Toys R Us workers win $2 million severance settlement

northjersey.com - Melanie Anzidei

One year after Toys R Us shut its doors, a group of workers who lost their jobs are set to receive a $2 million severance settlement.

Judge Keith L. Phillips of the Eastern District of Virginia on Thursday approved the settlement for 33,000 employees who were laid off after the toy company filed for bankruptcy last year, a group representing the workers announced. The settlement was the result of a class action claim filed by the workers last year.

The group was led by Ann Marie Reinhart Smith, a 30-year Toys R Us employee who filed the claim on behalf of all employees laid off without severance.

“After being so loyal to the company, to be let go without our promised severance is disrespectful," Reinhart Smith said in a statement. "We’re grateful we achieved this class-action settlement. It’s an important milestone for working families like mine who are so vulnerable to Wall Street’s greed."

Reinhart Smith, a grandmother from North Carolina, last year became the public face of laid-off Toys R Us employees, appearing in news articles and meeting with independent Vermont Sen. Bernie Sanders, who is seeking the Democratic nomination for president,, on behalf of the laid-off workers. 

On Thursday, Reinhart Smith called the settlement "bittersweet." She said that, despite recognizing the importance of honoring severance, the case highlights what she described as holes in the bankruptcy process that prevents employees from being paid in full.

Jack Raisner, a partner in the law firm Outten & Golden LLP that represented the workers, echoed a similar sentiment.

“After nearly a year, employees laid off by Toys ‘R’ Us are finally getting something to show for their steadfast service,” Raisner said in a statement. “It’s a shame they aren’t getting more, but this settlement sends a message that employees deserve a place in the front of the line of creditors when businesses fail, and that is important to people who work in retail and their families."

About 33,000 workers lost their jobs when Toys R Us folded.

Workers, many of whom stayed at their jobs in the U.S. stores until the end of June 2018 when all stores closed, had said they originally were promised severance when the liquidation was announced, but soon after were told no one would receive the payout.

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