Toys R Us Workers To Receive $2 Million Severance Settlement
Toys R Us closed its doors last year, but many have felt the impact of the biggest toy store [...]
Toys R Us closed its doors last year, but many have felt the impact of the biggest toy store filing for bankruptcy. Toy makers like Mattel and Hasbro are just now starting to recover all the financial issues Toys R Us shutting down caused, but even more impacted were all the employees that were out of jobs but also without severance, though at least some of those workers have been able to claim victory in that regard, a group that includes 33,000 employees who were laid off by Toys R Us (via Yahoo Finance).
30-year Toys R Us employee Ann Marie Reinhart Smith filed a class action claim on behalf of the 33,000 employees, who were all laid off without getting any sort of severance. Now, there was a Hardship Fund eventually set up by two of the three private equity firms behind Toys R Us, KKR and Bain Capital, which ended up being $20 million. That said, there were several requirements regarding that fund, and it wasn't a traditional severance program, which didn't sit well with employees who were so loyal to the company.
"After being so loyal to the company, to be let go without our promised severance is disrespectful," Reinhart Smith said in a statement. "We're grateful we achieved this class-action settlement. It's an important milestone for working families like mine who are so vulnerable to Wall Street's greed."
Judge Keith L. Phillips of the Eastern District of Virginia courts approved the $2 million settlement on Thursday. Part of the employee's main case was that they were initially promised severance by Toys R Us when the company announced their liquidation plans, but then they were told that no one would be getting any sort of payout.
The group was represented by the law firm of Outten & Golden LLP, and partner Jack Raisner explained that this victory has been a long time coming, though he does wish they had gotten more.
"After nearly a year, employees laid off by Toys 'R' Us are finally getting something to show for their steadfast service," Raisner said in a statement. "It's a shame they aren't getting more, but this settlement sends a message that employees deserve a place in the front of the line of creditors when businesses fail, and that is important to people who work in retail and their families."
Toys R Us has announced plans to return with several stores, though with a much smaller presence than before. We'll have to wait and see if it can return to what it was eventually, or if indeed those days are gone, at least in the United States.