Earlier this summer, book lovers were sad to hear that Borders was going out of business and would soon be closing its doors. In Florida, we are losing 16 Borders stores including one here in Fort Lauderdale. Especially troubled by the news were the 11,000 employees losing their jobs at Borders.
But what is there to be done? No company means no employees, right? The answer is a bit more complicated. Even companies going out of business have a legal responsibility to end their business relationships by giving appropriate notice. That's why one former employee has filed class-action lawsuit alleging owed wage-and-hour claims.
A former employee from Ann Arbor, Michigan has filed a lawsuit on behalf of himself and 300 other Ann Arbor workers. The lawsuit, which was filed in the U.S. Bankruptcy Court in Manhattan, alleges that Borders violated the federal Worker Adjustment and Retraining Notification (WARN) Act.
The company publicly announced in July that it would be going out of business. Apparently, communication within the company was not as clear. The lawsuit alleges that employees in Ann Arbor were given no notice before they were laid off between July 23 and August 23.
Under the WARN Act, Borders was required to give employees 60 days' notice before conducting layoffs that would affect at least 33 percent of their workforce.
Because they received no notice, the plaintiffs are seeking compensation equal to 60 days of unpaid wages. They are also asking for similar healthcare benefits, pension contributions and other benefits.
It is understandable that things may get hectic and accidental omissions can be made when such a large national company prepares to shut its doors permanently. However, companies have a responsibility to their employees to communicate clearly and effectively, especially regarding employment status.
Source: Thomson Reuters Westlaw News, "Ex-employee sues Borders over mass layoffs," Nick Brown, Sept. 2, 2011