Iowa Gov. Kim Reynolds Sued For Ending Federal Unemployment Benefits Under New Action Lawsuit

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Iowa Unemployment Benefits Class Action Lawsuit Overview: 

• Who: Plaintiffs Crystal Marciniak, Holly Bladel, Karla Smith, and Brian Wisch filed a class action lawsuit against Iowa Gov. Kim Reynolds and Workforce Development Director Beth Townsend.
• Why: Lawsuit claims Reynolds broke state law when she chose to end the state’s participation in federal programs that were providing extra unemployment benefits to residents. 
• Where: The class action lawsuit was filed in Iowa federal court. 

Iowa Gov. Kate Reynolds’ decision to end enhanced unemployment benefits for tens of thousands of unemployed residents violated state law, a new class action lawsuit states. 

Lead plaintiffs Crystal Marciniak, Holly Bladel, Karla Smith, and Brian Wisch are hoping to become eligible for what could turn out to be hundreds of millions of dollars in unemployment aid denied to them since Reynolds dropped out of federal programs that provided extra unemployment on June 12. 

Marciniak, Bladel, Smith, and Wisch are representing a Class of 55,000 Iowa residents being denied federal aid and are seeking a temporary restraining order requiring the state to resume participation in the federal programs in addition to receiving back-pay from the state with interest. 

Iowa had been paying residents collecting unemployment $33 million per week when Beth Townsend, the state’s workforce development director, recommended the state put an end to the programs in May.  

Reynolds agreed, citing a “severe workforce shortage,” while ending participation in federal programs that gave residents on unemployment an extra $300 per week. The programs also expanded the criteria for being eligible to receive unemployment. 

Plaintiffs allege Reynolds’ decision violated the Iowa Employment Security Law, which states Iowa’s workforce agency “shall cooperate with the United States department of labor to the fullest extent consistent,” and shall “take such action, through the adoption of appropriate rules, regulations, administrative methods, and standards, as may be necessary to secure to this state and its citizens all advantages available” under provisions set out by the Social Security Act related to unemployment compensation. 

An Iowa code on unemployment security and compensation, meanwhile, says unemployment in the state is “a serious menace to the health, morals, and welfare of the people of this state.” 

Plaintiffs also describe how the pandemic – which has now been exasperated by the delta variant –  hurt their job prospects and cut into their finances. 

Reynolds spokesman Pat Garrett said the number of Iowa residents seeking employment at unemployment offices and joining the state’s labor force has increased since Reynolds announced she was cutting the extra benefits. 

“This was not only the right decision, but also in accordance with the law and this lawsuit has no merit,” Garrett told the Associated Press. 

Residents in several states have already filed class action lawsuits after their governors also chose to end participation in the federal programs, including Ohio, Florida, Texas, and Maryland. A total of 26 governors have taken similar steps in ending federal aid. 

Are you an Iowa resident on unemployment that feels you are entitled to federal aid?  Let us know in the comments! 

The plaintiffs are represented by B.J. Stoltze, Jr. and Jeff Carter.

The Iowa Unemployment Benefits Class Action Lawsuit is Marciniak et al v. Iowa, Case No. unknown, in the U.S. District Court for the Southern District of Iowa.

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