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SD Supreme Court rules against Dept. of Labor in pandemic assistance case

The South Dakota Supreme Court reversed another case where the state Department of Labor ordered someone to repay pandemic unemployment assistance they received.

The case revolves around a woman who continued to be employed part-time while collecting benefits.

Melissa Palmer was working two jobs when the COVID-19 pandemic hit, according to court documents. One job at a Sioux Falls pet store wasn’t affected. However, she lost all work in her other job as a sign language interpreter.

She applied for unemployment assistance in May of 2020, noting she was still employed part-time at another job. The Department of Labor approved her application.

A year later, the department sent Palmer a letter accusing her of fraud. The department claimed she didn’t properly note hours worked at the pet store, which is part of the reporting requirements.

Palmer argued she misunderstood the reporting requirements, stating she had noted she was still employed part-time and that her hours had not been reduced. She was also aware that her employer notified the department of the hours she worked, which she thought was sufficient.

An administrative law judge ruled in the Department of Labor's favor and ordered Palmer to repay the state a total of $8,664.

Palmer appealed. The state Supreme Court ruled in her favor in a ruling issued Thursday. The opinion stated Palmer made a simple paperwork error, which doesn't constitute the "willful misrepresentation" needed to prove fraud.

The case marks the latest in a string of rulings where the state's highest court ruled in favor of individuals who had been ordered by the state to repay pandemic unemployment assistance. Both Palmer's case and another recent ruling in April cited a May 2023 state Supreme Court ruling, Bracken v. Department of Labor, where justices ruled in favor of a Hermosa bed and breakfast owner.

Josh Chilson is the news director at South Dakota Public Broadcasting. A Florence, S.D. native, Josh graduated with a journalism degree from South Dakota State University. He has worked as a newspaper reporter and videographer, and most recently as managing editor for Dakota News Now. Josh is based out of SDPB's Sioux Falls studio.