The for-profit college ITT Technical Institute is closing the doors of its schools, which are located in 38 states. This company shutdown impacts some 8,000 employees on 130 campuses. ITT Tech has said that it made the decision to close because it can't comply with sanctions recently handed down by the U.S. Department of Education.
Late last month, the DOE prohibited the Indiana-based college from allowing new students receiving federal aid to enroll because it was determined to be a risk to taxpayers as well as students. ITT Tech was ordered to pay the government $152 million within a month if it closed to cover liabilities and student refunds.
Plaintiffs Allege That Federal, State Laws Weren't Followed
Now the company is facing a federal lawsuit from former employees. The two plaintiffs, an instructor and a business analyst, who filed the suit claim that ITT Tech violated federal law because it didn't provide 60 days' notice to its employees that they would be losing their jobs. Under the federal Worker Adjustment Retraining and Notification Act, employers who have more than 100 staffers and sites with over 50 employees must provide workers with at least sixty days written notice before any plant closings or major layoffs.
Sixty days is also the minimum required notice under California labor laws. ITT Tech has 15 campuses throughout California.
ITT Tech isn't the first for-profit college to close its doors after the federal government stopped providing aid. The same thing happened to Corinthian College in April 2015. In fact, one attorney representing the ITT Tech plaintiffs also represented people who had worked for Corinthian after that school shut down.
Class-Action Status Sought for the Suit
The attorneys, who are seeking class-action status for the suit, are asking for benefits that would have been paid to employees if the college had given the required 60 days notice. These include "unpaid wages, salary, commissions [and] bonuses."
Many companies have undergone massive layoffs over the past decade as the economy has experienced downturns and changes. It's understandable for employees to assume that their employers are following the applicable laws in managing these layoffs. However, sadly, that's not always the case. When they don't, employees have every right to take legal action to obtain the wages and benefits to which they're entitled. Sometimes a class-action suit is the most efficient and least expensive way to go about taking that action.
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