Former Sungevity employees file class action lawsuit

The news from Sungevity just getting worse. Last week a former employee filed a class-action lawsuit against the bankrupt residential solar company, demanding accrued vacation pay and alleging that Sungevity failed to comply with federal and state law.

Under the Worker Adjustment and Retraining Notification (WARN) Act, under most circumstances companies with more than 100 employees must provide 60 days notice before layoffs and plant closings. Sungevity filed a WARN Act notice in January for 66 employees that it laid off in Oakland, but provided no notice for the layoffs on March 9.

However, it is not only lack of warning that former employees are suing over. They are also suing over accrued vacation and personal time off for which they were not compensated and unpaid commissions and bonuses, as well as Sungevity’s alleged failure to make pension and 401(k) contributions. Employees also accuse Sungevity of failing to pay into health plans. Some of these are addressed in California and Missouri state law.

Additionally, according to emails seen by pv magazine, the law firm retained by former Sungevity employees will be looking into the issue of bounced paychecks. According to pv magazine sources, not only have paychecks issued by the company to workers laid off on March 9 failed to clear, but the final severance checks to workers laid off in January have also failed.

Sungevity has promised to issue new checks to its workers, however some of these former employers are claiming that the original checks which they received were returned by their banks as fraudulent.

Court filings show that the situation may be more complicated. In a filing from last Friday, Sungevity claims that its bank has wrongfully reversed $326,000 in checks to 184 former employees, and has filed several motions to the courts to be allowed to pay its workers.

In the filing, Sungevity notes that “failure to remit these amounts to the Former Employees could potentially expose the Debtors, as well as their directors and officers, to additional liability under applicable state and federal labor laws.”

Sungevity has received a pledge of $20 million in emergency funding from its proposed buyer, however court records also show $169 million in debt. The next hearing in Sungevity’s case will be April 12.