Zirtual gets hit with a lawsuit from fired employees

Zirtual suddenly shut down on Monday, firing 400 employees, before it was saved by Startups.co

Earlier this week virtual assistance company Zirtual suddenly announced that it had paused all operations, laying off its 400 employees without notice.

Everything seemed to turn out alright in the end when it was bought, and subsequently saved, by Startups.co, but it turns out that those employees were pretty angry about what happened, and now they are going after their former (current?) employer for damages. 

The company is being hit with a class action lawsuit, accusing the company of violating The WARN Act, which is a labor law that protects employees by requiring that employers with 100 or more employees to give them 60 calendar-day advance notification of plant closings and mass layoffs of employees.

Zirtual is a company that connects customers with remote assistants who can assist them with tasks, such as answering their e-mails, scheduling and doing online research. 

The lawsuit comes from one employee, named Felice Martin, who was a "Zirtual Assistant" with the company. She was fired on August 7 "without notice," and subsequently brought this lawsuit on behalf of herself and her fellow employees.

The plaintiffs in the case are seeking to recover the value of 60 days wages and benefits.

In Zirtual's explanation for why it suddenly shut down, the company said that it was supposed to be raising new funding, but it fell through, and, according to what Maren Kate Donovan, CEO of Zirtual, wrote in a subsequent blog post, "the law required us to terminate everyone when it became clear to us that we wouldn’t be able to make the next payroll."

"The reason we couldn’t give more notice was that up until the 11th hour, I did everything I could to raise more money and right the ship," she said. 

Now that Zirtual is a part of Startups.co all operations will transfer to over to the new company. In an FAQ  from Startups.co, the company that it is going to try to hire back as many of the virtual assistants that it can.

"Ideally we’d like to keep everyone, but given that the previous state of the company was unsustainable, it’s not reasonable to think we can continue to do so. Prior to the announcement, the company had employed over 400 professionals, so we have a lot of work to do to determine how many we can retain," it said.

"In the interest of getting everyone back to work quickly, we will issue a contractor agreement to ZAs who we are able to place back into the field. We will calibrate compensation to be comparable to previous levels wherever possible. We have to wait until we assess the client volume and ZA utilization before we can begin discussing any other compensation terms."

The same process will apply to Zirtual's 30 other employees, who handle technology, operations, marketing and administrative duties.

It should be noted that this lawsuit was filed on Tuesday, when it looked like Zirtual was going to be shut down for good, and before the news of the acquisition from Startups.co.

Zirtual District Court Complaint (Filed)

This lawsuit was first discovered by the Las Vegas Sun.

VatorNews has reached out to Zirtual for comment on this lawsuit. We will update this story if we learn more. 

(Image source: zirtual.com)