Guzman y Gomez faces class action from US workers over closed stores
US workers at Guzman y Gomez have filed a class action after the chain abruptly shut Chicago stores and exited the market.
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Workers say the company closed its Chicago-area stores without the 60 days’ written notice they say the law requires for a mass layoff. GyG says it complied with its legal obligations and the case now seeks back pay and benefits for affected staff.
Guzman y Gomez opened stores in the US, but then decided to close them. Workers say they were told too late and did not get the warning or money they believe the law requires.
It is a bit like a school club suddenly shutting its doors and telling members the same day, instead of giving a fair warning before the end.
Now a group of workers is asking a court to decide whether the company broke the rules and owes them pay and benefits.
Analysis
What happened
American workers at Guzman y Gomez have launched a class action in federal court in Illinois after the company abruptly shut its Chicago-area stores and abandoned its US expansion. The lawsuit, filed by Chicago firm Haseeb Legal, says employees first learned of the closure on 21 May through an internal company message that said the business had decided to exit the US market and would close all restaurants immediately.
The claim argues that GyG was required under federal and state law to give 60 days’ written notice before a mass layoff. It says the closure happened without the required warning or compensation. The action seeks pay and benefits for up to 60 days for affected employees and asks for a jury trial. The firm estimates the class could include more than 500 workers.
The company’s position
GyG has said it is aware of the legal action and is confident it met its obligations to US employees. The company declined to comment further.
The named plaintiffs were baristas promoted to shift leaders, with wages listed in the claim at $US21 and $US23 an hour. The suit also tries to extend responsibility beyond the US entity by arguing that GyG’s US operations and GyG Australia operated as a “single integrated enterprise,” which could widen potential liability.
Why this case stands out
GyG had grown quickly in Australia and was one of the country’s fastest-expanding fast food chains, but its US push ended after losses and weak traction in a market already crowded with Mexican food rivals. The lawsuit turns a failed expansion into a labour-law dispute over how the exit was handled and whether workers were left shortchanged.
Key points
- Workers at closed Chicago-area Guzman y Gomez stores filed a class action in Illinois federal court.
- The lawsuit says the company should have given 60 days' written notice before a mass layoff.
- It seeks pay and benefits for up to 60 days for affected employees, estimated at more than 500 people.
- GyG says it believes it met its legal obligations to US employees.
- The case also argues that GyG Australia and its US operations functioned as a single integrated enterprise.
