Oregon Employment Department agrees to settle class action lawsuit

By Kate Davidson (OPB)
Feb. 4, 2021 12:33 a.m.

The agency was sued over “unreasonable” delays paying unemployment benefits during the pandemic. Now, it has reached a settlement agreement with the Oregon Law Center.

A class action lawsuit against the Oregon Employment Department over long delays paying unemployment benefits is headed towards settlement.

The Oregon Law Center and the Employment Department announced they had reached a settlement agreement and asked for preliminary court approval.


In the original case, more than a dozen people sued the agency and acting Director David Gerstenfeld over payment delays that stretched for months, as well as over barriers to applying for benefits in languages other than English. At the time, there wasn’t even a Spanish language application for regular benefits available online and phone lines with access to interpreters were jammed. After the agency largely paid the original petitioners’ benefits, the Oregon Law Center succeeded in turning the case into a class action lawsuit, representing tens of thousands of Oregonians who had waited more than four weeks for benefits.

In the proposed settlement agreement, the Employment Department commits to:

  • Meet federal timeliness standards for paying unemployment benefits by March 1, 2021
  • Meet federal timeliness standards for adjudicating claims (resolving eligibility issues) by April 1, 2021
  • Work through the adjudication backlog (as of mid-January) by March 1, 2021
  • Make its regular unemployment application available online in Spanish, with a May target date
  • Eventually provide online applications for regular unemployment benefits and Pandemic Unemployment Assistance in a minimum of ten languages
  • Provide outreach to people with limited English proficiency who were unable to access benefits because of language barriers, while allowing them to backdate claims to the extent allowed by law

Over the course of the lawsuit, the Employment Department described being overwhelmed by an historic flood of unemployment claims. It detailed the steps it took to process and pay them, including hiring hundreds of new staff.

But court documents filed in the case also revealed that the state’s adjudication backlog was larger than publicly described. That backlog contributed to the state’s immense wait times. Court documents also showed one of the steps the agency took to streamline the claims process: it decided to treat many gig workers as employees, paying them regular benefits from a state trust fund rather than federal benefits for independent contractors.

The Employment Department is not admitting liability as part of the proposed settlement and, in the settlement agreement, the agency denies being in violation of any laws.