In our spotlight on Business Report tonight.

Party city employees are suing their employer after the New Jersey based party store announced on December 20th that it was filing for bankruptcy and laying off staff effective that same day.

One employee we talked to who worked at a corporate job at Party City for almost three years shared what it was like being laid off on a virtual meeting.

It's really the way that this was put down.

And I see zero communication.

And I think with this, like the leadership overall, they do need to be held accountable because at the end of the day, this was a big group of people.

And there are some people I mean, I was there only for three years, but there are some people there that were hitting 20 years, 30 years, and it just kind of felt like a betrayal to them, a little more like an abandonment.

And I think that's really important to know that these are people's lives and the executive team did not take any of these people's lives into consideration at all when they had zero communication sent out to us.

Workers here in New Jersey are entitled to 90 days notice before being laid off.

Under the state's strict WARN Act, that applies to any company with 100 or more employees.

That would certainly include party city that has some 400 employees.

Just added to what Cliff Lake headquarters alone on top of its 25 stores across the state and a total of 850 stores across the country.

Those New Jersey employees who got their pink slips, they filed a class action lawsuit against Party City led by attorney Jack Razor, who joins us now.

Jack, great to have you with us here tonight.

We know that party city gave employees notice on December 20th that they were fired effective immediately.

Tell us about the New Jersey WARN Act and the federal WARN Act and why you've brought this case.

Both warn acts require that employers give adequate notice before people terminated under the federal law.

60 days under the WARN Act.

90 days.

So you have to be given a written notice telling you that now it's time basically for you to start taking steps, precautions, looking for job saving money, etc., against the moment when you're not going to have income, you're not going to have insurance.

So that's the purpose of both of these warn acts to get notice.

And in the case of Party City, no notice was given prior to the shutdown, as you just mentioned, on December 20th.

We know that New Jersey's WARN Act, as you just alluded to, is more stringent, 90 days required here in the state versus federally.

You said you filed suit for both violations of both laws.

One employee brought this suit.

Explain who's included right now in this class action lawsuit and who is not.

Sure.

The class action seeks to create a what's called a class that will include all those who were let go on the 20th of December, all of whom worked at the headquarters.

What coast?

New Jersey, as far as we know.

It may lead to further terminations at other locations, including the stores.

Those aren't included because those employees have not been terminated.

The purpose of the termination was to get rid of the people who are no longer doing the buying and doing the corporate work.

The stores are in overdrive to try to sell out their inventory during the holiday season, post-holiday season sales.

We've only included those who are practically been let go now without notice from that location, but it's around 400 people.

And also we don't know yet when those stores will close.

Is it possible that party city finds itself in violation once again if those stores are not closed with enough notice?

Well, sure, anything's possible.

What normally happens is that there's a wind down of the stores as they complete those sales.

And at that point, the employees are let go.

And the terms and conditions and circumstances of that, we don't know yet precisely, But that is a common sequence that happens in all of the shut downs, like Toys R US, which was the largest of the New Jersey based retailers to go through this.

What are you seeking for your employees?

What does the law provide if the WARN Act is violated?

So each of those two ward acts will provide something slightly different under the federal law.

One gets two months of back pay.

That's the normal pay, plus all the benefits they would have received that they didn't like health insurance.

That's a 60 day package.

The New Jersey law is unique in that what it provides is one week of severance per year that the employee was employed, which would be very nice for a person who's been there for 30 years.

That's 30 weeks, almost a year.

But for someone who's just hired, it doesn't sound very meaningful because they only get a week or two.

We were able to modify the New Jersey law so that now everybody gets four weeks, no matter how long they were working in the shutdown.

And then on top of that, they would get what the New Jersey law had provided up until the amendments that were effective two years ago.

And you were a part of those amendments When Toys R US closed its doors, you were a part of those lawsuits against that company.

But I have a question.

How if a company is going bankrupt, has filed for bankruptcy.

Do they make those payments if clearly they're out of money?

Well, bankruptcy is not the equivalent of being out of money when big companies go bankrupt.

They sometimes have millions or hundreds of millions of dollars or assets and in this case, parties city claimed that it has a billion or more dollars in assets.

So this is a question of their going out of business because their current billions of dollars in assets can't pay back the money that they owe to banks and to private equity owners, which could be $2 billion, and they'll never make enough money to pay back all of their creditors so they go bankrupt.

That doesn't mean that they are facing an empty cupboard.

Jack Reynor, we will be following this case.

Thanks for the insight on what's happened so far.

Jack Reasoner, founding partner at Reasonable Opinion.

Great to have you with us.

You're welcome.

Thank you.