A former Telltale employee is suing the company in a class-action lawsuit, alleging that it violated labor laws on the books in California and nationwide when it laid off hundreds of employees on Friday in advance of a planned closure of the studio.
The complaint, filed Monday in federal court in San Francisco, is a class-action lawsuit submitted by Vernie Roberts on behalf of himself and his fellow laid-off workers. In the complaint, Roberts says Telltale — which is based in the San Francisco suburb of San Rafael, California — let go of the employees “without cause” and without providing them with “advance written notice as required by the WARN Act.”
The federal Worker Adjustment and Retraining Notification Act, which became law in 1988, stipulates that most businesses with at least 100 full-time workers must notify employees 60 days in advance of any plant closings or mass layoffs. The act defines a “mass layoff” as a reduction of 50 or more employees within a 30-day period (if the total comprises at least one-third of the company’s workforce), or any layoff of 500 or more workers. California’s state-level version of the WARN Act, which took effect in 2003, has more stringent requirements for businesses: It lowers the company-size threshold to 75 full- or part-time workers, and applies to any reduction of at least 50 employees. (Both the state and federal laws require advance notice of 60 days.)
Roberts’ complaint says the total layoffs at Telltale amount to approximately 275 employees. The figure appears to include the layoffs that occurred Sept. 21, which media reports pegged at about 250 individuals, as well as the skeleton crew of 25 that remains at the studio as it winds down operations. Telltale terminated the employees without providing any severance, according to the complaint. The laid-off individuals are reportedly receiving health benefits only until the end of the month.
Under the WARN Act, businesses that undertake plant closings or mass layoffs with fewer than 60 days’ advance notice are subject to significant financial penalties. Rather than pay fines, a company must give affected employees back pay and benefits for each day of violation. Roberts’ complaint says Telltale gave no advance notice of the cuts, which would mean that Telltale would have to give each of the 275 employees salary and benefits for a full 60 days following their termination, if the plaintiffs win the lawsuit.
The plaintiffs are requesting a jury trial, and are seeking to win the aforementioned compensation for the laid-off employees: an amount equal to the wages and benefits that the workers would receive if their employment continued for 60 days after their termination, plus interest, in accordance with the federal and California versions of the WARN Act.
We’ve reached out to Telltale for comment, and will update this article with any information we receive. For more on the lawsuit, you can read the complaint in full below.
Update: Telltale may be able to fight the lawsuit on the basis of the federal WARN Act, but it will likely have a tougher time defending its actions according to the California version of the law, reports GameDaily.
The federal law offers some exceptions for businesses, situations in which a company would be exempt from the 60-day advance notice provision. The exemptions include “business circumstances that were not reasonably foreseeable.” Variety reported Monday that Telltale was working to secure a round of financing, but that the last possible backer — which may have been Lionsgate, multiple sources told Variety — pulled out, forcing the studio to initiate shutdown plans and lay off most of the team.
GameDaily spoke with attorney Richard Hoeg, who said that in light of Variety’s reporting, Telltale may be able to cite the WARN Act’s “business circumstances” exception in its defense. However, noted Hoeg, the California counterpart to the WARN Act does not feature any such clause.
“The fact that California did not bring over the pertinent exemption would seem to put [Telltale] in a precarious compliance position with the state,” Hoeg told GameDaily.
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