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Enforcement ActionLow RiskMultistate

Colorado-led multistate lawsuit over terminated unemployment insurance modernization grants

U.S. Department of LaborOctober 9, 2026Colorado Attorney General

Summary

Colorado Attorney General Phil Weiser and a multistate coalition sued the U.S. Department of Labor over its termination of grants for unemployment insurance system improvements. The states allege the terminations breached their grant agreements and seek money damages; the release does not describe a privacy violation or an imposed penalty.

Remedy

The states are seeking money damages. No remedy has been imposed; this is a lawsuit.

Contract Impact

This action concerns government grant agreements, not privacy enforcement. Teams managing public-sector grants should review termination and funding-rescission rights, required notice and objection procedures, permitted grounds for termination, performance-period commitments, and good-faith obligations. For vendor agreements supporting grant-funded projects, check whether termination or funding-loss clauses provide adequate notice, address work in progress and committed costs, and require cooperation with any transition or closeout. The release does not identify customer or employee privacy clauses requiring changes.

Contract Search Terms

grant termination clausetermination for conveniencetermination notice periodopportunity to objectgrant funding rescissionchange in agency prioritiesperformance periodgood faith and fair dealing

Laws Cited

American Rescue Plan Act of 2021

Violation Types

Entity Details

Entity

U.S. Department of Labor

Industry

Other

Multistate Coalition

Wisconsin Attorney General Josh KaulMaryland Attorney General Anthony BrownCaliforniaColoradoDelawareIllinoisMaineMichiganNew JerseyNew MexicoNew YorkOregonKentuckyPennsylvania

Official Sources

Source Evidence

Entity Name
"sued the U.S. Department of Labor"
Event Date
"Oct. 9, 2026"
Laws Cited
"Congress created the grants at issue as part of the American Rescue Plan Act of 2021"
Violation Types
"the grant terminations breached the express terms of each of the states’ grant agreements"
Is Multistate
"Attorney General Phil Weiser and a coalition of 13 other states sued"
Remedy Summary
"The states are seeking money damages as part of the lawsuit."

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