A class-action lawsuit has been filed against Telltale Games in the wake of a sudden mass layoff affecting around 250 employees, leaving a skeleton crew of 25 remaining and the future of the studio and its projects in jeopardy.
Polygon reports that the lawsuit, submitted by former Telltale employee Vernie Roberts, accuses the company of violating the Worker Adjustment and Retraining Notification (WARN) Act when it terminated the majority of its staff without warning or severance and benefits lasting only until the end of the month.
The WARN Act requires employees be notified at least 60 days in advance of mass layoffs or the closure of work location such as a plant or in the case of game development, a studio. In its federal form, a company may be exempt from this if it is either currently seeking funding, or if the layoffs occurred due to an unforeseen business change. This exemption does not exist at the California state level, where Telltale is located and under which it falls. The suit alleges Telltale was in violaton of both federal and state law.
In an interview with GameDaily, attorney Richard Hoeg of Hoeg Law said that while Telltale may be able to exempt itself at the federal level due to the "unforeseen business circumstances" clause, the state level would prove trickier to avoid.
"By keeping the Company open in some capacity, it would appear that Telltale has foreclosed itself from using the most obvious exception to the WARN Acts," Hoeg said. "That is unlikely to have significant negative effect on its ability to comply with the federal act, but the fact that California did not bring over the pertinent exemption would seem to put them in a precarious compliance position with the state, as there is no obviously applicable exception to the 60 day requirement that I can see from the outside."
Should the lawsuit succeed, Telltale would be liable for back pay and benefits for all affected employees for each day the company was in violation of the act - according to the suit in this case, a full 60 days.
Interestingly, the suit is seeking reparations not for 250 employees, as have been reported laid off, but for 275 - a number which could potentially include the 25 remaining at the studio to "fulfill the company's obligations to its board and partners" should they opt to join the class-action suit.