Guzman y Gomez Faces Class Action Over Abrupt US Exit

MT Newswires Live

May 25

Guzman y Gomez (ASX:GYG) faced a class action lawsuit in the US over allegations that it did not provide local staff adequate notice before shuttering its operations, according to multiple media reports on Monday.

The Mexican-themed restaurant operator last week said it is exiting the US market with immediate effect, as the business has not delivered sales momentum and is not meeting financial targets.

The federal lawsuit filed in the US over the weekend claims the company "abruptly closed" its Chicago restaurants at the end of business on May 21 without providing workers with a legally required written notice 60 days in advance, the Australian Financial Review reported.

The lawsuit seeks up to 60 days' worth of pay and benefits for an estimated more than 500 employees impacted by the exit, the Guardian reported.

In a statement to MT Newswires, Guzman y Gomez said it is aware of the lawsuit and is "confident we have met all of our legal obligations to our US employees."

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