Former employees of Mexican-themed fast food chain Guzman y Gomez have filed a class action lawsuit after the company abruptly closed all eight of its U.S. restaurants in the Chicago area, alleging workers were terminated without the 60 days' notice required under federal and Illinois law.
The lawsuit, filed in Illinois federal court by Chicago-based Haseeb Legal, seeks up to 60 days of pay and benefits for more than 500 affected workers. According to the complaint, employees first learned of the closures through an internal company message posted on May 21 that read: "After careful consideration, we have made the difficult decision to exit the US market. This means we will be closing all our restaurants from today."
"You deserved sixty days. You got zero," Haseeb Legal said in a statement posted online.
Guzman y Gomez, founded in Australia in 2006 by two New Yorkers, expanded into the United States in 2020, opening restaurants across the Chicago metropolitan area as the starting point for broader U.S. growth plans. But the company announced on May 22 that it would permanently shut down all U.S. operations.
"After six years of burritos and big dreams in Chicagoland, we've made the difficult decision to close our US restaurants," the company wrote on its website and social media accounts. The company said it is aware of the lawsuit and "confident we have met all of our legal obligations to our US employees."
The closure comes as Guzman y Gomez retreats from a U.S. market analysts have described as difficult terrain for Australian fast-food chains attempting to compete against established brands such as Chipotle. The Guardian reported earlier this week that other Australian chains, including Crust Pizza and Oporto, also struggled to expand in the U.S.
In comments cited by Business News Australia, co-founder Steven Marks said the company's food and customer experience "was not translating to an improvement in sales momentum." He added that continuing to invest in the U.S. business was unlikely to "justify continued investment of shareholder capital."
The company's withdrawal from the U.S. market was welcomed by some investors in Australia. The Motley Fool, a financial and investing media company known for stock analysis and market commentary, reported earlier this month that Guzman y Gomez shares rebounded after the closures were announced, with analysts viewing the move as an effort to halt losses and refocus expansion on stronger-performing markets such as Australia, Singapore and Japan.
The class action argues that Guzman y Gomez's U.S. and Australian operations functioned as a "single integrated enterprise," potentially broadening liability beyond the American subsidiary.
