More than 500 former employees of fast-food chain Guzman y Gomez (GYG) have launched a class action lawsuit in the United States.
The legal challenge comes a week after the Australian company shut down its U.S. stores, saying its success “was not translating” to the American market.
Documents filed in a Chicago court allege GYG breached workers’ rights by failing to provide the legally required 60 days’ notice before terminating staff.
A spokesperson for GYG said the company is “confident we have met all of our legal obligations.”
GYG
Guzman y Gomez is an Australian-based fast-food company founded in 2006 by two American entrepreneurs.
The chain went public in 2024 after expanding to more than 220 stores across Australia, Singapore and Japan.
Last week, the company announced it would “exit the U.S. market” and cease trading effective immediately, citing poor sales performance.
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Lawsuit
In a class action lawsuit filed last week, former employees across six Chicago franchise locations allege they were unlawfully dismissed by GYG.
The complaint claims the company breached workers’ rights by firing staff without notice.
According to the lawsuit, employees were told of the immediately effective closures through an internal messaging platform on the night the announcement was made public.
In the U.S., employers are generally required under federal law to provide workers with at least 60 days’ notice before large-scale layoffs.
The lawsuit is estimated to represent around 500 employees seeking 60 days’ unpaid wages and benefits.
In a statement to TDA, a GYG spokesperson said the company was aware of the legal challenge but was “confident we have met all of our legal obligations to our US employees.”
