SEATTLE — Ex-employees of formerly Seattle-based Zulily have filed a class-action lawsuit against the company, alleging that many employees were not given proper notice or pay after mass layoffs in late 2023.
The suit, filed Monday in U.S. District Court in Seattle, says only in-person employees were given proper notice when the company announced it was laying off. The lawsuit says some of the laid-off remote employees were told the company's lawyers had found a loophole in the Worker Adjustment and Retraining Notification (WARN) Act that it does not cover remote workers.
Zulily was liquidated by its parent company, Regent, in December 2023. The company's remaining 839 employees, including nearly 300 working out of the company's then-headquarters on Jackson Street in Seattle, were laid off, according to the lawsuit. The company also had 273 employees reporting to a Nevada fulfillment center and 274 to a fulfillment center in Ohio. All three of the company's locations were closed and deemed "plant closings" in legal filings, the lawsuit says.
The class action represents former remote employees of Zulily in Washington and Nevada, according to the lawsuit. The lawsuit says that while some employees were remote and worked some or all of the time from home, all were "assigned or tied to specific brick-and-mortar locations." The lawsuit says employees assigned to what was then the corporate headquarters had to visit the office for meetings or other work-related matters, even if they were considered remote.
Zulily had a company policy that required remote employees of the Seattle office to work in-person for three to five days a month, the lawsuit alleges. Remote workers tied to the Ohio fulfillment center were required to live within 50 miles of their assigned location, the lawsuit says.
Regent purchased the company in May 2023 but made the decision to liquidate just months later and initiated three rounds of layoffs, the first in October of that year and two other rounds in December.
"Defendant Regent made the calculated decision, in consultation with its lawyers, that it could save money because of an alleged loophole in the WARN Act; namely, that it supposedly did not apply to fully or partially remote workers," the lawsuit reads.
"However, that is not correct. The WARN Act does, in fact, apply to both fully and partially remote workers. Certain members of management told laid-off employees that Defendant Regent had made the decision to not provide WARN Act notice or pay to remote workers for these reasons," the lawsuit continues.
Instead of declaring bankruptcy, Zulily used an alternative for winding down the business known as an Assignment for the Benefit of Creditors, or ABC. The company has transferred all its assets and business in trust to Zulily ABC, LLC, to pay creditors out of proceeds from selling them.
Zulily's brand assets were purchased by Beyond, Inc. in March 2024.
The Associated Press contributed to this report.
