The former staffers allege the company failed to provide 60 days’ notice of a mass layoff as required by the federal Worker Adjustment and Retraining Notification Act and 90 days’ notice as required by the state’s WARN Act, according to the complaint filed Sept. 14 in U.S. District Court for the Eastern District of New York.
Medly laid off 293 employees, or 16 percent of its workforce, on Aug. 4 and about half of its remaining roughly 1,600 employees on Aug. 31, according to the lawsuit and previous reporting by Becker’s.
Medly told the employees being let go Aug. 31 that it was due to “unexpected failure to consummate a significant financing in mid-August 2022 and subsequent inability to obtain comparable alternative financing,” the lawsuit stated. But then company CEO Richard Willis stated in a companywide videoconference, on or about Sept. 1, that Medly had secured financing and funding from investors and banks, according to the complaint. Remaining employees received raises, the former staffers claim.
Medly didn’t respond to requests from Becker’s for comment. The company has raised more than $100 million, according to Crunchbase.
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