A class action lawsuit alleges that SmileDirectClub violated federal law by not giving 60 days advance notice of termination when it shut down.
A class action lawsuit alleges that SmileDirectClub violated federal law by not providing 60 days advance notice to employees who were laid off when it abruptly shut down global operations in December.
The SmileDirectClub lawsuit accuses the company of violating the federal Worker Adjustment and Retraining Notification (WARN) Act when it laid off around 1,000 employees.
According to the case, the defendants are responsible for 60 days’ worth of wages, salaries, commissions, bonuses, accrued holiday and vacation pay, and pension and 401(k) contributions.
SmileDirectClub and Access Dental Lab continued to actively operate their business after filing voluntary petitions for Chapter 11 bankruptcy protection on September 29, 2023. That same day, SmileDirectClub CEO David Katzman said in an email to employees that “today’s filing is not a liquidation proceeding, but rather a restructuring of our business to improve our financial health and continue providing our customers affordable and convenient premium oral care,” the case states.
Katzman also told employees in the email, “we are operating our business and serving our customers as we always have” and that they should “see no change in [their] day-to-day responsibilities.”
The business continued to operate normally for more than a month. On Dec 8, Katzman emailed employees informing them that they were laid off, stating “effective today, we will be saying goodbye to all of our Team Members.”
The lawsuit looks to cover all individuals who were employed by and laid off by SmileDirectClub and Access Dental Lab on December 8, 2023.
Regarding SDC the marketing plan and assumptions of the business model were very appealing and seemed exciting. The failure, from my point of view, was the connection between the consumers’ neats and expectations and the analyisis of the “expert” doctors reviewing the cases. Having built thousands of aligner cases as a lab person I can tell you that many submitted case are just beyoud the capibilities of a handful of aligners. This is especially true when IPR isn’t available for needed maneuvering room.