Telltale Games sued by former employee over mass layoffs

A former Telltale Games employee has filed a lawsuit against the company, alleging that the recent layoff of more than 250 employees without warning or severance is a violation of the WARN [Worker Adjustment and Retraining Notifcation] Act.   

Available via Polygon, the lawsuit alleges that "the defendant violated the WARN act by failing to give the plaintiff and the class of similarly situated employees he seeks to represent at least 60 days advance written notice of termination, as required by the WARN Act." That class, if approved by the court, will include approximately 275 employees, including those who were let go and the skeleton crew that remains employed at Telltale. 

The lawsuit seeks "an amount equal to the sum of all of the Aggrieved Employees': unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other ERISA benefits, for sixty days following the member employee's termination." Interest, attorney's fees, and "such other and further relief as this Court may deem just and proper," are also requested. 

The WARN Act requires that companies of a certain size provide notice prior to layoffs, but the situation is complicated by exemptions, including "unforeseeable business circumstances," for which Telltale may be eligible: Variety reports that the end came very abruptly when a partner, rumored to be Lionsgates, suddenly backed out of its funding deal with Telltale, leading Telltale to cancel its Stranger Things deal with Netflix.   

But Telltale's problem, as explained in this detailed breakdown of the situation at GameDaily.biz, is that California has its own version of the WARN Act without a "unforeseeable business event" exemption. As Telltale is based in the state, it could find itself on the hook for penalties at the state level, even if it is exempted at the federal level. 

The bottom line is that it's a legally complex situation that doesn't look particularly good for Telltale and will likely take a long time to untangle. The matter is complicated further by the fact that Telltale, despite its near-annihilation, is not technically closing yet: Telltale issued a statement yesterday saying that it is in talks with "multiple potential partners" about finishing The Walking Dead: The Final Season, and CEO Pete Hawley tweeted earlier this week, "To be clear, we're not shutting down. As odd as that may sound, 25 of us will continue, foreseeable. I'll make further comment in the coming weeks." 

I've reached out to Telltale for comment on the lawsuit, and to ask if a revival of The Walking Dead: The Final Season will enable the company's former employees to be paid severance, and will update if I receive a reply.