SEATTLE — A Seattle-based startup is facing a class-action lawsuit from a group of former employees who say they were not given proper notice by the company before more than 500 layoffs were announced last week.
Convoy, which calls itself the "leading digital freight network," told employees in an October 19 email that it was "closing the doors on its current core business operations and exploring and evaluating strategic options for what might come next."
Michael Pfingsten, a customer account specialist for Convoy from September 2021 until the announced layoffs, is the named plaintiff in the lawsuit along with approximately 500 other former employees of the company.
The suit alleges that Convoy did not provide Pfingsten or his fellow plaintiffs with the required 60 days of written notice as part of the Worker Adjustment and Retraining Notification (WARN) Act.
Convoy is being asked for 60 days of severance and benefits as well as attorneys' fees by the group of employees.
The company was valued at $3.8 billion after an April 2022 funding round, according to the Wall Street Journal. However, founder Dan Lewis told employees in his layoff announcement that "we are in the middle of a massive freight recession and a contraction in the capital markets. This combination ultimately crushed our progress at the same time that it was crushing our logical strategic acquirer - it was the perfect storm."
The company is "in talks" with Flexport, a San Francisco-based freight forwarder, to sell away its technology, according to a Wall Street Journal report on Friday.