LOS ANGELES (CN) - The Wet Seal closed 338 stores without notice on Jan. 7, throwing 3,695 employees out of work in violation of the WARN Act, a class action claims in Federal Court.
Lead plaintiff Katelin Pruitt claims The Wet Seal was required to give 60 days notice of the mass layoff, under the federal Worker Adjustment and Retraining Notification Act.
Most of the company's stores are in California. In 2014, it had 532 outlets, including 478 Wet Seal stores and 54 Arden B stores, with a total of 7,413 employees, according to the complaint.
Wet Seal's share price has fallen from $3 in April 2014 to 11 cents today, and has reported annual losses for 3 straight years, Pruitt says.
"Despite strong evidence that Wet Seal was in steep decline, it continued to keep its employees uninformed right up until they abruptly fired 3,695 of their employees. ... (E)mployees were told not to look for other jobs and that the stores were simply remodeling," according to the complaint.
Pruitt seeks class certification, unpaid wages and benefits under the WARN Act and labor law, and costs.
She is represented by John Fiske with Gomez Trial Attorneys, of San Diego.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.