ITT Tech Class Action Lawsuit Filed After Mass Layoffs

Go here for the Nvidia Graphics Card settlement. 

Two former ITT Tech employees have filed an employment rights class action lawsuit on behalf of the employees affected by the school’s abrupt shutdown.

Plaintiffs Allen Federman and Steve Ryan claim their former employer ITT Educational Services Inc. violated federal and California laws by terminating its employees without giving them at least 60 days advance notice.

The plaintiffs allege the for-profit school’s sudden and widely publicized shutdown on Sept. 6, 2016 constitutes a mass layoff or plant closing governed by the federal Worker Adjustment and Retraining Notification Act, or WARN Act.

The resulting employment losses triggered a duty under the WARN Act for ITT Tech to give affected employees 60 days advance written notice of their terminations, the plaintiffs say.

They claim that by announcing the terminations on the same day they were effective, ITT Tech failed to give its employees the required notice.

The plaintiffs now argue that the affected employees are entitled to 60 days worth of “wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation,” plus pension and 401(k) contributions and benefits under COBRA.

They also claim the ITT Tech shutdown violated parallel provisions of the California Labor Code. Those provisions require giving additional 60-day notice to certain state and local officials, as well as to affected employees.

The state Labor Code provides for damage awards for affected employees and civil penalties of not more than $500 per day for each day of the violation, the plaintiffs say.

ITT Tech announced its closure suddenly amid federal and state investigations into the school’s marketing, recruiting and financial practices.

The school continues to face ongoing enforcement actions by the Consumer Financial Protection Bureau and the Securities and Exchange Commission over allegations that it deceived students into taking on private loans with high interest rates and used questionable enrollment tactics.

The Department of Education demanded ITT Tech put up $152 million to guarantee federal funding, after the Accrediting Council for Independent Colleges and Schools raised questions about the school’s “administrative capacity, organizational integrity, financial viability and ability to serve students in a manner that complies with ACICS standards.”

According to the ITT Tech class action lawsuit, Federman worked at ITT Tech headquarters in Indiana as a business analyst.

Ryan says he worked as an ITT Tech instructor, splitting time among three different school locations in California.

Both plaintiffs say they lost their jobs because of ITT Tech’s Sept. 6 shutdown.

Federman and Ryan’s proposed “WARN Class” would represent all persons who worked at ITT Tech facilities and were terminated without cause as a result of the Sept. 6 layoffs.

The plaintiffs estimate this Class will contain about 8,000 Class Members. They also propose a separate “CAL WARN Class” consisting of plaintiffs bringing claims under the California Labor Code, with Ryan as their Class representative.

They seek a judgment providing them and all other affected employees with 60 days worth of compensation and benefits in accordance with the WARN Act, plus interest, court costs and attorneys’ fees.

The plaintiffs are represented by attorneys Christopher D. Loizides of Loizides PA and Jack A. Raisner and René S. Roupinian of Outten & Golden LLP.

The ITT Tech WARN Act Class Action Lawsuit is Federman, et al. v. ITT Educational Services Inc., Case No. 1:16-cv-00780, in the U.S. District Court for the Distritct of Delaware.