Nextbite faces lawsuit for not giving enough notice ahead of mass layoffs

Joanna Fantozzi

A former Nextbite employee is suing the virtual restaurant brand — now owned by the CEO of its former competitor, SBE — for not giving the requisite 60-day notice before laying off  approximately 130 employees without cause in May, as stipulated in the WARN (Worker Adjustment and Retraining Notification) Act. Plaintiff and former Nextbite supply chain analyst, Alitza Portohundo, filed the proposed class action lawsuit in the District of Delaware on June 2, and is one of 90 employees that were part of a mass layoff on May 15, termination effective immediately.

According to the lawsuit, the WARN Act stipulates that employers must give at least 60 days of notice if more than 25 employees (or at least one-third of all staff) are part of a round of layoffs, and the Nextbite layoffs fulfill those requirements. Nextbite allegedly declined to pay its ex-staffers their salaries and benefits for those 60 days after terminations and were told their health insurance would run out at the end of the month.

The plaintiff specifically mentioned that she was supposed to be on maternity leave with pay and benefits until June 17 and is now uninsured while she cares for her baby’s health conditions.

“Had the plaintiff been provided WARN notice, she would have had two months to attend to her newborn while looking for a job under the umbrella of healthcare coverage,” the lawsuit reads, stipulating that she was not the only employee who lost parental care following the layoffs. “Her immediate priorities would not be scrambling to find insurance and a way to pay for it – along with all her other needs - until she can find work.”

Related:Nextbite’s failures are a warning for the entire virtual restaurant industry

The plaintiff is seeking other former employees to join the proposed class action lawsuit and seeks to be paid for the 60 days of accrued salaries, health coverage, vacation time and other benefits that allegedly should have been given under the WARN Act for 60 days.

During the height of the pandemic, Nextbite was one of the buzziest virtual restaurant companies to grow and thrive out of restaurant lockdowns, known for its celebrity partnerships with Wiz Khalifa and George Lopez. After enduring its third round of layoffs in the past 14 months and selling off its technology arm, Ordermark, to Indian company, UrbanPiper, Nextbite has now been sold to SBE CEO Sam Nazarian — who heads the parent company of its (former) competitor and fellow virtual restaurant company group, C3.

Contact Joanna Fantozzi at [email protected]