A Red Lobster employee filed a class action lawsuit in the U.S. District Court for the middle district of Florida on May 17, alleging the company failed to provide workers with the 60-day notice required by the WARN Act, court records show. The suit also alleges the closures of units in New Jersey violated that state’s Worker Adjustment and Retraining Notification Act.
The suit seeks compensation for wages and benefits that ought to have been paid during the warning period. In Chapter 11 bankruptcy cases, an automatic stay prevents the enforcement of “all judgments, collection activities, foreclosures, and repossessions of property” for claims originating before the filing, according to a fact sheet from the judicial branch on Chapter 11.
According to Legal Aid At Work, employees have a priority claim for back pay, but are generally compensated only after secured creditors are compensated, meaning any payouts as a result of the suit may be fairly meager.
Red Lobster shut down scores of restaurants in mid-May and filed for Chapter 11 on May 19, several days after the bulk of the closures.
The suit, filed by a worker employed in New Jersey, alleges that management had assured employees at that location that the store was profitable and not in danger of closing.
