A Borders Group Inc unit failed to give its workers proper notice of mass layoffs when it announced plan to liquidate in July, a new lawsuit alleges.
Jared Pinsker, who worked at Borders Inc's Ann Arbor, Mich., headquarters until he was laid off in July, sued the bookseller in U.S. Bankruptcy Court in Manhattan on Friday, seeking to represent a class of about 300 Ann Arbor workers.
Pinsker says the federal Worker Adjustment and Retraining Notification (WARN) Act requires certain companies to give 60 days' notice before conducting mass layoffs of at least 33 percent of a given facility's workforce.
Pinsker and his colleagues received no notice when they were let go between July 23 and August 23, the complaint alleges.
The lawsuit is seeking damages equal to 60 days' unpaid wages, pension contributions, healthcare and other benefits. Pinsker is also requesting that recovery take the form of an administrative expense claim, which under federal bankruptcy rules would give it higher-priority status than other unsecured claims.
A lawyer for Pinsker could not be reached Friday evening. An attorney and a spokeswoman for Borders declined to comment.
The Borders parent filed for bankruptcy protection in February after being unable to withstand the growing popularity of online booksellers as well as e-readers such as Amazon.com Inc's Kindle and Barnes & Noble Inc's Nook. It announced in July it would go out of business and lay off its roughly 11,000 employees.
Multiple attempts to salvage at least a part of the business, including by selling assets to buyout firm Najafi Cos and fellow book retailer Books-A-Million Inc , failed after sides could not agree on terms.
The company is actively winding down its operations and is trying to find buyers for its real estate leases and intellectual property assets.
The bankruptcy case is In re Borders Group Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-10614. The lawsuit is Pinsker et al v. Borders Inc, in the same court, No. 11-ap-02586.
(Editing by Bob Burgdorfer)