A former employee of EverGreen RVs has filed a lawsuit against the defunct Middlebury, Ind.-based RV maker, alleging the company did not provide adequate notice before it dismissed about 270 full-time workers as it wound down operations in June.
In the July 15 complaint, former EverGreen regional sales manager alleges that the company violated the federal Worker Adjustment and Retraining Notification Act (WARN Act), a law that requires certain employers to give 60 days’ notice before large-scale layoffs.
The lawsuit, filed on behalf of the full-time employees dismissed in the layoffs, awaits ruling on certification as a class action.
The WARN Act specifies that eligible companies file written notices with affected full-time employees, the state dislocated worker unit and local governments.
EverGreen RVs filed at least one such notice with the Indiana Dept. of Workforce Development on June 14, four days after the company laid off two-thirds of its full-time workforce, according to the schedule disclosed in the document.
The complaint, which estimates 270 former employees are potential class members, seeks 60 days pay and benefits for each employee. It does not state when, or if, employees received notice of the terminations aside from the document filed with the Dept. of Workforce Development.
Additionally, the complaint attempts to show that Kelly Rose and Mike Schoeffler operated EverGreen through a pair of separate limited liability companies, KR Enterprises and JMA. Both companies are listed as defendants in the lawsuit.
“Defendants KR (Enterprises) and JMA exercised de facto control over the labor practices of EverGreen including the termination of plaintiff and class members, by controlling the decision to effect mass layoffs or plant closings at the facilities,” the legal team writes in the complaint.
Though the WARN Act specifies the 60-day rule, it allows for a few exceptions. Specifically, the law permits companies to give less notice of layoffs if the company “was actively seeking capital or business which, if obtained, would have enabled the employer to avoid or postpone the shutdown … and in good faith believed that giving the required notice would have precluded the employer from obtaining the needed capital or business.”
Another exception is permitted when companies face business circumstances that were not reasonably foreseeable at the time that the notices would have been required.
In both cases, the law warns employers relying on exceptions to “give as much notice as is practicable and at that time shall give a brief statement of the basis for reducing the notification period.”
In the WARN notice filed by EverGreen, then-CFO Joseph Katona does not specifically mention an exemption, but says that, “over the last several months, EverGreen RVs has been actively seeking capital or business to continue its operations. In particular, EverGreen RVs has been engaged in negotiations with various creditors and lenders seeking financing or refinancing.”
The most recent action in the case was on July 18, when the court issued a summons that was not made available to the public.