Red Lobster Hospitality LLC violated federal and New Jersey employment laws by laying off workers without notice, a new potential federal class action alleges.
The lawsuit stems from the company’s closure of dozens of its locations around the country days before filing a petition for reorganization in bankruptcy.
Lead plaintiff Donna Lowe was terminated without prior notice on or around May 14, 2024, according to the complaint filed May 17 in the US District Court for the Middle District of Florida.
The company violated the federal Worker Adjustment and Retraining Notification Act, known as the WARN Act, and the Millville Dallas Airmotive Plant Job Loss Notification Act, known as the New Jersey WARN Act, by failing to give 60 days advance written notice, Lowe alleges.
The suit seeks certification of a nationwide class and a New Jersey subclass of Red Lobster employees who were fired “on or around May 14, 2024, or whose employment was terminated as a reasonably foreseeable consequence of the mass layoff on or around May 14, 2024.”
The company listed both assets and liabilities of $1 billion to $10 billion in its bankruptcy petition. The filing allows the company to keep operating while it works out a plan to repay creditors. Red Lobster plans to hand control of the company to its lenders, who have agreed to provide $100 million in financing to support the chain through bankruptcy.
The restaurant chain had been deteriorating for several years, with diners down around 30% since 2019, Chief Executive Officer Jonathan Tibus wrote in court papers. While the business had shown signs of recovery since the pandemic, sales declined sharply in the last 12 months, Tibus wrote. It lost $76 million in the 2023 fiscal year.
Red Lobster didn’t immediately respond to a request for comment.
The complaint seeks declaratory and injunctive relief, damages, attorneys’ fees and costs.
