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Hooters’ Abrupt, Virus-Driven Worker Layoffs Spark Lawsuit

April 17, 2020, 4:25 PM

Two ex-Hooters employees say the restaurant’s unexpected firing of nearly 700 workers in Florida amid the Covid-19 pandemic violated a federal law requiring advance notice of mass layoffs.

Hooters issued the first and only written notices on March 25, the date of termination, and didn’t give any justification for why it failed to notify the employees sooner, according to a lawsuit filed Thursday in Florida federal court. The unexpected layoffs “had a devastating economic impact” on those affected.

Ashton Scott and Amanda Seals, who worked at Hooters locations in Florida, sued under the Worker Adjustment and Retraining Notification Act, commonly known as the “WARN” Act, on behalf of 677 other full-time employees who were fired without any advance notice or cause.

The WARN Act generally requires businesses that employ more than 100 workers to give them at least 60-days’ notice of plant closures or mass layoffs, unless they can prove they were caused by “unforeseen business circumstances” or natural disasters.

It’s unclear if the Covid-19 pandemic would automatically qualify as such an event under the WARN Act, but attorneys say that employers are still obligated to send out mass-layoff notices as soon as possible, even if they’re exempt.

Hooters not only gave “zero days advance notice,” it went ahead with the layoffs despite having other viable options, the lawsuit says. For example, the federal Paycheck Protection Program, which got a $349 billion boost in April from Congress’ third virus response package, provides loans for certain employers to help keep workers on payroll during the pandemic.

On March 26, the day after the alleged Florida layoffs, Hooters’ CEO Terrance Marks said in an online statement that the restaurants “had no alternative but to dramatically reduce” their workforce to address the “economic impact of the virus,” which had already slashed revenues by more than half.

The lawsuit was filed in the U.S. District Court for the Middle District of Florida.

For additional legal resources, visit Bloomberg Law In Focus: Coronavirus (Bloomberg Law Subscription).

Cause of Action: WARN Act.

Relief: Wages, salary, commissions, bonuses, accrued vacation and personal leave pay, pension, 401(k) contributions, health, medical insurance and other fringe benefits for 60 days; any medical expenses incurred during the 60-day period following termination; class certification; attorneys’ fees and litigation costs; interest; and any other relief the court deems proper.

Potential Class Size: “Approximately 679 members.”

Response: Hooters didn’t immediately respond to a request for comment.

Attorneys: Wenzel Fenton Cabassa PA and Justice for Justice LLC represent the proposed class.

The case is Scott v. Hooters III Inc., M.D. Fla., No. 20-cv-00882, 4/16/20.

To contact the reporter on this story: Kathleen Dailey at kdailey@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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