Jenny Craig employees file a class-action lawsuit claiming the company violated the WARN Act
Jenny Craig employees are seeking to join a class-action lawsuit alleging the company violated federal and state WARN Acts, which require companies to give employees a 60-day notice ahead of any mass layoffs or facility closures.
The lawsuit was filed in the New Jersey District Court on May 4, two days after the company sent an email to its employees announcing it would fully close. The WARN Act requires companies with 100 full-time employees or more to notify both the local and state governments, as well as its employees, 60 days before mass layoffs or closures. The complaint estimates hundreds of employees could be covered by the lawsuit.
Some Jenny Craig employees received a WARN Act notice on April 25. One week later, Jenny Craig told its employees it would close the entire company by May 5.
In an FAQ note sent to Jenny Craig employees and obtained by NBC News last week, the company told the staff, “Legally, per the Warn Act, employees reporting to the Corporate Office and NJ centers are entitled to pay for the full Warn Act notice period. However, as the financial status of the company is still in flux, it is not clear whether the separation date may be before 6/24 for Corporate and 7/24 for NJ centers and could be as early as next Friday 5/5. If it is before the full Warn Act notice date, we may not be in a position to continue payments to the employees for the full warn notice period.”
The FAQ note also told employees that they may not be paid for the full 60 days from the WARN Notice if the company chose to shut down before then, which the company ended up announcing a few days later.
In termination letters sent earlier this week, Jenny Craig told employees they would receive “full compensation earned through your last day of work and all accrued, unused paid time off” but, according to the FAQ and Jack Raisner, one of the attorneys for the employees, the laid-off employees are owed pay through the 60 days. Raisner said the notice Jenny Craig sent to employees was essentially a “head fake” that didn’t guarantee the company would remain open for the full 60 days after the notice, as required by the WARN Act.
“It’s important to people,” Raisner said of the remaining money not paid to employees because of the earlier-than-expected layoffs. “It throws people into an enormous upheaval and free fall actually.”
No one at HIG Capital, the $55 billion private equity firm which acquired the weight loss company in 2019, or Jenny Craig could be reached for comment on the lawsuit.
The employees are seeking pay for the full 60 days since the original notice was sent, as well as the monetary value of the benefits they would have enjoyed during that time. The WARN Act has been adapted to have stricter requirements in some states. In New Jersey, a new version of the WARN Act requires laid-off employees receive one week of severance for every year of service.
Employees and legal experts said all signs of layoffs and closure notices point to a bankruptcy filing soon from JC USA, Inc.