Solyndra, the East Bay solar panel manufacturer that filed for bankruptcy protection two years after receiving a $528 million federal loan, settled a lawsuit with former employees who alleged they were unlawfully laid off.
Morgan Hill resident Peter Kohlstadt filed the initial lawsuit in September 2011, just days after the company went bankrupt. The complaint soon became a class action lawsuit on behalf of about 1,000 former employees.
In the settlement announced Monday, Solyndra offered $3.5 million to be spread among those former employees, Kohlstadt said.
Solyndra’s sudden downfall immediately made national headlines in September 2011. The company was the recipient in 2009 of a $528 million loan from the federal government. The loan was funded by President Barack Obama’s economic stimulus effort, but administered under an existing $30 billion program in the Department of Energy that started in 2005 to provide financing for the then-burgeoning renewable energy industry.
Kohlstadt, 50, explained he and other individual employees will receive 60 days’ pay based on their salaries at the time of the layoffs when the settlement is approved, he said. The initial complaint asked for reimbursement of all the vacation benefits the employees had accrued during their employment at Solyndra. Kohlstadt didn’t say how much the settlement will provide him.
“It’s a good outcome,” Kohlstadt said. “They’re not admitting any fault. A lot of the ex-employees also thought they would get most likely nothing. It gives some closure for them, and at least (the settlement) shows you can’t just drop people without any notice.”
According to the federal Worker Adjustment and Retraining Notification Act, any employer enacting mass layoffs of their workforce, and plant closings, must provide at least 60 days’ written notice to the employees who are to be let go, the former employees’ original lawsuit noted. The law generally applies to companies that employ 100 or more people.
Kohlstadt worked at Fremont-based Solyndra LLC for about 4.5 years as an engineer in the company’s product development group. Part of his job at the solar energy startup, barely a year old when Kohlstadt started working there, was testing the company’s newly designed rooftop panels (shaped more like tubes) that harness more of the sun’s energy than more traditional systems.
On Aug. 31, Kohlstadt was one of 1,100 Solyndra employees to be let go, effective immediately, with no warning. Two days later, he filed a lawsuit against the company, alleging they failed to give him the 60 days’ notice of layoff required by law, and withheld hundreds of hours worth of vacation pay he had accrued over the previous four years.
Kohlstadt has since found a job, and has been working full-time for a company in the Bay Area he declined to identify Tuesday.
The settlement is subject to approval by the U.S. Bankruptcy Court in Delaware, Kohlstadt said.
Private investors kicked in another $1 billion or so to Solyndra’s venture.
Kohlstadt was appointed to the creditors’ committee in Solyndra’s bankruptcy case after he filed the lawsuit last year. As such, he had a voice in shaping the company’s plan – subject to court approval – to repay the long list of investors, sub-contractors, banks and, Kohlstadt hopes, fired employees. That plan is still under review by the bankruptcy court.
In a news video clip posted on the website of the law firm Outten & Golden, which specializes in labor laws, attorney Rene Roupinian explains one exemption to the WARN law is the “faltering business” clause. In such cases, if a company knows it is on the verge of collapse, but is at the same time grasping for last-minute finance salvation, it could jeopardize its efforts to acquire that money by sending out 60-day layoff notices, Roupinian explained.
An e-mail sent to the address that remains on Solyndra’s website requesting comment bounced back to the Times.
