of unemployment compensation provided that the claimant continues to satisfy all eligibility requirements.

c. Monitoring For Continued Eligibility

The local office also monitors eligible claimants to be sure that they continue to satisfy all requirements. This continuing review is achieved primarily through the BIS 653 form. Every two weeks, the claimant files a new BIS 653 that certifies continuing eligibility and documents in detail the claimant's availability for work and efforts to find work during the two week period covered by the form.

At the follow up interviews, the claims adjudicator will insure that the office's files are current and that the information contained therein is accurate. The claims adjudicator will also inquire into the claimant's continuing satisfaction of the A & A requirement.

The claims adjudicator will then decide whether the claimant is still eligible for benefits. The decision is rendered in writing, setting forth the basis of the decision. The written determination also informs the party of the right to appeal the decision to a referee. Either the claimant or an employer is entitled to appeal an adverse ruling.

A party also has a right to request the claims adjudicator to reconsider his decision before the claimant brings the appeal. Where reconsideration is requested, the claims adjudicator again gives written reasons for his ruling. Either the claimant or an employer may appeal an adverse reconsideration ruling.

d. The Appeal Hearing

An adverse ruling by the claims adjudicator at any stage of the application process may be appealed.

The appeals process begins with notice to the claimant of the right to appeal. The claims adjudicator's written determination contains standardized language which informs the party that they "may file an appeal, in person or by mail." The time limits for filing an appeal are stated. The written determination also informs the party that he will have the opportunity to present evidence at the appeal.

The claimant is also instructed to report to the local office on the claimant's regular report day and to continue to file the biweekly BIS 653 forms during the pendency of the appeal.

After the local office receives the notice of appeal, it sets a hearing date and notifies the claimant of the date by mail.

At the appeal the referee will conduct a hearing which first addresses the claims adjudicator's reasons for denying the benefits. The reason or reasons for the denial may or may not include the A & A issue. Where A & A is noted as an issue on appeal, the referee will address it first. If it is not an issue on appeal, the agency's internal procedural manual advises the referee to first address the written reasons for the denial. If those reasons are found to be meritless, the manual instructs the referee to then inquire into the A & A issue. The net effect is that any claimant wishing to establish eligibility through an appeal will have to overcome the A & A issue whether or not it was specifically noted as a basis for denial of benefit in the adjudicator's written decision.

The BIS 653 forms, which the claimant has been filing every two weeks to document his A & A are not physically before the referee at the appeals hearing. Nor are the forms available for the claimant to review at or prior to the hearing. The agency does have a policy, however, of granting continuances of appeals if the claimant needs to gather evidence of availability for work. The continuance must be requested, however, and the agency does not have an established policy of informing all claimants as a matter of course that they have the option of a continuance should they find that they are without necessary documentation.

The court finds, as a factual matter, that the failure to notify claimants that the A & A issue may be raised on appeal has the effect of placing some claimants before the referee unprepared to address the issue. This fact is well illustrated by the experience of two of the named plaintiffs in the action, Steven Flowers and Carmen Camacho.

    II. EXPERIENCES OF NAMED PLAINTIFFS WITH THE UNEMPLOYMENT
                        INSURANCE PROGRAM

a. Steven Flowers

On or about June 6, 1979, Steven Flowers filed a claim for Illinois unemployment insurance benefits and was found to be monetarily eligible to receive benefits.

At the time of his application, Mr. Flowers received a booklet entitled, "You and the Facts about Unemployment Insurance" (BEN 224). Mr. Flowers read the booklet and generally understood it. Mr. Flowers was told by the claims adjudicator that he had to be looking for work and able to work and that he would be ineligible for benefits if he was not looking for work and was not able to work. He was also told that he had to register with the ...


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