Worley & Obetz filed for bankruptcy Wednesday and is now facing a class-action lawsuit filed by two former employees who allege the company violated a federal law that requires 60-day notice of mass layoffs.
The suit was filed Thursday in U.S. Bankruptcy Court for the Eastern District of Pennsylvania against the Penn Township-based energy company and two of its subsidiaries, Amerigreen Energy Inc. and Amerigreen Propane Inc.
The plaintiffs are Amy Daveler and Marco Perez, who were both laid off May 21, according to the lawsuit. They are suing the companies on behalf of themselves and dozens of other employees for the recovery of 60 days’ pay and benefits. The suits allege that the companies violated the Worker Adjustment and Retraining Notification Act, under which companies notify the government when they are planning mass layoffs.
The lawsuit claims that Worley & Obetz conducted a mass layoff of about 250 full-time employees on or about May 21 but did not give adequate notice under the WARN Act. The law calls for at least 60 days notice, the suit said.
“Upon information and belief, none of the terminated employees received any written notice of termination,” the suit claims.
Worley & Obetz did file WARN notices for some employees, according to a state website that tracks the notices. The notices cover 150 employees at Worley & Obetz, 25 employees at AmeriGreen Energy and an unknown number at both Molly’s Convenience Store and Ranck Plumbing Heating & Air Conditioning Inc.
Daveler worked as a sales manager for Worley & Obetz while Perez was in an operation sales position, according to the lawsuit.
The energy company and its subsidiaries shut down earlier this week amid news that it is being investigated for an alleged fraud related to a former executive. The investigation involves the Federal Bureau of Investigation, along with the Lancaster County district attorney’s office and Northern Lancaster County Regional Police, according to previous news reports.
Attempts to reach Seth Obetz, vice chairman of Worley & Obetz, were unsuccessful. Reached by phone, an attorney for Worley & Obetz declined to comment.
Efforts to reach attorneys for the plaintiffs were not immediately successful on Friday.
The suit is the latest blow for Worley & Obetz.
On Wednesday it filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court for the Eastern District of Pennsylvania. Chapter 7 generally indicates a desire to liquidate a business.
The filing also covers 10 subsidiaries, including Amerigreen Energy Inc. and Ranck Plumbing Heating & Air Conditioning.
The filing lists assets of between $10 million to $50 million and liabilities between $50 million and $100 million. According to Business Journal records, Worley & Obetz reported revenue in 2015 of $520.5 million. It did not report revenue for 2016.
The bankruptcy filing also says the company has 1,000 to 5,000 creditors.
While most creditors are unknown, at least two are: Fulton Financial Corp. and F&M Trust. Both confirmed this week that Worley & Obetz was responsible for multimillion-dollar credit losses at each institution.
Two other Pennsylvania banks – S&T Bancorp Inc. and Univest Bank and Trust Co. – reported multimillion-dollar losses last week in Security and Exchange Commission filings. They have both declined to identify the borrower that triggered the losses.