Red Lobster Is Being Sued Over The Way It Handled Layoffs

In May, Red Lobster suddenly closed nearly 50 locations nationwide without any prior announcement. Several days later, the company filed for Chapter 11 bankruptcy following years of struggling sales and last summer's Ultimate Endless Shrimp promotion fiasco. Now, another 228 locations are facing closure for ongoing leasing issues.

Red Lobster's workers were reportedly just as in-the-dark as the public regarding the company's plans to halt operations at particular locations. In California alone, around 300 workers were laid off. The company now faces legal action over the alleged lack of prior notice, reports Restaurant Business. According to a lawsuit, Red Lobster's business actions were in violation of the Worker Adjustment and Retraining Notification (WARN) Act, which requires companies to give affected workers at least 60 days' notice before a closure or mass layoff. This is intended to be a two-part class action that seeks redress for workers on the national level and in California.

The representative plaintiff is George Parker, a former Sonoma County Red Lobster employee who had been working at the Rohnert Park location off Redwood Drive since 2018. Parker is asking for 60 days' worth of back wages and benefits, which are ensured by the WARN Act. Part of Red Lobster's Chapter 11 bankruptcy filing mentions that corporate made an attempt to relocate employees to nearby restaurants, but this wasn't possible for all of the suddenly-jobless workers. The class-action lawsuit alleging unlawful termination was filed by Los Angeles-based law firm Melmed Law Group in Orlando bankruptcy court.

Former employees are red angry in illegal termination suit

The timing of the playoffs didn't help matters. After making employees work hectic shifts on Mother's Day, the company suddenly closed their workplace and began auctioning off the kitchen equipment. Former employee Ramon Garcia of the newly-shuttered Hamburg, California Red Lobster told 10News San Diego that his restaurant gave workers three days to clean out the store. Others said they woke up to scheduling app notifications and texts from coworkers informing them that they were out of a job. The service industry is infamous for its high turnover rate, but Red Lobster has also seen high turnover in the C-suite (the company is currently on its fourth CEO in three years).

Red Lobster's official Instagram made a long post on May 21 addressing the decision to file for bankruptcy. "As many of you know, we recently made the tough decision to close a number of our restaurants," read the post. "Root for us. Together, we can write a new chapter." The whole "teamwork" sentiment might feel a little out of place from the perspective of hundreds of laid-off employees, and folks took to the comments section to say so. As one person posted, "So there's a statement to the customers and not us employees you fired without warning." A frustrated customer remarked, "Laying off employees with no notice. Yeah, I don't think I would ever dine there again if I even could."