Former employees of Seattle-based e-commerce company Zulily filed a class action lawsuit alleging that they did not receive proper notice or pay following widespread layoffs last year. The lawsuit claims that Regent, Zulily’s former owner, violated the Worker Adjustment and Retraining Notification (WARN) Act, a federal law passed in 1988 to protect workers in the case of mass layoffs. The law typically requires a 60-day advance notice or severance pay for companies with 100 or more full-time employees.
Regent did not provide 60-day WARN Act notices or pay to remote workers, claiming that there was a loophole in the law that exempted remote employees from these protections. However, the lawsuit argues that the WARN Act does cover remote workers who are affected by plant closures or mass layoffs. Plaintiffs in the suit, former Zulily software engineer Jittania Smith and former merchandise director Kathryn Costello, aim to represent all Zulily remote workers in Washington and Nevada. They are being represented by HKM Employment Attorneys LLP.
Remote worker assignments under the WARN Act are considered a complex and unsettled issue, according to legal experts, due to the evolving nature of remote work today. Zulily, which initially launched in 2010 and grew into a successful e-commerce platform, was acquired by QVC’s parent company in 2015 for $2.4 billion. However, under Regent’s ownership, the company struggled and ultimately faced layoffs, unpaid vendors, and liquidation in late 2023.
Beyond Inc., a company that agreed to acquire Zulily’s brand assets for $4.5 million in March, stated that it is not involved in the lawsuit. The spokesperson for Beyond Inc. clarified that the case is against the legacy Zulily entity, which is now defunct. Seattle startup Convoy faced a similar lawsuit related to the WARN Act after a sudden shutdown, but the case was dismissed in March. Zulily is also involved in a lawsuit against Amazon that was filed in December under Regent’s ownership.
Overall, the class action lawsuit filed by former Zulily employees highlights the challenges faced by remote workers in terms of receiving proper notice and pay in the event of mass layoffs. The case also sheds light on the complexities of applying the WARN Act to remote work arrangements, which are becoming increasingly common in today’s workforce. As Zulily undergoes changes in ownership and faces legal battles, the future of the company and its former employees remains uncertain.
