ITT Tech closed all campuses this week. Employees may have a class action lawsuit. The sudden closure is because of a recent decision by the Education Department to ban ITT from accepting new students who use federal student loans.
WARN – Advanced Notice Required
ITT Tech is subject to the “Worker Adjustment and Retraining Notification Act.” This federal law is commonly referred to as WARN and requires employers to give at least 60 days advanced notice of closings or mass layoffs. Employers are covered under WARN if they employ more than 100 employees.
Employers who violate WARN by failing to provide advanced notice are liable to each employee for back pay and benefits for a period up to 60 days. ITT Tech may have to pay each of its 8,000 employees back pay and benefits for a 2 month period. ITT Tech employees can sue for violations of WARN in Federal Court.
Class Action Lawsuit For Employees
ITT Tech will likely face a class action lawsuit for employees because the most a single employee could recover is only 60 days of back pay and benefits. Collectively, a class action lawsuit could be worth millions. A class action lawsuit is a single lawsuit brought on behalf off all similarly situated employees. In other words, a single case on behalf of the 8,000 or so employees who weren’t given advance notice of the shut-down in violation of WARN.
If a class action is certified and a final judgment is awarded, collectability still must be considered. If ITT Tech is broke are they going to be able to pay their creditors and satisfy a final judgment at the same time? Usually, judgment creditors are paid in order of priority. It is entirely possible that a class action final judgment be entered for millions of dollars and ITT Tech never have the ability to pay. Also, judgment liens may be dischargeable in bankruptcy.
Then again, ITT Tech may have sufficient assets or liability insurance in place that would cover their exposure. It’s certainly worth examining ITT Tech’s financial health to see if they can satisfy a judgment. Nothing is worse then going the distance to get a final judgment only to find out the defendant can pay their debts.
For More Information
The Longo Firm, P.A.
Micah J. Longo
12555 Orange Drive, Ste. 233
Davie, FL 33330
Tel: (954) 862-3608