Ex-Canoo workers sue company for WARN Act violations after layoffs

A group of former employees at Canoo Inc., an electric vehicle startup, have initiated legal action against the company for violating federal labor laws through sudden mass layoffs. The lawsuit, filed in the U.S. Bankruptcy Court for the District of Delaware, encompasses at least 50 individuals who lost their jobs without adequate notice when Canoo ceased operations on January 16.
The lawsuit, which is now a class-action suit, was brought about by a former Canoo employee from the company’s Oklahoma City facility on behalf of himself and roughly 300 other affected employees. Their main contention revolves around Canoo violating the Worker Adjustment and Retraining Notification (WARN) Act. This act mandates that companies with over 100 employees must offer a 60-day notice before significant layoffs occur.
Canoo’s troubles began when it started furloughing workers back in November 2024 while it was scrambling to secure more funding. The company, which arrived in Oklahoma in 2023 with promises of generating 1,400 job opportunities and introducing a fleet of 1,000 vehicles to the state, ultimately declared Chapter 7 bankruptcy on January 17 following its inability to secure federal loans or attract foreign investors.
Aside from WARN Act violations, the lawsuit also alleges transgressions under the Employee Retirement Income Security Act (ERISA). It claims that Canoo deducted insurance premiums from employee salaries without allocating these funds to the proper benefit plans. Therefore, the plaintiffs are seeking repayment for these unfulfilled obligations from the company.
Numerous entities linked to Canoo, including EV Global Holdco LLC and Canoo Technologies Inc., are named as defendants in the lawsuit. The legal action maintains that these entities functioned as a unified entity and should be held jointly accountable for the purported labor law breaches. Despite these allegations, Canoo has refrained from issuing any public statements regarding the lawsuit filed against it.