Series of class action lawsuits filed against Vatterott College owner after shutdowns across the country

The sudden closings of Vatterott College campuses across the country, including the ones in Joplin and Springfield, came as a shock to employees and students, but it is just following a pattern established in recent weeks by the company that owns Vatterott.

Education Corporation of America, which bought Vatterott in January has been closing its for-profit vocational schools across the country, including Vatterott, for the past couple of months, following the same pattern of giving no notice to employees and students.

Those closings have already resulted in a series of class action lawsuits filed in federal court.

Included in those is one filed December 7 in U. S. District Court for the District of Delaware alleging a violation of the Worker Adjustment and Retraining Notification Act.


Five former Education Corporation of America employees claim they were "terminated without proper legal notice" or "adequate notification."

Defendants failed to pay the Plaintiffs and each of the Class Members their respective wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation for 60 days following their respective terminations, and upon information and belief, failed to make the pension and 401(k) contributions from and after the dates of their respective terminations.

Another action was filed in Delaware a day earlier, making the same allegations.

A class action suit demanding a jury trial was filed December 11 in U. S. District Court for the Northern District of Alabama.

The petition in that case details how Education Corporation of America shut down its campuses and let its employees go providing them only with the following e-mail:

Dear colleagues, 

 In early fall, we undertook a path to dramatically restructure ECA to best position ourselves for the future. This plan entailed the teach out of 26 of our campuses and then the commitment of additional funds from investors. 

 However, recently, the Department of Education added requirements that made operating our schools more challenging. 




In addition, last night ACICS suspended our schools’ accreditation with intent to withdraw. The uncertainty of these requirements resulted in an inability to acquire additional capital to operate our schools. 

 It is with extreme regret that this series of recent circumstances has forced us to discontinue the operations of our schools effective with the completion of the current module or term for most students. There will also be a small group of employees to provide an orderly closure process for a short period thereafter. Please check with your functional leader or campus president for your last day of employment. Attached are answers to common questions including benefits and related items. 

All employees will receive wages for time worked along with accrued but unused vacation. I recognize this will have a dramatic effect on all of you, our students, and our many other partners and regret having to share this news. 

 Stu Reed 

The company's dire financial problems were explored in an October 19 article in Inside Higher Education:

The problems at for-profit college operator Education Corporation of America have piled up in recent years. 

Its enrollment has plummeted. It has stopped making on-time payments on its debt. And it’s fighting eviction from multiple locations as creditors pursue judgments against the company.