I'm umping in a slow pitch softball league and we had something I've never seen in all my years umping or playing, there's a runner on 1st only and the hitter at bat hits a ground rule double. The runner on 1st sees this going to be a ground rule double and slows down, and while I'm calling the ground rule double the hitter passes the runner. I tell the hitter to go to 2nd and the runner to go to 3rd. The team in the field was furious that I didn't call the hitter out for passing the runner on the base path. I felt very confident about my call since the ball was dead as soon as the ball was out of play but I was hoping that there is a rule to help back me up after this strange situation.
You were correct. The specific rule depends on the exact rulebook your league uses, which you did not state. I’ll show the rules from the (international) WSBC Slow Pitch Softball Playing Rules (2018–2021):
A runner is out and the ball remains live when:
vi. they physically pass a preceding runner before that runner has been called out. The ball remains live. The runner is not out if the ball becomes a foul ball or an uncaught fly foul ball or if a runner passes a preceding runner on a dead ball play. The ball remains dead;
which states you can pass the preceding runner in a dead-ball situation. And:
i) The batter-runner and runner(s) are awarded two bases from the time of pitch in the following circumstances and the ball is dead:
1) when a fair batted ball passes out of the playing field at a distance less than the dimensions of a regulation field.
This is an interesting scenario, but I believe you were correct in your ruling. Referencing the official MLB rules, any runner may advance without liability to be put out in the case of a ground rule double.
Here is the relevant rule (5.06(b)(4))
(4) Each runner including the batter-runner may, without liability to be put out, advance:
(F) Two bases, if a fair ball bounces or is deflected into the stands outside the first or third base foul lines; or if it goes through or under a field fence, or through or under a scoreboard, or through or under shrubbery or vines on the fence; or if it sticks in such fence, scoreboard, shrubbery or vines;
In this ruling, the ball is dead as soon as the ball leaves the field of play or otherwise becomes unplayable. So long as the runner maintained his position in front of the other runner prior to the ball entering an unplayable state, he is entitled to advance.