Former employees of bankrupt VMS have filed a class action suit seeking compensation from the collapsed PR services company, saying the abrupt termination of 465 employees in late August violated employment laws.
Three plaintiffs filed the suit in U.S. Bankruptcy Court for the Southern District of New York on Sept. 2, including Freddy Abreu, former business development director in New York, Tammy Langley, a biller based in VMS' Maine facility, and Brian Hudson, a news monitor based in Louisville.
The suit, on behalf of the three plaintiffs and "other similarly situated former employees," says Abreu was only notified of his termination by a letter sent to his home and received on Aug. 30, four days after CEO David Stephens held a conference call to tell employees they had been terminated.
The suit says VMS axed approximately 250 staffers in Louisville, 150 in New York and 65 in Maine.
After 30 years providing media monitoring services, VMS shocked the PR sector when it filed for Chapter 7 bankruptcy on Aug. 26, a move to liquidate what was one of the PR services sector's largest companies. It claimed $17M in assets and more than $8M in liabilities as its bank and largest creditor, Capital One, owed $6.5M by VMS, cut off financing.
The employee suit alleges the abrupt firings violated the Worker Adjustment and Retraining Notification Act, which requires 60 days' notice, the New York's WARN Act, which calls for 90 days' notice, alleging that the closure of the company was reasonably foreseeable by VMS.
They seek to recover up to 60 days' wages and benefits from VMS.
Jack Raisner, a partner at New York employment law firm Outten & Golden who is handling the suit for the former staffers, told O'Dwyer's the case is "only at its inception" with a first court conference slated for Nov. 16.
VMS's trustee, meanwhile, has scheduled an auction of VMS property for Oct. 20 at the company's defunct headquarters at 1500 Broadway in Times Square. In its bankruptcy filing, VMS listed more than $9.2M in office equipment, furnishings and supplies among its assets.
The trustee, Kenneth Silverman of law firm Silverman Acampora, has sought about $380K for his operations and to pay personnel to pursue VMS' estimated $6.4M in accounts receivable.