ITT Tech Lawsuits Raise Fraud Claims Over Sudden Closing

Just days after it was forced to shut down, ITT Technical Institute faces a growing number of lawsuits from employees who claim it failed to provide the required 60 day notice before leaving them without a job, and a large number of lawsuits from students are likely to follow. 

ITT Educational Services Inc. announced that it is closing all 130 ITT Tech campuses nationwide on September 6, after the Department of Education announced it would no longer allow students receiving financial aid to enroll and would limit the school’s federal contributions, due to years of financial and administrative concerns. The closures affect 35,000 students and 8,000 employees.

On Thursday, former employee Christin M. Long filed an ITT Tech class action lawsuit, claiming the company failed to provide its workers with 60 days notice of mass layoff as required by the federal Worker Adjustment and Retraining Notification (WARN) Act.

The complaint (PDF) was filed in the U.S. District Court for the Southern District of Indiana, indicates that workers had no notice and were left suddenly without employment.

The lawsuit claims that ITT Tech had known for months, or even years, that it was in jeopardy of being shut down, but failed to disclose that information to employees. At least two other employees have filed similar lawsuits.

According to an open letter to ITT Tech students by U.S. Secretary of Education John B. King, Jr., ITT Tech has been the target of a number of state and federal investigations regarding it’s administration and finances, as well as its ability to serve students. Long’s lawsuit indicates that ITT Tech knew it was in trouble as far back as April 2016.

“The school’s decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk,” King said in the letter. “Last week, the Department of Education took oversight actions to prevent ITT from continuing to add to that risk.”

Long worked as a campus director at ITT Tech’s Strongville, Ohio location and says she received an e-mail informing her that her job had been terminated the day ITT Tech shut down. Her lawsuit indicates that there was no prior warning for the company’s 4,100 full-time and 4,300 part-time workers that they would soon be unemployed.

Additionally, on Friday, September 2, ITT Tech CEO Kevin Monday told employees that they were being given an extra day off on the day after Labor Day as an “extra comp holiday.” While the employees were enjoying their supposed extended holiday, they received e-mails notifying them of the loss of their jobs and ITT Tech’s closure.

The lawsuit seeks class status for all employees, which it says should be paid for the 60 days they should have been given warning about the schools’ closing.

ITT Tech Student Lawsuits

In his letter, Secretary King acknowledges that those hardest hit may be the ITT Tech students, some of whom have already taken out expensive financial aid loans, and many of whom were close to graduating, and are left with credits that may not transfer.

The Department of Education is giving students two options. They may be eligible to have their federal student loans for ITT Tech discharged, but they will have to restart their education from the beginning. Alternately, they can attempt to find a school that will accept their ITT Tech credits and continue their education, but that could limit their ability to have their financial aid forgiven.

The Department of Education is also hosting a series of national webinars to share information with ITT Tech students and to answer their questions. The webinars run through September 22.

It is likely that a large number ITT Tech fraud lawsuits will be filed by students, who have been left in the lurch by the sudden closing and may face substantial damages.