Virginia Employment Commission Agrees to Pay $200,000 in Legal Fees After End of Lawsuit over Unemployment Insurance Claims Backlog

Inside DMV, people standing in line

The Virginia Employment Commission (VEC) has agreed to pay $200,000 in legal fees to organizations that led a 2021 lawsuit over delays in employment claims processing.

In a press release, the VEC said, “After the May 25, 2021, settlement, Legal Aid subsequently sought an award of attorneys’ fees on February 1, 2022, for its work in connection with the case. After a mediation on April 20, 2022, regarding the issue of attorneys’ fees, the parties have agreed to resolve the matter for $200,000. This amount is less than the total amount of attorneys’ fees sought by Legal Aid in this case.”

In 2020 during the first two months of the pandemic, new unemployment insurance (UI) claims spiked by a factor of 34, hitting 236,000 in April 2020, while continued weekly claims increased by a factor of 13 hitting 1.3 million, according to a Joint Legislative Audit and Review Commission report. That coincided with closed offices and a major increase in VEC employee overtime.

Gradually, the crisis began gaining broader attention in Virginia, highlighted by a massive backlog in processing certain claims that required extra adjudication. Legal Aid Justice Center (LAJC), Virginia Poverty Law Center, and Legal Aid Works filed a lawsuit on behalf of would-be UI recipients, leading to the May 2021 settlement and an executive order requiring faster claims processing and more call center staff. Throughout 2021 the court and the plaintiffs monitored the VEC’s progress on meeting the May 2021 settlement terms. In November, the plaintiffs and the VEC filed a new status report with additional benchmarks.

Then, in January 2022, the judge ordered the VEC and the plaintiffs to file a joint order dismissing the lawsuit.

“Judge Hudson directed the parties to file a joint dismissal order, which the parties did on January 4, 2022. Judge Hudson indicated that he believed that Cox v. Hess had achieved all it could do, on the specific issues raised in the case,” LAJC states on its website.

“The case expedited deputy decisions on hundreds of thousands of cases, in the summer in 2021,” LAJC’s case update page states. “It restored benefits to at least 50,000 people – and likely significantly more – who had been cut off benefits without due process, with more than $200 million (and likely much more) restored to these Virginians. It helped Virginia adopt policies to assist Virginians frozen unjustifiably for inaccurate fraud allegations against them, or for fraud committed against them by others. It also helped shine a spotlight on the unemployment insurance crisis in Virginia, built media and public pressure, and encouraged the state to look toward additional reforms.”

In a statement to the media, LAJC Senior Attorney Pat Levy Lavell said, “Yesterday, the VEC acknowledged that they owed attorney’s fees in Cox v. Roth, because plaintiffs were prevailing parties. This case achieved important progress for thousands of Virginians struggling with unemployment. Yesterday’s fee settlement helps fund legal aid’s work on behalf of low-income Virginians. Although the case is formally closed, ongoing reporting continues, and Legal Aid Justice Center and other advocates remain committed to seeing progress in Virginia’s unemployment system. We know that many people are still suffering, and that is a problem that requires resolution.”

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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
Photo “Waiting in line” by Jay Cross CC 2.0.


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