Guzman y Gomez, the Australian fast food chain, is facing a class action lawsuit in the United States after workers at its shuttered Chicago stores claim they were terminated without adequate pay or notice. The legal claim, filed in a federal trial court in Illinois, follows the company's decision last week to close all of its US restaurants after abandoning its expansion plans.
According to the lawsuit, employees first learned of the imminent closures on 21 May via an internal message on the company's messaging platform. The message reportedly stated: “After careful consideration, we have made the difficult decision to exit the US market. This means we will be closing all our restaurants from today.” The workers argue that federal and state laws required Guzman y Gomez to provide 60 days' advance written notice before conducting a mass layoff.
The class action seeks pay and benefits for up to 60 days for every affected employee, estimated to number more than 500, and requests a trial by jury. A spokesperson for Guzman y Gomez said the company is aware of the legal action and is confident it has met all legal obligations to its US employees, but declined to comment further.
Guzman y Gomez has seen significant growth in Australia, where it ranks among the top ten fast food chains by store numbers. However, its attempt to break into the US market, which is already crowded with Mexican food offerings and established competitors such as Chipotle, ended last week amid mounting losses. Analysts have described the US as a “graveyard” for Australian fast food chains, citing failed expansions by Crust Pizza and Oporto.
Last week, Guzman y Gomez listed eight stores in its US network, all located in the wider Chicago area, and its US website now states: “All GyG USA restaurants permanently closed.” The class action names two plaintiffs, both former baristas promoted to shift leaders, who earned $21 and $23 per hour respectively. The lawsuit alleges neither received the required notice or compensation, and argues that the US operations and Guzman y Gomez Australia constituted a “single integrated enterprise”, which would expand liability.
