Ernest Ray worked for a company that made compressors in southwest Virginia for 26 years, in a physically demanding job that included night shifts on a factory floor. Ray applied for and received approximately $9,000 in unemployment benefits when the plant closed in 2018.

Ray is still fighting the Virginia Employment Commission in court three years later, as the agency tries to recoup the money. As Ray’s pro bono attorney sees it, the case exemplifies the ethos of a radically dysfunctional agency.

For the past year and a half, the agency has been scrutinized for a response that, by some measures, was among the worst in the country to a surge in jobless claims caused by the coronavirus pandemic. However, cases like Ray’s, interviews with attorneys, and state audits show that the agency had been plagued with a variety of issues for years prior to the pandemic; they were simply brought to the forefront when hundreds of thousands of workers suddenly needed help.

Republican Gov.-elect Glenn Youngkin campaigned on a promise to reform the agency, and Virginia Labor Secretary Megan Healy, who now oversees it, says some issues are structural. She claims that the agency has long lacked adequate resources as a result of a complicated federal funding formula that pays out less when the economy is strong and also penalizes the agency’s inefficiencies. Outside reviews have warned of problems dating back nearly a decade, including major record-keeping issues, low staff morale, and filthy facilities.

During the pandemic, the agency was slow to establish certain benefit programs and allowed case backlogs to build up, prompting a class-action lawsuit. An eight-year-late information technology modernization project exacerbated the situation, leaving claimants reliant on physical mail and call centers that, according to a recent audit, were still only answering 12 percent of calls.

The audit discovered that Virginia, which has relatively limited benefits, also has shockingly low recipiency rates among the unemployed, with the third-lowest average rate in the country over the last two decades.

According to President Joe Biden’s administration, the pandemic exposed long-standing flaws in the nation’s unemployment insurance system, which requires comprehensive reform.

Ray’s problems with the agency began long before it was inundated with pandemic-related claims.

Ray, who has been deaf since birth, spent decades at Bristol Compressors building complex machinery. During his shifts, he wore safety glasses, gloves, an apron, and steel-toed boots, which became even heavier when soaked in leaking coolant, Ray explained in an interview with his niece interpreting.

Former coworker David Woodring described him as a “gentleman” and an honest “top-of-the-line guy” who never missed work and did a job that required a high level of skill. Ray earned approximately $36,000 per year during his final year of employment at the company, which closed despite receiving millions in taxpayer-funded incentives. Ray’s earnings qualified him for $378 per week for 24 weeks, according to case records.

Ray, 57, with worn hands and a large white beard, began receiving those benefits without issue, began looking for a new job, and drove about 30 miles (48 kilometers) each way to an employment commission office in Bristol to meet the state’s weekly work-search documentation requirements. He didn’t have a computer, so he couldn’t complete the paperwork online.

When his benefits expired in May 2019, staff instructed him to continue reporting his job-search details for unknown reasons. Ray was then absent for one week due to a minor illness. After presenting a doctor’s note, he was informed that he had been deemed unable to work —an applicant must be eligible to work to receive benefits — “due to medical reasons” and had received his payments in error. The state wanted the money back.

Ray filed an appeal, but it was three weeks late, according to his lawsuit. He struggled to read the tiny print of the agency’s notice and understand the bureaucratic language because he was only fluent in American Sign Language.

Ray’s case has since made its way through the appeals process of the Employment Commission. The state has fought him at every stage on the basis of his late appeal, not the merits of the case. According to O’Donnell, the commission never explained its reasoning for seeking repayment, blaming Ray at one point for alleged lack of diligence.