Amid ITT Fallout, Employees Sue College for Abrupt Mass Layoff
Former ITT Tech employees are suing the defunct school.
Fifty-six-year-old Carlton Bowen thought he would finish out his career as a counselor at ITT Technical Institute at the Houston West campus and planned to retire in a few years. He has seven kids, two of whom are still in college, three of whom still live at home and one of whom is physically disabled with a condition affecting his joints and muscles. And so Bowen knew he had several more years of work to do.
Then he was laid off, seemingly out of nowhere. "No notice whatsoever," Bowen says.
He woke up to a 6 a.m. email Tuesday from the school's president informing Bowen and dozens of other ITT — Houston West employees that the school was permanently closed — as was every location across the ITT campus — and that all of the employees were laid off, effective immediately. Bowen says there are no severance packages, that he knows educators and employees who worked there for roughly 20 years who lost their pensions. This past Saturday, just before the mass layoffs affecting roughly 8,000 ITT employees across the country, Bowen says, he received his normal paycheck plus pay for all of his remaining vacation time.
To make up for the abrupt financial blow, however, Bowen and the 8,000 others are asking a federal judge to force ITT to pay them, at minimum, 60 days' worth of wages, given the employees say they were never afforded the 60-day notice for layoffs required under federal law. The suit — filed in Delaware because that's where ITT Educational Services, Inc. is based — asks the judge to grant class-action status to all ITT employees in all states, as KHOU first reported.
Calls to ITT Educational Services's registered agent in Delaware requesting comment were not returned; calls to the ITT Houston West campus rang forever with no option to leave a voicemail.
Bowen said that as medical bills keep piling up for two of his children, two months of pay would go a long way, should the former employees win in court.
"It's a shocker to everyone, because nobody expects a company of that magnitude, of that size, to just up and close," Bowen said. "They just messed thousands of people's lives up. Some of us still have children in college. We have bills to pay. Unemployment doesn't pay the bills."
Nationwide, ITT enrolled about 45,000 students, roughly 1,600 of whom attended the three Houston locations. Bowen says he knew weeks earlier that the for-profit college system was having some issues, not because administrators informed him and other employees but because he read about it in the news, he said. He read about how the U.S. Department of Education was cracking down hard on ITT for its failure to meet accreditation standards and adequately serve students. At the end of August, the feds informed ITT that, as punishment, it could no longer enroll any students who rely on federal financial aid — a huge blow to ITT given that roughly 70 percent of its $850 million in revenue came from those student loans.
Bowen says it was shortly after those sanctions when most of the recruiters in charge of giving new students tours of the school were told to stay home. Bowen says the school hired a call center instead to take questions from prospective students, who had no idea that they were wasting their time.
But it's the students who were just about to graduate this month that Bowen feels for most. He said the students he had been helping with career counseling, who were scheduled to graduate on September 30 (ITT had a quarterly system with three graduation dates each year), keep calling him. Beyond directing them to information from the U.S. Department of Education, all he can think to tell them is that he is in the same boat.
The Department of Education has offered students two options: student loan discharges or transferring credits to new colleges. Bowen has sent some to the university where his wife works, Belhaven University, which is accepting ITT credit transfers. But for those who were just weeks away from walking across the stage, Bowen is at a loss for solutions.
"I still have students calling me, asking, 'How are we supposed to graduate?' I don't know what to tell them," he said. "This morning we went down there to clean our offices out, and we saw students crying there. It hurts. It really hurts."