Solyndra LLC, the bankrupt solar-panel maker that received a $535 million U.S. Energy Department loan guarantee, reached a $3.5 million settlement with former workers who claimed they received inadequate layoff notices.
The settlement will resolve allegations that the company failed to give employees 60 days' notice under the Worker Adjustment and Retraining Notification Act when it fired most of its 1,100 workforce last August, just before seeking bankruptcy court protection.
Solyndra will set up a $3.5 million fund to be distributed to the workers two weeks after the settlement is effective, according to court papers.
The settlement was jointly proposed by Solyndra and the ex-employees.
"In light of the inherent risks and costs associated with litigation of the WARN actions," the company has "determined that the proposed settlement of the WARN claims is fair and well within the range of reasonableness," Solyndra said in settlement papers filed Friday.
Solyndra faced as much as $15 million in damages plus attorneys' fees if the workers succeeded, according to court documents.
The Fremont, Calif.-based company said the agreement is also fair to workers because without it they would have to "wait years for any payment" on their claims.
The settlement is subject to court approval and fired employees can choose to opt out, according to the filing. Both sides asked that the first of two hearings on it be set for Sept. 7.
The workers sued Solyndra Sept. 6, the same day it filed for bankruptcy, seeking two months of wages and benefits after the abrupt firing, according to the lawsuit.
The employees, who will get group status as part of the settlement to represent all those who were fired, were trying to recoup lost salary, bonuses, holiday pay and vacation pay, as well as retirement contributions and health and life insurance.
FBI agents raided Solyndra two days after it sought bankruptcy protection. The company listed about $854.1 million in assets and about $867.1 million in debt in court papers filed Oct. 31.
The company's collapse prompted congressional scrutiny of President Barack Obama, who praised the company during a May 2010 tour of its facilities.
It was the first company to receive a loan guarantee under Obama's economic stimulus program.
Tulsa billionaire George Kaiser, an Obama supporter, invested $400 million in the solar company's parent, 360 Solar Degree Holdings Inc., through an investment vehicle called Argonaut Ventures connected to his charitable organization, the George Kaiser Family Foundation.
Kaiser has said he had no part in helping Solyndra win a government loan.
Original Print Headline: Solyndra agrees to $3.5M settlement
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