American workers at Guzman y Gomez's shuttered US stores have launched a class action lawsuit against the Mexican-themed Australian fast food chain, alleging they were terminated without adequate pay or notice. The legal claim, filed in a US federal trial court in Illinois, follows GyG's decision last week to immediately close its Chicago stores after abandoning plans to expand in the US.
According to the lawsuit filed by Chicago firm Haseeb Legal, workers first learned of the imminent closures on 21 May via an internal message posted 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 class action claims that GyG was required under federal and state laws to provide 60 days' advance written notice before conducting a mass layoff. It seeks pay and benefits for up to 60 days for every affected employee, estimated by the law firm to number more than 500, and demands a trial by jury.
A GyG spokesperson said the firm 'is aware of legal action filed in the United States and we are confident we have met all of our legal obligations to our US employees.' The spokesperson added: 'We are not in a position to provide further comment on this matter.'
The Australian-listed food chain has recorded significant growth in its home country and ranks among the top 10 biggest fast food chains in Australia by store numbers. However, its plans to break into a US market already rich with Mexican food and established competitors, including Chipotle, officially ended last week amid mounting losses. Analysts have described the US market as a 'graveyard' for Australian fast food chains after failed expansion attempts by Crust Pizza and Oporto.
The class action has two named plaintiffs, both former baristas promoted to shift leaders, earning $US21 and $US23 an hour respectively. Neither received the required notice nor compensation, according to the allegations. While the legal action names GyG's US entity as the defendant, it argues that the US operations and GyG Australia constituted a 'single integrated enterprise' and employer, expanding the liability.
