WARN Act Class Action Filed in Wake of Mass Patriot National, Guarantee Insurance Layoffs

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Two plaintiffs have filed a proposed class action lawsuit on behalf of individuals formerly employed by defendant Patriot National, Inc. who were fired as part of a mass layoff that occurred on November 24, 2017. The plaintiffs allege the defendants violated the Worker Adjustment and Retraining Notification Act—the WARN Act—by failing to provide proposed class members with at least 60 days’ advance written notice of their terminations.

“As a consequence,” the lawsuit argues, “[the plaintiffs] and the other similarly situated individuals are entitled to recover from [the defendants], under the WARN Act, their wages and other employee benefits for 60 working days following the termination of their employment, which wages and benefits have not been paid.” 

According to the complaint, Patriot National—a risk management tech firm—and co-defendant Guarantee Insurance Co. were controlled by one individual, who reportedly received in 2016 and 2017 $15.7 million in transfers from the latter that, the case says, “had no documented business purpose and no discernible benefit to Guarantee.” In March 2017, Patriot National reportedly inked with Guarantee, its biggest customer, a $30 million, 10-year services contract. From here, the lawsuit continues, Guarantee Insurance, after a financial audit found it overstated its level of capitalization in 2016, entered into state-supervised receivership. After entering into a consent order disallowing it from writing any new business while the company reorganized, Guarantee was ordered by a Florida judge to be liquidated, with the New York Stock Exchange delisting its common stock—thereby suspending Patriot National’s’ common stock—almost immediately thereafter.