When you're in front of your employer and you're given a choice between "resign" or "be terminated", there's most definitely an element of coercion involved, especially when they make it clear that one option (termination) means he's not going to be employable by any other city in the area. While a person DOES technically have a choice here, there are consequences to either action which bear a direct impact upon the person's employability and benefits. How much those consequences weigh to the individual is based on how much either one impacts their financial situation.
And that, in my opinion, makes it "forced".
Virginia is an "employment at will" state...meaning termination can be for any reason, or no reason at all, so long as the termination isn't for something based on race, color, national origin, sex, pregnancy, religion, age, disability, or citizenship. So Portsmouth will have to be careful about the reason(s) why...because if it pertains to something that federal, state, or other jurisdictional law says a person has a right to enjoy the benefits of, then they'll likely lose. On the face of things, it would appear that not only does the claimant have the right under law, what this is over didn't even pertain to his employer as it wasn't located at the place of business or within company vehicles.
Of course, we only know what the article says...and we all know that isn't likely to be the full picture.