Employees Sue Company After Unexpected Shutdown

A group of former employees filed a class-action lawsuit against Food Management Partners. Hometown Buffet, Ryan’s Buffet, Fire Mountain, and Old Country Buffet are owned by the same company which suddenly closed more than 160 restaurants without a warning and only afterward filed for bankruptcy. The federal law requires the employer to give a two weeks notice before a shutdown. 4 plaintiffs who are former employees of an Old Country Buffet in Illinois have recently filed a class-action lawsuit against Food Management Partners in federal court recently. They are accusing the company of violating the Worker Adjustment and Retraining Notification (WARN) Act by failing to give a 60-day notice of the closures. By filing the suit, the plaintiffs are seeking to reimbursement for the 60 days that the company was required to keep the locations working.

Notification Period
With three exceptions, notice must be timed to reach the required parties at least 60 days before a closing or layoff. When the individual employment separations for a closing or layoff occur on more than one day, the notices are due to the representative(s), State dislocated worker unit and local government at least 60 days before each separation. If the workers are not represented, each worker’s notice is due at least 60 days before that worker’s separation.

The exceptions to 60-day notice are:

  1. Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;
  2. Unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; and
  3. Natural disaster. This applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.

An employer who violates the WARN provisions by ordering a plant closing or mass layoff without providing appropriate notice is liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days. The employer’s liability may be reduced by such items as wages paid by the employer to the employee during the period of the violation and voluntary and unconditional payments made by the employer to the employee. An employer who fails to provide notice as required to a unit of local government is subject to a civil penalty not to exceed $500 for each day of violation. This penalty may be avoided if the employer satisfies the liability to each aggrieved employee within 3 weeks after the closing or layoff is ordered by the employer. The company is required to provide 60 calendar-day advance notification of the decision. Food Management Partners has given no notice before closing 92 locations. The employees cite their specific restaurant closures as being in violation of the WARN Act, claiming that at least 50 full-time employees were affected by the abrupt closure.

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