Saying they were given less than a day's notice before being laid off, some 325 former employees of computer hard-drive manufacturer Micropolis Inc. filed a $3-million class-action suit Friday in U.S. Bankruptcy Court.
The suit seeks 60 days' pay from Micropolis' parent company, Singapore Technologies, for allegedly violating federal law that requires companies to give workers a 60-day notice before a plant closing.
The suit also asks the bankruptcy court in downtown Los Angeles, which is overseeing liquidation of the company, to force the company to recall a letter sent to dismissed employees with their accrued vacation pay saying they were ineligible for additional benefits.
Micropolis has offered employees three weeks in severance and vacation pay in exchange for dropping the suit and renouncing rights to additional damages. The deadline for workers to accept the offer or risk loss of other benefits is Dec. 31.
"This all smacks of a campaign to force [employees] to grab at whatever morsel is dangled in front of them and to rush them toward an an artificial deadline," said David Affeld, a lawyer for the workers.
Affeld said he expected a hearing on the matter within two weeks.
Singapore Technologies has hired Price Waterhouse to oversee the firm's liquidation. Freddy Reiss, the accountant handling the case for Price Waterhouse, could not be reached for comment Friday.
After continued losses in a highly competitive market, Singapore Technologies shuttered the research and development plant on Nov. 10. The closure was announced to employees at a meeting the same day.
In addition to the local job loss, 1,300 workers in Singapore, 700 employees in Thailand, as well as marketing and sales staff throughout Europe, were terminated. A skeleton crew of 24 workers remains at the Chatsworth plant to shut down operations.
There had been rumors at the Chatsworth facility for weeks that layoffs were imminent, but only three days before the shutdown, company executives denied a closure, employees said.
Micropolis, founded in 1976, designed and tested hard drives in Chatsworth and built them in Asia.