CARMEL, Ind. ― Two employees laid off by the parent company of for-profit college chain ITT Technical Institute have filed a lawsuit claiming the company violated federal law by not providing 60 days’ notice.
Allen Federman, a business analyst at ITT Educational Services Inc.’s Carmel, Indiana, headquarters, and Steve Ryan, an instructor at two ITT Technical Institute locations in California, filed the complaint Tuesday in U.S. District Court in Delaware.
The lawsuit seeks class-action status on behalf of the 8,000 employees who are losing their jobs as a result of ITT’s decision to shut down all 130 ITT Technical Institute campuses in 38 states, the Indianapolis Business Journal reported.
ITT announced Tuesday it was closing the campuses because it cannot survive recent sanctions by the U.S. Department of Education.
The lawsuit claims ITT violated the federal Worker Adjustment Retraining and Notification Act, which requires 60 days’ advance written notice in the case of mass layoffs or plant closings. The law affects employers with more than 100 employees and business sites with more than 50 workers. ITT Tech campuses with fewer than 50 employees might not be responsible for following the law.
The suit also claims the layoff violates California labor laws, which also require 60 days’ notice during mass layoffs. ITT Educational operated 15 ITT Tech campuses in California.
The lawsuit asks for each affected employee to receive “unpaid wages, salary, commissions, bonuses” and other benefits that would have been paid over a 60-day period.
ITT spokeswoman Nicole Elam called the campus closures “a complicated process.” In an email to the newspaper, Elam said “all matters involving students and personnel are priorities.”
The chain was banned Aug. 25 from enrolling new students who used federal financial aid because, Education Department officials said, the company had become a risk to students and taxpayers. The department also ordered ITT to pay $152 million within 30 days to help cover student refunds and other liabilities if the chain closed.
ITT Educational Services CEO Kevin Modany told reporters on a conference call Tuesday that ITT was the victim of a “regulatory assault” and never had the chance to defend itself.
One of the attorneys representing the plaintiffs is Jack A. Raisner of Outten & Golden LLP of New York, who represented employees of Corinthian College, another for-profit education chain that closed in April 2015 after the government withdrew aid.