Employees at the former ESPN Zone restaurant in Baltimore who were laid off without notice when the Inner Harbor attraction closed in 2010 were not compensated correctly under federal law and are due additional payments, a federal judge ruled Thursday.
About 140 full- and part-time employees worked at the restaurant when it was closed June 15, 2010. In October 2010, a class-action lawsuit was brought against Zone Enterprises of Maryland, a subsidiary of the Walt Disney Co., alleging that the company failed to give the employees 60 days' notice, as is generally required of companies with more than 40 employees under the federal Worker Adjustment and Retraining Notification, or WARN, Act.
The Baltimore restaurant was one of five ESPN Zone locations nationwide closed at the time. Workers marched in protest at the Inner Harbor following the closure.
The company argued that it had honored the law by paying full-time employees, who were entitled to severance as part of their benefits package, and part-time employees, who were not, their regular wages during a 60-day "notice period," in lieu of actual notice.
But according to Andrew D. Freeman, the attorney who filed the case on behalf of the employees, the company based its wage calculations on the earnings of the employees six months prior to the closure of the restaurant, during a period of heavy snow in Maryland when their wages were much lower than other periods during the employees' employment history. Freeman said that violated the law.
Freeman, of the Brown, Goldstein & Levy law firm, also argued that Disney had violated the law by deducting the "notice period" payments made to the full-time employees from their severance. Freeman said the full-time employees were entitled to 60 days' notice, or the equivalent in pay, as well as their severance.
U.S. District Court Judge Catherine C. Blake agreed on Thursday, writing in her opinion that the employees "are entitled to their full severance pay as a matter of law."
Rob Tobias, an ESPN spokesman, said the company was disappointed with the judge's decision and still believes it "acted in accordance with the WARN Act."
Payments will be reviewed and recalculated for all 140 or so employees, based on a calculation approved under the WARN Act, such as the average regular rate received by the employees during the last three years of their employment, Freeman said.
Those full-time and part-time employees who are owed more under the new calculations than they received will be paid the difference, Freeman said. If an employee was paid more under the original calculations than they are determined to be owed under the new calculations, they will not have to repay the difference to Disney, he said.
Full-time employees who were also due severance under the company's benefits plan will receive that in full, Freeman said.
Disney will be able to subtract payments already made from any new wage and severance totals, he said. Tobias said the company is pleased about that.
Freeman said he has been in touch with many of the 140 employees and has 2010 addresses for the others. He expects most, if not all, to come forward to receive payments once they are determined, he said.
Freeman said he does not know when that will be.
"We are very pleased by Judge Blake's opinion, which we think is thorough and thoughtful and does a real service to these employees and employees all over the country," he said. "Our one disappointment is that it has taken two and a half years to get here."