Lawsuit alleges Zirtual violated federal law with unannounced layoffs

By Daniel Rothberg

Thursday, Aug. 13, 2015 | 3:20 p.m.

A lawsuit alleges that Las Vegas-based Zirtual violated federal law when it terminated about 400 employees without notice on Monday.

Zirtual’s employees, many of them full-time, provided remote virtual assistants to executives at a subscription fee. The company notified its employees Monday that it had closed after undisclosed financial troubles.

By Tuesday afternoon, Startups.co, a company with several startups in its portfolio, had acquired Zirtual Inc.

“At this point we are still working through the acquisition process and have no comment” about the lawsuit, Startups.co CEO Wil Schroter said in a statement.

The complaint, filed against Zirtual on Tuesday, claims the startup ran afoul of the Worker Adjustment and Retraining Notification Act, which requires companies with more than 100 employees provide 60 days notice before plant closings or mass layoffs.

Under the statute, employers who do not comply with the requirements could be on the hook for employee pay and benefits for up to 60 days.

The lawsuit alleges that Zirtual terminated its employees without cause and is liable under the WARN Act. It seeks wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and COBRA benefits for 60 days.

The lawsuit was filed in U.S. District Court in Delaware, where Zirtual is incorporated.

The company, whose investors included the VegasTechFund, was headquartered at the Ogden condominium building in downtown Las Vegas. Zirtual also maintained an office in San Francisco.

The complaint was brought by a virtual assistant from California who reported to either the Las Vegas or San Francisco office, according to the lawsuit. After Zirtual responds to the complaint, lawyers will move to have the suit certified as a class action to bring similarly situated Zirtual employees into the litigation.

“We have every reason to believe the court will grant it,” said René Roupinian, a lawyer for Outten and Golden LLP, which specializes in employment law and is one of the firms that filed the case.