A federal lawsuit forces Virginia to own its duty to handle pandemic jobless claims promptly

Amber Dimmerling is scared. She’s angry, too. And she has every right to be.

Left jobless when the pandemic crushed the restaurant industry  14 months ago, the 40-year-old single mother did her best to make ends meet and care for her 12-year-old daughter with the weekly Virginia unemployment insurance benefits she initially received.

Last September, however, those benefits stopped without explanation. She’s had no chance to appeal her case — rich with documentation — to a human arbiter in the eight months since.

Dimmerling is among thousands of Virginians who have lived for months with the daily panic of impending financial doom because of the Virginia Employment Commission’s lagging performance in dealing with contested pandemic unemployment claims within the 21 days as prescribed by federal law.

According to data from the U.S. Department of Labor, for each full quarter since the pandemic began Virginia has ranked at or near the bottom against other states in the percentage of “nonmonetary determinations of claimants” within the required three weeks.

That’s bureaucratic jargon that means people whose unemployment insurance claims have been called into question or have prompted other concerns. For instance, employees who quit without good cause or are fired for misconduct are generally ineligible for benefits. Those separated because of layoffs — particularly in the pandemic — are eligible. Sometimes, employers will object to a former employee’s claim, and specialists known as “deputy adjudicators” decide who’s right.

If that can’t be done in 21 days, it’s a violation of law, said Pat Levy-Lavelle, an attorney with the Legal Aid Justice Center. And that’s at the heart of Virginia’s dispute: rather than promptly receiving benefits or an appealable deputy’s determination denying them, they’ve fallen into a black hole where they go months with neither a payment, due process nor an explanation.

For the first quarter of this year, Virginia had adjudicated only 2.4 percent of such non-monetary claims within 21 days, the lowest ratio in the nation. The national average for the quarter was 42.9 percent.

It’s a black eye for a state once lauded for businesslike efficiency and sound management in government. But far more consequential than the commonwealth’s reputation is the wholesale human suffering this failure has occasioned.

“I just don’t think they care because they’re getting a paycheck,” said Demmerling, now a lead plaintiff in a class action lawsuit against the VEC. “Until they see somebody in this circumstance or hear their story, they really don’t care.”

The lawsuit isn’t the only bright light being focused on VEC. The General Assembly’s investigative arm, the Joint Legislative Audit and Review Commission, is doing its own inquiry.

The most charitable explanation seems to be state government’s mystifying failure to recognize a massive once-a-century global crisis for many months and respond with sufficient staff, resources and urgency.

While other states launched wholesale efforts to bulk up their corps of deputy adjudicators, Virginia took a deer-in-the-headlights approach, according to Levy-Lavelle, one of 11 attorneys from five firms and nonprofit legal services organizations who filed the complaint in U.S. District Court in Richmond a month ago.

“Virginia has known about this problem and we’re still at the bottom. We haven’t taken the bold steps that other states have taken to significantly ramp up their adjudication capacity,” Levy-Lavelle said.

Maryland, by contrast, processed 27 percent of its nonmonetary claims within the 21-day time window during this year’s first quarter — a rate more than 10 times greater than Virginia’s. Perhaps that’s because Maryland immediately signed a huge contract with a temporary staffing agency for 400 additional deputy adjudicators to supplement that state’s existing employment agency capacity, Levy-Lavelle said.

And Virginia?

As of Thursday, the commonwealth had “a little over 100 and signed a contract for 300 who start in waves next week,” said Megan Healy, Gov. Ralph Northam’s cabinet-level chief workforce advisor who, on July 1, becomes Virginia’s first secretary of labor.

Nor does it help that the VEC still labors with a computer system that first hit the market when Jimmy Carter was in the White House and playing “Space Invaders” on an Atari console was the zenith of video gaming. The agency was on the cusp of installing a newer system when the pandemic lockdown waylaid the project, which is due to begin soon and should help ease the backlog once installed.

Levy-Lavelle says he brought all those concerns to the attention of state officials last fall, and copies of correspondence reflecting those early discussions filed as exhibits in the lawsuit corroborate it. In a Nov. 6 letter to VEC Commissioner Ellen Marie Hess, he notes that the U.S. Labor Department sets as its benchmark for determinations on nonmonetary eligibility issues within 21 days should be 80 percent.

Further, cases such as Dimmerling’s in which benefits that were being paid got terminated “without notice or hearing” are equally grievous and troublesome, he wrote.

“We reached out to the governor’s office before we filed this case and we hoped he would take this crisis seriously,” Levy-Lavelle said. “His staff’s initial response was that they wanted to sit down and talk with us, and when I then presented them with a detailed list of questions and solutions following a first meeting, they turned around and told us that they had decided to the contrary, that they’d be happy to give us periodic updates, but they weren’t willing to talk in detail about solutions.”

Those discussions are finally under way at the insistence of U.S. District Judge Henry Hudson, who has urged the parties to quickly reach a settlement to expedite VEC’s handling of thousands of backlogged cases. He has twice extended a deadline for the commonwealth to file its answer to the complaint to allow the talks to continue. The most recent came a week ago when Hudson gave the state until May 20 to accommodate “discussions which the Court believes may be fruitful.”

Healy recalls a different initial encounter between Northam’s office and the plaintiffs’ lawyers. She said the administration wasn’t contacted until a week before the suit was filed. She said a “substantial discussion” resulted in a “a follow up email saying the VEC was willing to meet with LAJC and other stakeholders weekly to discuss claimants and data.”

She also contests the last-in-the-nation narrative and accurately offers Labor Department stats in rebuttal. They show that through the brunt of the pandemic — April of 2020 through this March — Virginia processed first payments within 21 days 84.3 percent of the time. That’s the sixth-best rate in the nation.

First payments, however, aren’t the problem. The wheels fall off when the avalanche of contested “nonmonetary” issues require investigations and dispositions from a thin and overwhelmed cadre of deputy adjudicators. They review instances in which claimants incorrectly fill out applications or an employer disputes the conditions under which an employee departed and payments cease, as Dimmerling’s did.

For a while, she received congressionally approved $300 supplemental unemployment after the restaurant in McLean where she lived and worked was shuttered by the pandemic. Dimmerling and her daughter moved in with Dimmerling’s mother in Fredericksburg and, as the pandemic’s grip loosened, she was offered a two-day-a-week opportunity to return to work in McLean. At a $12 hourly wage, her 110-mile round-trip commute on Interstate 95 and childcare costs would leave her in the hole, so she declined. Then, in autumn, her benefits stopped.

She marshaled volumes of records and documentation and submitted it all to the VEC. She began calling, repeatedly each day, as well as emailing the agency – all to no avail. Finally, she sought legal help from Levy-Lavelle and the LAJC. Dimmerling’s records were just what LAJC needed to give its litigation teeth.

“We were looking for plaintiffs and a letter came in the mail that was slipped under my office door at work,” Levy-Lavelle said. “I opened the letter and I saw that she had been trying to get through to the VEC for a very long time and had documented things pretty clearly. She had exactly the same challenge that a lot of people had: they were getting benefits and were cut off by the VEC without any kind of due process.”

It’s beyond shameful that the law and the courts have become a necessary last resort to force the state to follow the law and do its job.