Essendant closing Lincolnshire headquarters ending 510 on-site and remote jobs

Wholesale distributor Essendant plans to terminate 510 employees, cease operations at its Lincolnshire headquarters and close the facility.

Local, county and state officials were notified last month of the pending action as required by the Illinois Worker Adjustment and Retraining Notification Act.

Under the WARN Act, businesses with 75 or more full-time employees must provide the state and employees 60-days advance written notice when they plan to layoff workers. A WARN layoff is a plant closure or mass layoff.

Essendant’s Aug. 3 WARN notice also announced laying off 134 employees at its Carol Stream distribution center.

The Illinois Department of Labor received a complaint and an investigation is ongoing, according to public information officer Paul Cicchini. The source or nature of the complaint was not disclosed and further detail was not provided.

In the notification to the Illinois Department of Commerce and Economic Opportunity, Marcela Sztainberg, Essendant’s senior vice president of human resources, said the company had been exploring alternatives including potential sale of some company assets and operations and securing capital to avoid liquidation.

At the time, the company didn’t know if that would be successful, she wrote, and expected to cease operations and close its business and permanently close the Lincolnshire facility.

The company is laying off nearly 1,300 employees in six states and preparing to close, according to a Chicago Tribune report.

Sztainberg said Essendant expected to terminate 200 on-site employees and 310 remote workers reporting to Lincolnshire. All were notified of the planned termination to happen on Oct. 3 or within 14 days after, according to Sztainberg.

She did not respond for comment.

The termination was expected to be permanent without “bumping rights” for other positions. None of the employees are represented by a labor union or any other collective bargaining representative, Sztainberg said.

However, the Tribune report citing sources familiar with the situation said hundreds of employees were dismissed in late August.

According to the Illinois Department of Labor, a violation of the WARN Act occurs when an employer fails to provide proper notice. The employer can be liable for back pay and benefits up to a maximum of 60 days and may be subject to a civil penalty of up to $500 per day.

The company was incorporated in 1922 as Utility Supply Company and opened its first retail store and published its first office products catalog in 1937, according to the company website.

It began operating exclusively as an office products wholesaler in 1978 and began making a series of acquisitions beginning in the 1990s through 2014. The company became Essendant in 2015, according to the website.