Guzman y Gomez sued in Illinois after closing Chicago restaurants without warning

Workers at Guzman y Gomez say the chain shut six Chicago-area restaurants, cut them off from work and benefits, and left them to learn about the closures only after the fact, turning the Australian fast-food brand’s U.S. retreat into a labor fight over notice and pay.

A group of U.S. employees has sued the Sydney-listed company in Illinois court, alleging that the Mexican-themed chain violated federal and state notice laws when it permanently closed the locations last Thursday. The complaint says roughly 500 employees could be affected, either by the closures themselves or by the abrupt loss of work and benefits that followed. The plaintiffs are seeking 60 days of unpaid wages and benefits, along with the maximum civil penalty allowed under the law.

The case centers on the Worker Adjustment and Retraining Notification rules, which are meant to give employees time to prepare for a plant closing or mass layoff. Illinois WARN requires employers with 75 or more full-time workers to provide 60 days’ advance notice, while federal WARN generally requires 60 calendar days’ notice before a covered closure or layoff. Under the federal law, a plant closing generally means 50 or more job losses at a single site, and the statute can impose back pay and benefits for up to 60 days if workers prevail.

Guzman y Gomez said through a spokesperson that it was aware of the legal action and believed it had met all of its legal obligations to U.S. employees, while declining further comment. The dispute lands as the company walks away from a market it had once pitched as part of a global growth story.

Guzman y Gomez opened its first U.S. location in Naperville in 2020 and expanded to eight Chicago-area restaurants before the exit: Naperville, Schaumburg, Crystal Lake, Buffalo Grove, Deerfield, Evanston, Des Plaines and Chicago’s Bucktown neighborhood. The company announced on May 22, 2026, that it was leaving the U.S. after poor sales, and founder and co-CEO Steven Marks said the business was unlikely to justify more shareholder capital. Reuters reported that a turnaround would have required substantially more time and capital.

The market reaction was swift. Guzman y Gomez shares rose as much as 20.58% after the exit announcement, a sharp vote of confidence from investors who saw relief in the company’s decision to stop funding a struggling American venture. The lawsuit now tests whether that retreat came at the expense of workers who say they were given no meaningful warning before their paychecks and health coverage disappeared.