Lawsuit Alleges Video Game Company Violated Federal and State Labor Laws by Laying Off Most of Its Employees

New Jersey employment laws, as well as laws around the country, must balance the rights and interests of employees with those of employers. Employees’ protected rights include fair wages, reasonable hours, and a workplace that is reasonably safe and free of harassment and discrimination. Employers need to be able to pursue their business activities, to the extent that they do not violate the rights of their employees and others. Sometimes, businesses may determine that they need to lay off a significant portion of their workforce. This is within an employer’s rights, but laws at the federal level and in many states, including New Jersey, set strict limits. A recently-filed lawsuit alleges that a video game company violated the federal Worker Adjustment and Retraining Notification (WARN) Act of 1988 when it laid off all but twenty-five employees several months ago. Roberts, et al v. Telltale Games, Inc., No. 3:18-cv-05850, complaint (N.D. Cal., Sep. 24, 2018).

The federal WARN Act generally applies to employers with at least one hundred full-time employees. The statute’s requirements are triggered by two events: a “plant closing” or a “mass layoff.” The former refers to any closure of a facility that results in fifty or more employees at a single site losing their jobs within a period of thirty days; while the latter refers to any other incident that, in a thirty-day period, results in layoffs of (1) at least five hundred employees, or (2) at least fifty employees when that number accounts for one-third of all employees. 29 U.S.C. §§ 2101(a)(2), (3). New Jersey’s equivalent law is formally known as the Millville Dallas Airmotive Plant Job Loss Notification Act of 2007, and informally known as the NJ WARN Act. It uses the same definition of “mass layoff,” and uses the term “termination of operations” to refer to the same type of incident as a “plant closing.” N.J. Rev. Stat. § 34:21-1.

Both the federal and NJ WARN Acts require covered employers to provide written notice to employees or their representatives at least sixty days prior to a plant closing or mass layoff. 29 U.S.C. § 2102(a)(1), N.J. Rev. Stat. § 34:21-2(a). If an employer fails to provide the required notice under either statute, aggrieved employees may bring a civil action for damages. Federal law allows back pay, along with benefits subject to the Employee Retirement Income Security Act of 1974 (ERISA), for up to sixty days. 29 U.S.C. § 2104(a). The NJ WARN Act allows courts to award “lost wages, benefits and other remuneration” in an amount up to “one week of pay for each full year of employment.” N.J. Rev. Stat. §§ 34:21-2(b), 34:21-6.

The plaintiffs in Roberts worked for a video game developer known for games based on popular entertainment franchises like the television show The Walking Dead. The company announced in late September 2018 that it planned on shutting down all operations, and that it had already let most of its workforce go. Within days, the plaintiffs filed suit in federal court, alleging that the company violated both the federal WARN Act and its California counterpart by failing to give the required sixty-day notice.

The Resnick Law Group’s employment attorneys advocate for the rights of job seekers, employees, and former employees in New Jersey and New York in claims under state and federal employment statutes. Please contact us at 973-781-1204, at 646-867-7997, or online today to schedule a confidential consultation with a member of our team.

More Blog Posts:

How the “Gig Economy” Could Impact Wage and Hour Law Claims in New Jersey, The New Jersey Employment Law Firm Blog, October 15, 2018

Supreme Court Ruling Affects Collective and Class Employment Actions in New Jersey, The New Jersey Employment Law Firm Blog, July 10, 2018

New Jersey Law Requires Employers to Give Specific Notification to Employees During Layoffs and Other Major Upheavals, The New Jersey Employment Law Firm Blog, April 14, 2017

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