On June 1, reports surfaced that construction company Katerra was ceasing US operations. Mass layoffs began three days later.
Now three former employees are bringing a class action lawsuit against the construction company for failure to dismiss. The lawsuit, which seeks to confirm a class of approximately 700 laid-off Katerra employees, was filed as a bankruptcy suit in Katerra’s bankruptcy proceedings.
The employees worked in Seattle, Jersey City and Hayward, California, according to the lawsuit. Clifford Marvin worked as an architectural specification writer in the Katerra Seattle office while Todd Irving was a construction manager on a Katerra project in Hayward. Joseph Russomanno was a help desk technician in the company’s Jersey City office.
According to the Federal Act on the Adaptation and Retraining of Workers (WARN), employers with 100 or more employees must notify company closings and mass layoffs in writing for at least 60 days. There are a few exceptions, including “unforeseen business circumstances”.
But Katerra’s financial troubles go back many months, and the lawsuit alleges that Katerra was required to abide by these notification rules and owes its employees unpaid wages and accrued vacation time.
A representative from Katerra did not immediately respond to a message asking for comment.
Katerra filed for bankruptcy protection June 6, listing liabilities between $ 1 billion and $ 10 billion and assets of just $ 500 million. The company posted losses of $ 2.78 billion in 2018, 2019, and 2020.
The company, which has faced financial problems in the past as well as difficulties executing projects, plans to sell its operations in India and Saudi Arabia, as well as a number of companies it has acquired over the years. SoftBank, its largest financier, is providing a $ 35 million loan to help the company run its business and market its assets.
Contact Kathryn Brenzel