Late last week, Telltale Games essentially shut down, laying off the vast majority of their employees with the intention of shutting down completely after fulfilling some contractual obligations. Yesterday afternoon, a former Telltale employee Vernie Roberts, Jr. filed a class-action suit on behalf of himself and fellow employees alleging that the San Rafael-based developer violated labor laws by not aligning to Federal and state laws outlined by the WARN Act, Polygon reports.
When Telltale laid off around 225 of their staff last week, the company did so abruptly, having not given much if any warning to its employees, with reports of some employees having just moved to the Bay Area developer to start work the previous week. Under WARN, Worker Adjustment and Retraining Notification Act, employers with over one hundred employees are required to give those employees 60 days notification before any mass layoffs or closures. In California, that number lessens to 75 employees, but still has the same 60-day requirement.
If a company fails to comply with the WARN Act, then they are financially liable to the employees to pay the salary they would have accrued in those 60 days, as well as benefits associated with their employment. In the suit, Roberts counts 275 employees affected by the mass layoff comprised of last week’s terminations and the remaining skeleton crew of 25 employees that will be let go when Telltale officially closes. That would put Telltale on the hook for 60 days’ pay, with interest, for all 275 employees should they be found liable in court.
Experts we spoke to speculated that Telltale may have deferred on providing notice to employees under the assumption that public notice would have made it less likely for the company to pursue financing, scaring off possible creditors. This is one exception to the WARN Act, but it only applies to plant closings, so the experts also note that Telltale would have little luck trying this.
One complication for Telltale is that the developer went to social media last night to suggest that The Walking Dead, their episodic game series based on the Robert Kirkman comic book, could receive a conclusion in the forms of episodes 3 and 4.
If the company is still operating and making revenue, even by selling off the license or completed assets to a third party, it will be extremely difficult for them to argue that they are unable to pay their employees in accordance with federal law.
The season pass for The Walking Dead: The Final Season is still available on console and PC digital distribution services, advertising four episodes with the purchase.
The employees let go from Telltale received no severance after being terminated.