INDIANAPOLIS (WISH/AP) – Two former employees at ITT Educational Services have filed a lawsuit against the school claiming they did not receive 60 days notice of termination.
According to documents, 8,000 employees were terminated on September 6 as part of the institute closing, giving them less than 60 days of notice.
The lawsuit seeks a class-action status on behalf of the 8,000 employees being terminated as a result of the closure. More than 130 ITT Technical Institute campuses will be closing in 38 states.
The for-profit college chain announced the closure Tuesday, saying it couldn’t survive recent sanctions by the U.S. Department of Education.
In a letter to more than 35,000 students, the Indiana-based parent company ITT Educational Services announced that campuses won’t open for the fall term that was scheduled to begin Sept. 12 — leaving students scrambling for last-minute options since many U.S. colleges already have started fall classes.
The chain was banned Aug. 25 from enrolling new students who used federal financial aid, because, Education Department officials said, the company had become a risk to students and taxpayers. The department also ordered ITT to pay $152 million within 30 days to help cover student refunds and other liabilities if the chain closed.
Department Undersecretary Ted Mitchell said ITT never made a formal proposal, and that the department’s “informal conversations” with potential buyers had failed.
“We just didn’t see that there was a path forward providing a quality education to the students of ITT Tech,” Mitchell said.
“Ultimately our responsibility is not to any individual institution — it’s to protect all students and all taxpayers,” he said. “I have no doubt that our decision to take action was the right one in service of these goals.”