Former Borders employees secure settlement in lawsuit: $797 a person
Melanie Maxwell | AnnArbor.com
The agreement amounts to $797 per person after legal fees are paid, according to a document describing details of the settlement that was filed with the U.S. Bankruptcy Court's Southern District of New York.
Former employees of Borders' Ann Arbor headquarters, led by an employee named Jared Pinsker, filed suit this summer accusing the company of failing to give corporate employees proper notice of their layoffs under the federal Worker Adjustment and Retraining Notification (WARN) Act.
Borders contended that it did provide proper notice — and even if it did not, attorneys said Borders was exempted from the WARN Act under a stipulation that allows fast layoffs in the event of "unforeseeable business circumstances."
According to the filing, the parties agreed to settle their dispute to avoid a protracted and costly legal battle.
"The trial of this matter likely would be lengthy and complex, adding to cost and potential delay," the filing says. Meanwhile, "due to the complex nature of the issues involved, the parties recognize that the outcome of the WARN action is uncertain."
After legal fees and other payments, the 198 employees represented in the class action suit will receive about $797 apiece.
A U.S. bankruptcy judge in Manhattan must approve the settlement.
Borders, which finished closing its stores and liquidating its inventory in September, filed for Chapter 11 bankruptcy protection in February. The company converted its case into a Chapter 11 bankruptcy liquidation in July.
At one point within the last 10 years, Borders had nearly 2,000 workers at its corporate headquarters on Phoenix Drive. That figure dwindled to a few hundred by the time the company filed for bankruptcy.