MDL Sought for Lawsuits Over ITT Tech Closing

As a growing number of employees and former students file lawsuits over ITT Tech closings nationwide, a petition has been filed with the U.S. Judicial Panel on Multidistrict Litigation (JPML) to consolidate the cases before one judge for coordinated pretrial proceedings.

Earlier this month, ITT Educational Services Inc. announced that it was 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 after years of financial and administrative concerns. The closures affected 35,000 students and about 8,000 employees.

Following the ITT Tech closings, some employees began filing lawsuits alleging that the company failed to provide adequate advance notice, as required by law, that they were going to be laid off or released from their jobs.

On September 9, plaintiff Christin Long filed a motion to transfer (PDF) with the U.S. JPML, asking that cases filed in U.S. District Courts nationwide be centralized to reduce duplicate discovery into common issues, avoid conflicting pretrial rulings from different courts, and to serve the convenience of the parties, witnesses and the courts.

The motion indicates that there are currently at least four ITT Tech lawsuits by employees in three different U.S. District Courts. However, that number is expected to increase, and it is likely that ITT Tech will face consumer fraud lawsuits from students as well.

“This case arises because Defendant ITT terminated more than 8,000 employees in 38 states on September 6, 2016 without any advance warning when ITT abruptly closed the doors of its approximately 130 ITT Technical Institute campuses. Of those more than 8,000 employees who were terminated without notice, approximately 4,100 were full-time ITT Technical Institute instructors and 4,300 part time instructors. Notwithstanding the lack of any forewarning to its employees, it was reasonably foreseeable to ITT that it would not be financially viable for its school to continue operating.”

The motion and the lawsuits note that ITT Tech has struggled since August 2014, when the U.S. Department of Education required the company to pose an irrevocable surety in order to allow ITT Tech campuses to participate in federal student aid programs. The motion also notes that the company had “reason to know that its accreditation was in jeopardy as early as April 2016.”

Long’s motion calls for all ITT Tech closing lawsuits to be consolidated in the Southern District of Indiana under Judge William T. Lawrence.

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 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.

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.

U.S. Secretary of Education John B. King, Jr., said in a letter earlier this month that  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.