Over 1,000 people with developmental disabilities will be able to leave sheltered workshops for competitive employment under a proposed settlement in a first-of-its-kind class-action lawsuit.

The U.S. Department of Justice said Tuesday that the state of Oregon has agreed to cut the number of adults working in sheltered workshops by nearly 400 and reduce hours worked in such settings by almost a third in the next two years.

Meanwhile, the state will provide 1,115 adults with developmental disabilities who are currently employed in sheltered workshops as well as 4,900 individuals with disabilities ages 14 to 24 with supported employment services so that they can obtain competitive employment over the next seven years.

The settlement comes in a 2012 case brought against top Oregon officials by residents with developmental disabilities and their advocates who alleged that the state violated the Americans with Disabilities Act by failing to provide supported employment services.

Without such services, the suit charged that residents with developmental disabilities were left to work in sheltered workshops for less than minimum wage. Plaintiffs in the case included individuals with disabilities who were employed in segregated settings despite past experience working at McDonald’s, Safeway and other establishments and a desire to work in community-based settings.

In 2013, the Justice Department intervened in the case, now known as Lane v. Brown, and helped to broker the settlement agreement reached this week.

“People with disabilities deserve opportunities to work alongside their friends, peers and neighbors without disabilities and to earn fair wages,” said Vanita Gupta, head of the Justice Department’s Civil Rights Division, in announcing the agreement. “We are pleased that the state of Oregon has fully embraced integrated employment services for people with intellectual and developmental disabilities and we look forward to the new ways people with intellectual and developmental disabilities will be able to contribute to their communities as this proposed agreement is implemented.”

Though the plan will reduce the number of people working in sheltered workshops in Oregon, a Justice Department fact sheet on the deal said that the goal is not to shutter such placements, but to ensure that “those who want to work in integrated settings have a realistic opportunity to do so.”

The lawsuit is the first ever to challenge a state-funded and administered employment service system for violating the integration mandate under the ADA, the Justice Department said.

Prior to reaching an agreement in the case, Oregon had taken steps to reduce its reliance on sheltered workshops and enhance competitive employment options for people with developmental disabilities.

“This is a big win for Oregonians,” the state’s Gov. Kate Brown said. “This settlement continues our commitment to ensure that all Oregonians are part of the economic recovery.”

The settlement must still be approved by a judge.

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