Agreement reached to end lawsuit over Virginia Employment Commission delays

RICHMOND, Va. (WRIC) — The Virginia Employment Commission and legal advocacy groups that sued the agency on behalf of five residents have reached an agreement to dismiss the federal lawsuit over the VEC’s struggle to promptly settle disputed jobless claims.

In April, five Virginia residents struggling to get the unemployment benefits they sought sued VEC Commissioner Ellen Marie Hess in federal court in Richmond. The class-action lawsuit alleged the VEC violated claimants’ rights for not responding to complaints and abruptly putting people’s benefits on hold without quickly adjudicating disputed claims. 

After months of sharing information and acknowledging VEC’s progress on resolving unemployment claims quicker, the parties filed an order to end the lawsuit. The judge overseeing the case will still have to sign off on the proposed agreement.

“The Court hereby FINDS that the VEC has met or substantially achieved the various performance standards and benchmarks set forth in the Settlement Order and the Parties’ subsequent progress reports related to the processing of unemployment claims and communication with claimants,” the order states.

The commission was required to “substantially resolve at least 95%” of the 92,158 unpaid claims awaiting adjudication as of May 10 under the settlement agreement. The state agency reported that it cleared that specific backlog a month before it was required to do so, but U.S. District Judge Henry E. Hudson denied the VEC’s dismissal request in November after the plaintiffs claimed the backlog was growing.

In a status report to the court, the VEC agreed to resolve at least 95% of the pending unpaid claims that have come in since May 10 and through Oct. 15. The state had until Nov. 19 to clear the backlog and had until Nov. 30 to file a status report addressing the VEC’s compliance.

During a conference call on Dec. 14, U.S. District Judge Henry E. Hudson directed the legal teams for VEC and the plaintiffs to prepare an order of dismissal for the court to review.

Despite noting that VEC has complied with the settlement order and has made progress on adjudicating claims, legal groups working for the plaintiffs stressed that more work needs to be done to help ensure the agency is prepared for any future issues.

Pat Levy-Lavelle is an attorney for the Legal Aid Justice Center, a group working alongside the Virginia Poverty Law Center, Legal Aid Works, Consumer Litigation Associates and Kelly Guzzo, PLC, on behalf of the plaintiffs.

“The lawsuit did a lot of good to help people waiting without benefits, but it would be a mistake to think we are packing up shop,” Levy-Lavelle said in an interview. “This is definitely not the end of the story.”

Under the proposed order, the parties will continue to work together and share information “to address and resolve identified issues in a manner that the Court concludes will no longer require its oversight.”

Levy-Lavelle also pointed that the court has acknowledged how the lawsuit raised awareness on issues regarding Virginia’s processing of unemployment benefits. He told 8News the legal advocacy groups have tracked the results and found that at least 50,000 Virginians who were abruptly stripped of benefits during the adjudication process have received benefits that they were entitled to since the lawsuit was filed.

VEC spokesperson Joyce Fogg declined to comment on the pending dismissal, but told the Richmond Times-Dispatch Wednesday that the agency “is pleased that the case has been dismissed.”

A report from the state’s watchdog agency made public in September found that VEC was dealing with unprecedented stress during the pandemic but that the agency was not prepared to handle the huge spike in unemployment claims.

Check back for updates.