SmileDirectClub is facing a class-action lawsuit that alleges the company violated the WARN Act when it laid off its employees during its shutdown.
SmileDirectClub announced it would be shutting down its global operations immediately Dec. 8 after efforts to recapitalize the business failed.
The plaintiff, Shelia Fatty, filed the lawsuit on behalf of the company’s approximately 1,000 other employees in the U.S. Bankruptcy Court for the Southern District of Texas Houston Division. The lawsuit alleges that employees were immediately let go from the company without advance notice, allegedly violating the Worker Adjustment and Retraining Notification Act.
The WARN Act ensures advance notice in cases of closings and mass layoffs affecting at least 50 employees at a single site of employment. Under the law, companies with at least 100 employees are required to provide written notice at least 60 calendar days in advance of these events. Employees who have worked less than six months in the last 12 months and who work an average of less than 20 hours a week do not count toward that total.
Source: SmileDirectClub violated WARN Act with layoffs, lawsuit alleges / Becker’s Dental + DSO Review