Legal

Munchery Sued By Ex-Employees Over Shutdown

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A new class-action lawsuit wants failed meal delivery company Munchery to pay its former employees 60 days’ worth of back wages.

The lawsuit, filed by former Munchery facilities worker Joshua Philips, cites the Worker Adjustment and Retraining Notification Act, a U.S. labor law that requires employers with more than 100 employees to give notice 60 days ahead of mass layoffs. San Francisco-based Munchery announced in an email to customers last week that it was immediately shutting down.

The news wasn’t a complete surprise since the company has been in trouble since last year. In May it laid off 257 employees, which came after it shut down service in Seattle, Los Angels, and New York. The company had claimed it would focus on its largest market, San Francisco, but that never happened.

“Since 2010, we have been committed to bringing fresh, local, and delicious meals into your homes along with all our customers across the country,” the company wrote in the e-mail announcement. “We’ve been delighted to work with world-renowned chefs, experiment with diverse and unique ingredients and recipes, and be a part of your holiday feasts and traditions. We have also enjoyed giving back to our community through meal donations, volunteer service, and so much more.”

As for the lawsuit, Philips is seeking equal to the sum of his and other affected employees’ “unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other ERISA benefits, for 60 days, that would have been covered and paid under the then-applicable employee benefit plans.”

Munchery’s employees aren’t the only ones looking to get paid. The startup’s former vendors say that they’re still owed tens of thousands in overdue payments.

“They entered into a 14-month payment plan with us to cover nearly $150,000 in debt, but never had the intention of fulfilling their obligation,” an LA-based Munchery vendor, who asked not to be named, told reporters. “The entire meal prep business is not sustainable on a grand scale like these companies envision.”

In addition, Munchery has yet to send final paychecks to its delivery drivers.

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