A class-action lawsuit has been filed against Portfolio Recovery Associates by former employees of the company who allege the collection company violated the Worker Adjustment and Retraining Notification (WARN) Act by firing them using the coronavirus pandemic as the reason for closing an office when it fact the company had been planning on closing it for months because it was under-performing.
A copy of the complaint in the case of Butler et al v. Portfolio Recovery Associates can be accessed by clicking here.
PRA closed an office in Las Vegas on March 23 which employed about 200 individuals. The office had opened in 2018, but had been suffering from performance and complaints and was not performing as well as other offices maintained by the defendant, according to the complaint. The defendant had communicated to employees of the Las Vegas office last year, as it was making plans to open a new facility in Virginia, that if performance did not improve, the Las Vegas office would be shut down. The complaint alleges that the defendant began recruiting staff to transfer from the Las Vegas office to other offices operated by the defendant across the country.
When the COVID-19 pandemic hit, that provided the defendant with a pre-text for closing the office and a failure to comply with the WARN Act. It is not mentioned in the complaint, but the week prior, the Financial Institution Division of Nevada’s Department of Business and Industry released guidance that ordered all non-essential businesses –including collection agencies — to close for the next 30 days.
Nonetheless, the plaintiffs allege the defendant did not inform the proper authorities about the layoffs and owe employees for wages that should have been earned — 0.01923 hours per hour worked — while they were booting up their computers before their shift started and after lunch so they could clock in to work.
