Mass. Car Dealership Operator Hit with Class Action in Wake of Late-2021 Layoffs

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A proposed class action alleges the operator of two Needham, Massachusetts car dealerships violated federal law by failing to provide at least 60 days’ notice before laying off at least 100 workers last year.

The 26-page lawsuit states that defendant Muzi Motors, Inc. closed its Needham Ford and Chevrolet dealerships in late November 2021—and laid off its entire workforce at each location—before selling the land on which the dealerships were located. According to the suit, Muzi violated the federal Worker Adjustment and Retraining Notification (WARN) Act by failing to provide workers with at least 60 days’ notice of the mass layoff, even though the company “knew or should have known” of it beforehand.

The case further alleges that the individual defendants, Muzi’s top three executives, have attempted to defraud the terminated workers by transferring proceeds from the liquidation of Muzi Motors’ assets to themselves in order to avoid having to pay their former employees. Per the suit, the laid-off employees are owed 60 days’ worth of unpaid wages and benefits and earned paid time off for which they were not compensated.

The lawsuit relays that the individual defendants had been considering selling the land on which the Needham car dealerships were located since at least 2018 and “intensified” their considerations after zoning changes in 2021 updated the allowable uses for the properties.

The suit says that although employees asked throughout September, October and November 2021 if the defendants were planning to close and lay them off, Muzi and the execs “repeatedly and intentionally misled” the workers and assured them that the Needham Ford and Chevrolet dealerships would remain open.

The lawsuit alleges, however, that this representation was untrue since the land on which the two dealerships were located was negotiated to be sold on December 17, 2021. Per the case, the defendants closed the dealerships in late November and, in the weeks leading up to the December sale, laid off at least 100 employees.

The case contends that the event qualifies as a mass layoff or plant closing under the federal WARN Act given the defendants employed at least 100 workers who were either full-time or worked a combined total of at least 4,000 hours per week, and the event resulted in the employment loss of at least 33 percent of Muzi’s workforce (and at least 50 employees).

According to the case, the defendants failed to pay dealership workers for their earned and unused paid time off upon the dates of their termination despite being aware that these amounts were owed. In fact, the lawsuit claims that the defendants “conspired to intentionally not pay” employees the full amount of their PTO and, despite being aware that the workers intended to file a WARN Act lawsuit, transferred proceeds from the liquidation of Muzi Motors’ assets to themselves in an apparent effort to hinder any payments to employees. The case alleges the individual defendants knew the transfer would cause Muzi Motors to become insolvent, and that the funds were being transferred “in exchange for nothing.” These actions, according to the suit, constitute violations of Massachusetts’ Uniform Fraudulent Transfer Act (UFTA).

The lawsuit looks to represent anyone who worked for the defendants in Massachusetts and was not provided with at least 60 days’ advance notice of the mass layoff in accordance with the WARN Act, not paid all earned PTO resulting in lost wages, and injured by the defendants’ alleged violations of the UFTA.

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