A lawsuit filed in federal court Wednesday alleges that hundreds of former CEDU Educational Services employees are owed health care and 60 days of wages.
CEDU, which operated schools for children with behavioral problems, announced last month that it was going out of business immediately, causing the closure of its four programs in North Idaho and the loss of 300 Idaho jobs. Nationwide, about 300 CEDU students, including those in Idaho, were sent home.
Brown Schools Inc., CEDU’s parent company, filed Chapter 7 bankruptcy on March 25.
The attorney handling the class-action lawsuit, Robert S. Banks, said his firm met with 110 former CEDU employees this week in Sandpoint and soon will meet with former CEDU workers in California.
The lawsuit targets the California investment company that bought CEDU about eight years ago, McCown, Deleeuw & Co. The firm’s holdings include 24 Hour Fitness Worldwide and Aurora Foods, the makers of Duncan Hines cake mixes, Van de Kamp’s frozen foods and Mrs. Butterworth’s pancake syrup.
Sam Singer, spokesman for McCown, Deleeuw & Co., did not return a call seeking comment Wednesday evening.
The lawsuit claims that under federal law, the 700 former employees of CEDU should have been given 60 days notice before they lost their jobs. It seeks 60 days of pay and benefits, attorney fees and other expenses. The suit does not address the last three weeks of employment before the bankruptcy, for which CEDU workers in North Idaho were not paid.
Banks said the total amount of the lawsuit could reach $4 million.
John Schrom, former clinical director of a CEDU wilderness program for troubled teens, said he hopes the lawsuit provides former employees, students and parents answers about the abrupt financial collapse.
“The administration of the corporation needs to be held accountable for the psychological damage done to the students and families,” he said.
A few CEDU employees remain on the payroll to secure campuses and field phone calls. A bankruptcy trustee is examining purchase offers for the schools. Many employees hope for a quick sale and reopening of CEDU schools, or at least some of them.
Norm Aldridge, former assistant farm manager at CEDU’s Boulder Creek Academy, said the damages detailed in the lawsuit are the least that’s owed to CEDU employees. He and his wife lost full-time jobs.
“We’ve been 30 days right now without our basic income,” Aldridge said. “It’s been devastating to us.”