Ex-Zulily employees say they didn’t receive required layoff notice or pay in new class action lawsuit
Former employees at Seattle-based e-commerce company Zulily filed a class action lawsuit this week alleging that they did not receive adequate advance notice or pay related to widespread layoffs last year.
The suit alleges that Zulily’s former owner, Regent, violated a federal law passed in 1988 known as the Worker Adjustment and Retraining Notification (WARN) Act.
The law aims to protect workers by typically requiring either a written warning at least 60 days before a layoff, or 60 days of severance if advanced notice is not provided, for companies with 100 or more full-time employees.
Regent did not offer 60-day WARN Act notices or pay to employees who worked remotely, according to the suit. Regent’s lawyers “had supposedly found a ‘loophole’ in the WARN Act for remote workers under which the statute allegedly did not apply to them,” according to the suit.
“This was not accurate, however, and the WARN Act does in fact cover remote workers who are affected by a ‘plant closing’ or ‘mass layoff’ as defined by the statue,” according to the suit, filed in federal court in Seattle on Monday.
Plaintiffs in the suit are Jittania Smith, a former Zulily software engineer, and Kathryn Costello, a former merchandise director. They intend to represent all Zulily remote workers in the state of Washington and state of Nevada.
HKM Employment Attorneys LLP is representing the plaintiffs.
GeekWire contacted Regent for comment on the lawsuit.
Assignment of remote workers under the WARN Act is a “complex and unsettled issue,” according to a blog post from law firm Maynard Nexsen, given how the law was written and the nature of remote work today.
Zulily initially launched in 2010 and grew into an e-commerce giant that served moms and kids through its online flash sales platform.
Zulily was acquired in 2015 by QVC’s parent company for $2.4 billion, but struggled to regain the magic that helped propel the business in its earlier years.
Under ownership of private equity firm Regent, which acquired Zulily in May 2023, the company saw rapid deterioration including layoffs, unpaid vendors, and ultimately liquidation in late 2023, despite still generating hundreds of millions in sales that year.
Beyond Inc. announced an agreement to acquire Zulily’s brand assets for $4.5 million in March and is rolling out a relaunch this year.
A spokesperson for Beyond said that the company is not involved in the lawsuit.
“Beyond, Inc. purchased certain intellectual property assets of the now-defunct legacy Zulily in March 2024; therefore this case is against the legacy Zulily entity, and Beyond, Inc. has no involvement,” the spokesperson said in a statement.
Seattle startup Convoy faced a similar lawsuit related to the WARN Act last year after the company’s sudden shutdown. That case was dismissed in March.
Zulily is still involved in a lawsuit the company filed against Amazon in December, when it was still under Regent’s ownership.