Hanergy named in class action complaint by ex-employees at Alta Devices

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The law firm of Cotchett, Pitre & McCarthy (CPM) has filed a class action complaint against Hanergy and Alta Devices on behalf of approximately 300 ex-Alta employees.

Late last year, pv magazine reported that Hanergy-owned Alta Devices, the world record efficiency holder for single-junction solar cells, “furloughed” almost all of its Sunnyvale, California staff without pay, notice, or PTO. This was according to several of the almost 300 employees affected.

pv magazine spoke with an ex-Alta employee on Sunday who called CPM a “high-profile law firm” and pointed out that a viable route to reaching the non-responsive Hanergy was through the Alta CEO, as well as some other upper-management, who were also Hanergy employees.

According to the legal filing:

  • “Defendants abruptly shut the doors to their Sunnyvale, California factory, leaving almost 300 employees without a job—and without their final paychecks— just before the holiday season. Defendants abandoned employees without any pay and left them in the lurch—providing no official notice of termination, and repeatedly promising that the plant would be back up and running any day.”
  • “In the meantime, employees are having trouble paying bills and are left with uncertainty relating to healthcare coverage after being given false hope that Defendant Hanergy would reopen the Alta plant and resume operations as usual.”
  • “Defendant Hanergy, a company with over 15,000 employees based in Beijing, China, is Alta’s parent corporation—providing funding and calling all the shots at Alta, including the decision to shut down the plant. Hanergy has engaged in similar conduct in China: abruptly closing manufacturing plants without paying employees their final wages, and even failing to pay employees for months at a time. Hanergy has now imported its egregious practices to California.”

The complaint further notes, “Hanergy, however, is not above the rule of law, and this is not China. In abruptly closing the Alta plant, Defendants violated the federal and California WARN Acts, which require at least 60 days written notice of termination where a plant is shut down and/or mass layoffs occur,” adding, “Under both California and Federal law, Hanergy is liable for these employment practices as Alta was dependent upon and controlled by Hanergy.”

Miasole, Global Solar, Solibro too

In 2013, Hanergy acquired gallium-arsenide solar developer Alta Devices for an undisclosed amount. Alta joined CIGS firms MiaSolé, Solibro and Global Solar Energy under the Hanergy roof. With little synergy among the acquired firm’s VC-funded technologies, Hanergy’s solar shopping spree appeared less than focused.

Although not part of this complaint, China “furloughed” almost all the employees and halted manufacturing at those three American solar companies and at Germany’s Solibro — as well as at its China headquarters. Those unannounced layoffs with no pay or benefits  left more than 600 American workers in the U.S., 180 employees in Germany, and thousands in China unemployed and in the dark.

Hanergy’s rise and fall

In 2015, Hanergy became the world’s largest solar company by market cap, and Li Hejun, the founder of Hanergy Group, China’s fifth-richest man. The Hong Kong-listed subsidiary of Hanergy, Hanergy Thin Film Power Group, had a market cap of $14 billion compared to the $5.5 billion market cap of First Solar, an actual solar firm, at that time.

The company’s stock price plunged and trading in Hanergy Thin Film shares was halted in May 2015 after news that the company’s finances had been inflated by intra-unit trading. Hanergy was eventually delisted.

Unable to pay its debts, Hanergy was forced to sell its only real asset, a hydro power station, to creditors. The commercial future of Hanergy is uncertain.

Hanergy left its employees in the dark

Hanergy corporate has not responded to inquiries from pv magazine. Employees have expressed concern over the fate of the thin-film intellectual property and know-how that might be lost.

An ex-employee shared a rumor that equipment lease company Utica had taken control of Alta assets and IP and was looking for an acquirer for those assets.

Utica Leaseco, Alta’s senior lender since February 6, 2017, states, “After Alta ceased operations, Utica got involved and is assisting in efforts to sell the company. SSG Capital Advisors, LLC, a well-recognized investment bank, has been retained to manage the sale process.”

The U.S. WARN Act requires that an employer provide “notice 60 days in advance of covered plant closings and covered mass layoffs.” There are exceptions to the 60-day notice for “faltering companies” and “unforeseen business circumstances.