Flexsteel Industries has agreed to pay $1.3 million to settle a lawsuit filed by employees laid off when plants in Dubuque and Mississippi closed, according to court documents.
A group of former employees suing the company recently filed documents stating that such a settlement has been reached during a “private mediation session” and requested that a federal judge grant class-action status to the suit. Those documents note that those being sued — Flexsteel, President and CEO Jerry Dittmer and Chief Financial Officer and Chief Operating Officer Dereck P. Schmidt — “do not resist the motion.”
If approved, about 300 former employees would receive payments ranging from less than $1,000 to “just over $15,000,” depending on a range of factors.
Six former employees, including three that worked at the Dubuque plant, filed the lawsuit in March 2021. They alleged that Flexsteel did not pay out severance benefits when it discontinued its recreational vehicle and hospitality lines in April 2020, leading to the closures of plants in Dubuque and Starkville, Miss.
The former employees said the company used “the pandemic as a reason to accelerate a long-planned company restructuring” and that, up until that time, the company had been providing 60 days’ notice of terminations and with severance pay in accordance with federal laws.
No such notice or pay was granted for the Dubuque or Mississippi workers.
In the company’s response to the initial lawsuit, Flexsteel argued that “the terminations of any affected employees in Dubuque or Starkville as referenced … were caused by business circumstances that were not reasonably foreseeable 60 days prior to the dates on which the terminations of employment occurred or at the time of the initial layoffs.”
If the settlement and class-action status are approved, court documents state that affected workers would receive a mailed, postcard notice and that a fuller notice of the settlement and terms would be available on a to-be-developed website.
It is unclear when a judge might rule on the settlement request.