Zirtual’s Zeople Are Zuing

Here’s an update on Zirtual, the virtual-assistant startup that fired 400 Zeople (yes, Zeople) overnight via email.

Turns out Zirtual’s mass firing might have violated federal law, and the Zeople are putting together a zlass-zaction lawzuit. As the Las Vegas Sun reports:

The complaint, filed against Zirtual on Tuesday, claims the startup ran afoul of the Worker Adjustment and Retraining Notification Act, which requires companies with more than 100 employees provide 60 days notice before plant closings or mass layoffs.

Under the statute, employers who do not comply with the requirements could be on the hook for employee pay and benefits for up to 60 days.

The lawsuit alleges that Zirtual terminated its employees without cause and is liable under the WARN Act. It seeks wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and COBRA benefits for 60 days.

Slate, via Business Insider, adds another layer to the story:

But former employees say that Zirtual had already stopped paying for benefits in July even though it charged employees for this month. Insurance coverage had stopped July 31.

“Anyone who went to the doctor in August won’t have it covered,” said Katy Boyle, a former Zirtual Assistant or “ZA”. Her visit to the doctor on August 3, while still employed with the company, now has to come out of her own pocket.

Moreover, employees were only paid through August 7 — but they didn’t know this until the email arrived in the early morning of August 11.

Zirtual, meanwhile, is back in business after being acquired by Startups.co, and it is — as promised — hiring back some of its Zeople. As Columbus Business First reports:

So far 10 of the three dozen Zirtual core staff and 50 of some 400 virtual assistants are back, [Startups.co CEO Wil Schroter] told me via email Tuesday, and another 50 virtual assistants have agreed to return and will go live when they are matched with clients.

These virtual assistants are being hired back as independent contractors, not as employees. As Columbus Business First notes, some Zeople don’t want to return.

“It was never really a question of going back,” said Becky Johnson, of Atlanta, who had started full-time with the company in January and risen to an assistant manager over a “pod” of assistants. Over the past week she’s negotiated direct contracts with three of her former clients.

Even under new Zirtual ownership, Johnson said, “it’s the safe choice, but I couldn’t (return) after that breach of trust.”

It’s good to see that former Zeople are negotiating their own direct contracts with Zirtual clients. They already have the client relationships, so why not become their own independent contractors instead of contracting through Zirtual and (I’m assuming) giving Zirtual a cut of their wages? That feels like just as safe a choice as going back to Zirtual.

And it’ll be interesting to see what happens with that class-action lawsuit. I’ll let you know if I see any more zupdates.

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