Former Canoo employees file class-action lawsuit over layoffs, alleging WARN Act violations

At least 50 former employees of the electric vehicle startup Canoo Inc. have filed a class-action lawsuit against the company and its affiliates, claiming the company violated federal labor laws by failing to provide adequate notice before mass layoffs.

A former employee at Canoo’s Oklahoma City facility, filed the lawsuit on behalf of himself and an estimated 300 other employees who lost their jobs when the company ceased operations on Jan. 16. 

The lawsuit, filed in the U.S. Bankruptcy Court for the District of Delaware, claims that Canoo violated the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers with more than 100 employees to provide at least 60 days’ notice before mass layoffs.

Canoo began furloughing employees in Nov. 2024 while attempting to secure additional funding. The company, which came to Oklahoma in 2023, promised to bring 1,400 jobs and a fleet of 1,000 vehicles to the state. However, after failing to obtain federal loans or attract foreign investors, Canoo filed for Chapter 7 bankruptcy on Jan. 17.

RELATED:

1. Canoo Unexpectedly Furloughs OKC Factory Workers Amid Financial Uncertainty
2. Canoo Inc. files for Chapter 7 bankruptcy amid financial struggles, ending operations
3. Canoo engineer shares insight on company's final days

The lawsuit also includes claims under the Employee Retirement Income Security Act (ERISA), alleging that Canoo deducted insurance premiums from employees' paychecks but failed to pay those funds into the appropriate benefit plans. The plaintiffs are seeking reimbursement for those unpaid contributions.

Canoo and its affiliated entities, including EV Global Holdco LLC and Canoo Technologies Inc., are named as defendants in the case. The lawsuit argues that these companies operated as a single entity and should be held collectively responsible for the alleged labor law violations.

Canoo representatives have not publicly responded to the lawsuit.