Red Lobster Lawsuit: Fired Workers Claim No Notice Before Mass Layoffs

A Red Lobster employee has filed a lawsuit against the seafood restaurant chain, alleging she and other workers were illegally laid off by the seafood restaurant chain without notice, in violation of the law. 

Donna Lowe filed the proposed class action lawsuit against Red Lobster Hospitality LLC, Red Lobster Restaurants LLC and Red Lobster Seafood Co. LLC on May 17 in a Florida federal court, alleging violations of the Worker Adjustment and Retraining Notification Act (WARN Act) and the NJ WARN Act. 

Lowe filed the lawsuit just three days after she said her employment with Red Lobster was terminated without any prior notice on May 14. Lowe says, under the law, she and other employees should have been given at least 60 days notice. 

No Warning Before Termination

Red Lobster filed for chapter 11 bankruptcy on May 20, and announced the closure of more than 50 locations across the United States.

Lowe says, prior to this, she had heard the rumors about Red Lobster’s bankruptcy and tried to get ahead of it by speaking with her manager. 

She says her manager assured her that their store in New Jersey was profitable, and that they had received assurances from the corporate office that there was nothing to worry about.

However, on May 14, Red Lobster notified employees including Lowe that they would be “ceasing operations” and that employees would not be permitted to work their scheduled shifts. Lowe says she was informed of the closure of the Red Lobster she worked at through the company's scheduling app used for employee shifts.

“Defendants informed the affected employees that their services would no longer be required and that they were not required nor allowed to report for work,” the lawsuit states. “This mass layoff resulted in loss of employment for all store employees at dozens of Red Lobster locations.” 

Red Lobster's Sudden Closures Follow Bankruptcy Filing

Red Lobster bankruptcy rumors had been circulating in the months leading up to Lowe’s layoff, she says. The restaurant chain was impacted by a range of factors, CNN reports, including handoffs between a mix of investors and corporate parents, as well as mismanagement.

For example, last year, Red Lobster added a $20 “endless shrimp” offer onto its daily menu, instead of having it as a limited-time offer. The endless shrimp proved to be too popular, and Red Lobster’s major shareholder, Thai Union, reportedly lost $11 million. 

Thai Union also reportedly forced cost reductions, and neglected upgrades, which ended up hurting sales, CNN reported. Meanwhile, competition from fast-casual chains like Chipotle and Chick-fil-A also squeezed Red Lobster’s bottom line. 

Lawsuit Seeks Compensation for WARN Act Violations

Lowe is suing under the WARN Act and the NJ WARN Act, which require that employers provide notice ahead of a mass layoff. 

She says Red Lobster made a mass layoff by unilaterally shutting down dozens of Red Lobster locations across the country. The lawsuit alleges no notice was given to employees. 

“Defendants failed to provide 60 days advance written notice as required,” it says.

As a result, Lowe is seeking a judgment against Red Lobster and is asking for back pay and loss of benefits to the fullest extent permitted by law, plus fees, costs, and civil penalties. She’s looking to represent all Red Lobster employees whose employment was permanently terminated on May 14, 2024.

Case Details

• Lawsuit: Lowe v. Red Lobster Hospitality LLC et al.
• Case Number: 6:24-cv-00928
• Court: U.S. District Court for the Middle District of Florida

Plaintiffs' Attorneys

• Gregg I. Shavitz (Shavitz Law Group P.A.)
• Nicholas A. Migliaccio and Jason S. Rathod (Miglicaccio & Rathod LLP)