Guzman y Gomez faces class action from US workers over closed stores | Fast food
American workers at Guzman y Gomez’s shuttered U.S. stores have filed a class-action lawsuit against the Mexican-themed Australian fast food chain over allegations that staff were terminated without adequate pay or notice.
The legal case, filed in a US federal court in Illinois, was sparked by GyG’s decision last week to immediately close its Chicago store chain after abandoning its highly touted plans to expand in the US.
According to the lawsuit filed by Chicago firm Haseeb Legal, workers say they first heard about the impending closures through an internal message posted on the company’s messaging platform on May 21.
The message allegedly includes the following statements: “After careful consideration, we have made the difficult decision to exit the US market. This means that we will be closing all of our restaurants starting today.”
The class action alleges that GyG is required under federal and state law to provide 60 days’ written notice before conducting a mass layoff.
It is seeking up to 60 days of pay and benefits for each affected employee, estimated by the law firm to be more than 500, and a trial by jury.
GyG has been contacted for comment.
The Australian-listed food chain has seen significant growth in its home country and now boasts one of the fastest growing fast food networks in the country.
It is among the 10 largest fast food chains in Australia based on the number of stores.
But the company’s plans to enter the U.S. market, already rich with Mexican food and established rivals like Chipotle, officially ended last week amid mounting losses.
Analysts have described the US market as a “graveyard” for Australian fast food chains following failed expansion attempts by Crust Pizza and Oporto.
Last week, GyG listed eight stores in its US network, all located in the greater Chicago area. The US website now reads: “All GyG US restaurants are permanently closed.”
The class action lawsuit includes two plaintiffs, both baristas who were promoted to leadership change. Allegedly, one was making $21 an hour and the other was making $23 an hour.
According to the class action lawsuit allegations, neither the required notice nor the required compensation was paid.
While GyG’s US subsidiary is named as a defendant in the legal case, it is claimed that US operations and GyG Australia constitute a “single integrated business” and employer, and liability is expanded.
