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A class-action lawsuit filed last week alleges SureID never warned employees of coming mass layoffs

HILLSBORO TRIBUNE PHOTO: JOHN WILLIAM HOWARD - Located near where Northwest Brookwood Parkway crosses U.S. Highway 26, SureID has cut half its workforce in the last several months.A former employee at SureID is suing the Hillsboro company, in the wake of several mass layoffs at the company.

SureID, which specializes in security technology, has made a series of layoffs this year, including removing its founder and hundreds of others.

Last week, former employee Marie Flaig filed a class-action lawsuit against the company, alleging it failed to give notice of the mass layoffs, as required by federal law.

According to the lawsuit, filed in U.S. District Court on June 9, Flaig is seeking 60 days unpaid wages and benefits for herself and other members of the suit.

Flaig was laid off on May 8, along with about 250 other SureID employees.

Under the WARN Act, Oregon companies with 100 or more employees must give 60 days notice for mass layoffs.

The lawsuit alleges the terminated employees, including Flaig, never received a notice prior to their dismissal. The lawsuit also alleges the company failed to provide employees with health insurance.

The plaintiffs can't demand more than 60 days of pay and benefits under state law, according to attorney Stuart Miller, one of the attorneys listed on the suit.

Miller said SureID failed to comply with federal regulations, but such lawsuits aren't always cut-and-dry.

"I'll not say where on the scale I believe it falls, but on the face of what I know right now it's not one of the more complex cases," Miller said. "It seems relatively straightforward with WARN violations."

Miller said WARN Act lawsuits typically follow one of two defenses: either the company can point to unforeseeable business circumstances — like the loss of a major client — or can cite itself as a 'faltering company' actively seeking financing. Some companies have argued layoff notices would jeopardize the chance of getting financing, but in both cases companies are still required to give notice as soon as practical along with a written explanation as to why full notice wasn't given.

Layoffs at the company continued this month. At least 60 employees were let got last week, including many top executives and its CEO and founder Steve Larson, according to The Oregonian.

One high-level SureID employee declined to comment on the lawsuit, and the company did not return multiple requests for comment to SureID's media relations arm.

As of June 13, there was no WARN notice on file with the state of Oregon.

Shakeup at SureID

The moves follow a major blow to SureID in April: The U.S. Navy announced it would no longer use the Hillsboro company's technology on its bases, undercutting a large portion of SureID's foundation. According to a SureID press release on April 19, the company managed credentials at 66 Navy bases in the U.S. and Guam, overseeing some 170,000 credential holders.

The Navy's decision earlier this year came after federal inspectors found that SureID technology had inadvertently allowed people without cleranance onto Navy bases, including dozens of convicted felons were were allowed access to Navy installations for months before their criminal records were discovered.

The company filed a challenge of the government's decision on April 18 with the U.S. Government Accountability Office, but the challenge was withdrawn a week later. The challenged alleged the government violated regulations that "require the Government to promote competition."

The challenge included comment from the Government stating the move to in-source credentials were "in no way a reflection on SureID," but a 2013 report by the Department of Defense Inspector General recommended the Navy move away from SureID after criminals bypassed SureID's Rapidgate system and gained access to Navy bases.

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