Amid filing for Chapter 11 bankruptcy, Red Lobster abruptly closed many of its stores, amassing 93 in total. Now, they are caught up in a lawsuit filed by former employees.
These closures inevitably led to hundreds of staff losing their jobs; but why are the ex-employees suing the fast food chain?
A lawsuit has been filed by California-based ex-Red Lobster employees as they claim they were fired without notice and that the company did not follow proper protocols.
How were staff affected by the restaurant closures?
In California, there is a law called the ‘WARN Act’ which the Department of Justice defines as: “WARN protects employees, their families, and communities by requiring employers to give a 60-day notice to the affected employees and both state and local representatives before a plant closing or mass layoff.”
When Red Lobster closed its stores at the beginning of May 2024, employees claimed that they received no prior warning surrounding this and were as in the dark on the subject as seafood fans across the country.
Many people arrived at their favorite store to find a ‘temporarily closed’ sign on the door, and Red Lobster began to quietly auction off their kitchen equipment, proving that the branches wouldn’t be reopened any time soon.
After a busy Mother’s Day weekend, former employee Ramon Garcia of an affected store in Hamburg, California 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.
It isn’t just staff on the ground that have a high turnover rate, as Red Lobster is currently on its fourth CEO in three years.
What’s the basis for the Red Lobster lawsuit?
Legal firm Melmed Law Group told Dexerto that they filed a lawsuit on behalf of California Red Lobster employees.
They said: “Hundreds of employees across California have been affected by these abrupt terminations, which we contend violate state and federal labor laws.
“We believe this case highlights critical issues regarding employee rights and corporate responsibility, and we are committed to seeking justice for the affected workers.”
The person organizing the 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 wages and benefits, as per the WARN Act. Part of Red Lobster’s Chapter 11 bankruptcy filing mentions that the corporation attempted to relocate employees to nearby restaurants, but this wasn’t possible for all of the suddenly jobless workers. Especially in California, where 8 of the restaurants were closed.
What have Red Lobster said?
Red Lobster stayed quiet for five days after their sudden restaurant closures and layoffs, and finally broke their silence on May 21, 2024 via Instagram.
Red Lobster reminisced on the significance of their brand in US culture, saying, “We may be the place you discovered your love of seafood. Or where you met the love of your life on a first date.”
They also reassured loyal customers saying that Chapter 11 bankruptcy is often misunderstood, and assured their fans that it does not mean they are closing, in fact, that it meant “just the opposite.”
Red Lobster drove home their message of teamwork at the end of their post, saying, “Join us. Dine with us. Root for us. Together, we can write a new chapter.” And although they did reference their restaurant closures, there was no mention of the staff that lost their jobs abruptly.
This message left a bad taste in some ex-employees’ mouths though, with the top comment on the post being, “Y’all fired us with out warning though…” receiving nearly 300 likes.
What does the future hold for Red Lobster?
Class action lawsuits like this one can get pricey, and with the recent losses amid bankruptcy, things are looking rocky for Red Lobster to say the least. Back in Summer 2023, Red Lobster aimed to tackle its 2022 loss of over $33 million by launching a $20 ‘All-you-can-eat shrimp’ deal, which lost them a further $11 million in just one quarter.
Red Lobster closed their without any notice.
That said, Red Lobster may survive the proverbial pot of boiling water yet, as Chapter 11 bankruptcy allows businesses to focus on the brand rather than their debt and to still serve customers, albeit on a smaller scale.
Red Lobster has not announced any further restaurant closures, and they have not commented on the lawsuit from their former employees.
Several fast food chains are feeling the heat from recent inflation rates, and to tackle this, the likes of McDonald’s, Popeye’s, and Starbucks have launched value deals to draw customers in.