Health IQ Slammed with Proposed California Labor Law Class Actions

Santa Clara, CAHealth IQ has been slammed with two (so far) proposed California labor class actions alleging the Medicare broker insurance company terminated between 700 to 1,000 employees in December without a heads-up. By not giving workers notice, Health IQ violated the California's Worker Adjustment and Retraining Notification Act (WARN), according to the plaintiffs.

The two proposed class actions were filed in Florida federal court by former employees Karyssa Quiles and Jessie Lynn Evans. Plaintiffs claim Health IQ terminated them and approximately 700 - 1,000 other similarly situated former employees without cause and therefore violated the WARN Act by failing to provide adequate notice that it planned to cut its workforce and end their benefits.

WARN ACT

Under the WARN Act, companies that staff at least 100 workers must provide 60 days’ advance written notice of any worksite closing that could impact 50 or more employees or mass cuts of at least a third of a company's payroll. Only if such plant or facility closings are demonstrably related to irreparably faltering finances, unforeseeable business circumstances or natural disasters are employers exempt from WARN Act obligations.

The WARN Act provides “workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market.”

Health IQ  California

Plaintiff Quiles worked remotely from her home in Florida for Health IQ, which is an insurance company for seniors. But her work was assigned by, and she reported to, the Defendant’s California headquarters.

According to Karyssa Quiles’ complaint, Health IQ is expected to claim exemption under the “unforeseeable business circumstance” exception of the WARN Act, and will likely cite to inflation, or financial issues. Under that exception, “[a]n employer may order a plant closing or mass layoff before the conclusion of the 60-day period if the closing or mass is caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” But the company was still mandated by the WARN Act to give Plaintiffs “as much notice as is practicable.” Because Health IQ gave zero days advance notice, “Plaintiff seek[s] all remedies available to them under the WARN Act against Defendant”.

Quiles argues that she and hundreds of co-workers found out on December 15, 2022 that they were terminated, effective immediately, by a document they received titled “Notice to Employee as to Change in Relationship," which does not comply with the WARN Act’s written notice stipulations. The Act requires at least the name and address of the site where layoffs will occur, name and phone number of a company official to contact for further information, a statement as to whether the planned action would be either temporary or permanent, and whether the entire plant will be shuttered and a statement to that effect. As well, WARN's written notice requirements must include the anticipated date of first separation and expected schedule for such separations, job titles that will be impacted, and names of the employees currently holding impacted jobs, according to the proposed class action.

Forseen Layoffs

According to one online source (as reported by coverager.com), Munjal Shah, Health IQ’s cofounder and CEO, provided the following response: “Based on information obtained by Coverager, Health IQ has cut a significant portion of its workforce last week. We did conduct a reduction in force on Wed of last week (we are not sharing any details around that). We continue to operate our Medicare business at this time.”

According to the lawsuit, “The official number of impacted employees isn’t clear, and as you can see, leadership hasn’t shared information. Based on our conversations with several former employees, over half of the company was let go – the company had around 2,000 employees, around 1,500 of them held sales or sales supporting roles. According to other Health IQ sources, the company has kept 50 of the 500 staff employees and the plan is to eventually keep just a few agents and retention specialists in place. Our sources tell us that Health IQ wasn’t able to secure needed funding. The company is also facing a class action lawsuit, which alleges that it made telemarketing calls offering health insurance to consumers in violation of the Telephone Consumer Protection Act. One former employee we spoke with shared that this was a surprise since it was communicated that the company was doing well. According to our sources, the company failed to meet its sales goals.”

Quiles argues that, not only were the mass layoffs foreseeable for quite some time, they were foreseen.

Wages and Benefits Compensation

The lawsuits contend that affected individuals are entitled to their respective wages and benefits they would have accrued for 60 days following their terminations that Health IQ has failed to pay. The lawsuits intend to represent all former Health IQ employees, including those who worked remotely, throughout the U.S. who were not given a minimum of 60 days’ written notice of termination. The case is Karyssa Quiles v. HI.Q Inc., 5:22-cv-00669, in the U.S. District Court for the Middle District of Florida.