The New York Court of Appeals affirmed a lower court decision upholding the state's denial of pandemic unemployment assistance to Mike H. Carmody in a brief memorandum decision issued Dec. 16. The state's highest court ruled that the Unemployment Insurance Appeal Board correctly applied the 'total unemployment' standard when determining eligibility for COVID-19 related benefits under the CARES Act.
In *Matter of Carmody (Commissioner of Labor)* (2025 NY Slip Op 06963), the court addressed whether Carmody qualified for pandemic unemployment assistance and related benefits under the Coronavirus Aid, Relief, and Economic Security Act. The case centered on the interpretation of former Labor Law sections 522 and 591(1), which establish the 'total unemployment' standard for benefit eligibility.
The Court of Appeals found that the Unemployment Insurance Appeal Board did not err in applying the total unemployment standard to determine Carmody's eligibility for pandemic assistance. The court cited its contemporaneous decision in *Matter of Klosterman (New York State Dept. of Corr. & Community Supervision—Commissioner of Labor)*, also decided Dec. 16, as supporting precedent for this interpretation.
According to the court's memorandum, substantial evidence supported the Board's determination that Carmody was not totally unemployed under former Labor Law section 591(1). The court did not elaborate on the specific facts that led to this conclusion, but the finding suggests that Carmody maintained some form of employment or income during the period for which he sought benefits.
The case also involved allegations that Carmody made false statements to obtain benefits. The court upheld penalties assessed against him, finding that the Board's determination was supported by substantial evidence that Carmody willfully made a 'false statement or representation' to obtain pandemic unemployment benefits. Under Labor Law sections 594(1) and (4), such willful conduct must be knowing, intentional, and deliberate.
The decision represents a strict interpretation of pandemic unemployment assistance eligibility requirements in New York. During the COVID-19 pandemic, the federal CARES Act expanded unemployment benefits to include individuals who were not traditionally eligible, such as independent contractors and gig workers. However, applicants still had to meet certain state-specific requirements, including the total unemployment standard established under New York labor law.
The total unemployment requirement has been a significant hurdle for some claimants seeking pandemic benefits. Under this standard, individuals who maintain any employment or income may be disqualified from receiving assistance, even if their earnings were substantially reduced due to the pandemic. The standard differs from partial unemployment benefits, which allow workers with reduced hours or income to receive some assistance.
Carmody was represented by Jonathan I. Edelstein, while the Commissioner of Labor was represented by Laura Etlinger. The case proceeded through the state's unemployment insurance appeals process before reaching the Court of Appeals.
The Unemployment Insurance Appeal Board serves as the final administrative arbiter of unemployment benefit disputes in New York. Claimants who disagree with initial determinations can appeal to the Board, and adverse Board decisions can be challenged in court through Article 78 proceedings.
The Court of Appeals' decision provides guidance for future cases involving pandemic unemployment assistance and establishes that the traditional total unemployment standard applies even to federal pandemic relief programs. This interpretation may affect other pending cases where claimants challenge denials of pandemic benefits based on the total unemployment requirement.
The ruling also reinforces the state's ability to impose penalties on individuals who allegedly provide false information to obtain benefits. During the pandemic, unemployment agencies across the country struggled with fraudulent claims, leading to increased scrutiny of applications and more aggressive enforcement of penalty provisions.
For unemployment claimants, the decision underscores the importance of accurate reporting when applying for benefits. The court's finding that substantial evidence supported willful misrepresentation suggests that even inadvertent errors could potentially result in penalties if they appear deliberate to administrative reviewers.
The case comes as pandemic-era unemployment programs have largely concluded, but disputes over benefit eligibility and penalties continue to work through the courts. The Court of Appeals' interpretation of the total unemployment standard will likely influence how similar cases are resolved going forward.
The decision was issued as a memorandum, indicating that the court viewed the legal issues as settled and not requiring extensive analysis. This format suggests that the court saw the case as a straightforward application of existing law rather than presenting novel questions requiring detailed explanation.