Top 40 supplier Koozie Group (asi/40480) is a settling a class-action lawsuit that stems from alleged violations of the Worker Adjustment and Retraining Notification Act (WARN), but denies any wrongdoing, court papers show.

Records filed in the U.S. District Court for the Middle District of Florida-Tampa Division indicate that the Clearwater, FL-based company has agreed to settle for $350,000.

According to the proposed settlement, which awaits final sign-off from a judge, the money will go into a fund from which approximately 212 members in the class action – former employees – will be paid. Records indicate that each member is expected to receive $988 after attorneys’ fees, litigation costs, and the costs of settlement administration and other necessary payments.  

Despite proceeding to settle the case, Koozie Group asserts that it did not violate the WARN Act, a labor law that requires most employers with 100 or more employees to provide 60 calendar-day advance notification of planned closings and mass layoffs.

Court records show that Koozie Group “specifically denies that it engaged in any wrongdoing, does not admit or concede any actual or potential fault, wrongdoing, or liability in connection with any facts or claims that have been alleged against it in the action, denies that the claims asserted by named plaintiff are suitable for class treatment other than for settlement purposes, and denies that it has any liability whatsoever.”

However, court papers continue, Koozie Group “agreed to resolve this action through settlement because of the substantial expense of litigation, the length of time necessary to resolve the issues presented in this case, the inconveniences involved, and the disruption to its business operations.”

ASI Media has reached out to Koozie Group for comment.

Eric Jones, a Koozie Group employee for more than 16 years, was the named plaintiff in the suit. He alleged that Koozie Group terminated him and other employees who are part of the class action without providing sufficient notice as legally required under the WARN Act.

Jones’ complaint asserted that he and other employees were furloughed on March 26, 2020, but were told they would be brought back. However, on November 20, 2020, Jones said he and others were abruptly terminated in violation of the WARN notification requirement. 

According to Jones’ complaint, the termination notice also failed to comply with the WARN Act in other ways. For instance, it didn’t include “whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed,” the suit charges. The notice also allegedly didn’t have the job titles of positions to be affected and the names of workers currently holding the affected jobs, nor the name and address of the employment site(s) where the mass layoff would occur.

The furloughs occurred as the economic catastrophe of COVID-19 struck; the terminations occurred while the virus and its related societal restrictions continued to deeply affect business in the promo industry. Collective industry sales dropped nearly 20% in 2020.

In the court records, Koozie Group maintained it had a variety of defenses at its disposal, had the case went to trial. These include exemptions from certain requirements under the “unforeseeable business circumstance” exception of the WARN Act due to the COVID-19 economic downturn. Koozie Group felt it could also argue it did not have an obligation to provide notice due to the WARN Act’s “natural disaster exception” – again, related to COVID troubles.