Telltale Games became a recognizable force in the gaming industry with wildly successful titles like The Walking Dead and The Wolf Among Us. However, the developer announced massive layoffs last week with the intention of shuttering the studio in the near future. A newly filed lawsuit claims the firings ran afoul of the WARN Act, which requires companies to tell employees in advance of mass layoffs.
According to the now-former Telltale employees, an all-hands meeting scheduled for last Friday resulted in hundreds of immediate layoffs. By the time workers returned to their desks, their employee G Suite accounts were deactivated, and they had just 30 minutes to leave the building. Unlike many technology companies, Telltale offered employees no severance and medical benefits are scheduled to expire at the end of this month.
So, that whole situation no doubt left a sour taste in many a mouth. According to the Worker Adjustment and Retraining Notification (WARN) Act, Telltale might have broken the law by doing it that way. The law from 1988 stipulates that a business with 100 or more employees must provide written notice 60 days in advance of a mass layoff. The act defines mass layoffs as the firing of 50 or more employees in a 30-day span, provided that amounts to at least a third of the workforce. California has an even more stringent version of the WARN Act that lowers the number of workers to 75 and includes part-time workers in the sum.
The lawsuit was filed by former Telltale employee Vernie Roberts on behalf of himself and the other laid-off workers. In the complaint, Roberts says Telltale fired about 275 people, which includes the 25 who have stayed on temporarily to finish work on the last chapter of Telltale’s Walking Dead series.
The WARN Act seeks to recognize that large businesses don’t usually decide one day to fire dozens of employees. Someone in the company knows these layoffs are coming, so it’s only fair to let the employees know in advance. The federal law makes exemptions for “business circumstances that were not reasonably foreseeable,” which is probably the argument Telltale will make, pointing to the loss of outside funding. However, the California WARN law doesn’t have that clause.
If Telltale loses the case, what’s left of the company could be forced to give employees back pay from the 60 days of notice they didn’t get.
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