NATIONWIDE — Today, on the eve of the anniversary of the death of America’s favorite toy company, a judge approved a $2 million severance settlement for 33,000 Toys ‘R’ Us employees laid off in the company’s bankruptcy last year.


“I come from the generation where you got rewarded for hard work. I devoted 30 years — my entire adult life — to Toys ‘R’ Us, as have many of my former colleagues,” said Ann Marie Reinhart Smith, plaintiff in the case and leader with United for Respect, who asserted the class claim on behalf of all Toys ‘R’ Us employees who were fired without severance. “After being so loyal to the company, to be let go without our promised severance is disrespectful. We’re grateful we achieved this class-action settlement. It’s an important milestone for working families like mine who are so vulnerable to Wall Street’s greed. But it is bittersweet. While it recognizes the importance of honoring severance — it points to holes in the laws and bankruptcy process that prevent us from getting paid in full. The system is rigged against us. That has to change.”


Toys ‘R’ Us shut its doors on June 30, 2018 and laid off 33,000 employees in retail’s third-largest bankruptcy. With the support of United for Respect, formerly Rise Up Retail, Ann Marie and thousands of Toys ‘R’ Us workers have petitioned Congress, held protests in stores, spoken out in the press and on social media, pushed for responsible investment by pension funds that invest in private equity, and organized thousands of families hurt by the loss of their Toys ‘R’ Us jobs. United for Respect helped connect Ms. Reinhart with the lawyers at Outten & Golden LLP who asserted the class-action administrative claims on behalf of all 33,000 Toys ‘R’ Us employees. This settlement comes on the heels of a $56 million payment to Kirkland & Ellis LLP, which represented Toys ‘R’ Us in the bankruptcy.


“After nearly a year, employees laid off by Toys ‘R’ Us are finally getting something to show for their steadfast service,” said Jack Raisner, an attorney with Outten & Golden LLP representing Ms. Reinhart. “It’s a shame they aren’t getting more, but this settlement sends a message that employees deserve a place in the front of the line of creditors when businesses fail, and that is important to people who work in retail and their families.”


Last year, Toys ‘R’ Us employees made history in the creation of a $20 million financial assistance fund by two of the company’s former owners and creditors — KKR and Bain Capital — who established the fund in recognition of the impact Toys ‘R’ Us store closures had on the families of long-time employees.

If you’re covering this story and would like to speak to a former Toys ‘R’ Us employee, please contact Taylor Campbell at (202) 854-9571 or [email protected].