The country’s largest drug maker, Sun Pharmaceutical Industries, on Friday said a class action lawsuit has been filed against its US arm by some former employees following the shut down of a manufacturing unit at Detroit in Michigan.”We confirm this is regarding a decision from the 6th US Circuit Court of Appeals in a class action lawsuit by some former employees of our subsidiary company in the US following the shut down of the company’s subsidiary’s Michigan facility,” the company said in a filing to stock exchanges. “There is no material impact of the said judgement on the operations/performance of the company,” the filing added.
Sun Pharmaceutical is under scrutiny for having laid off hundreds of workers at the company’s US-based subsidiary Caraco Pharmaceutical Labs without prior notice. The 6th US Circuit Court of Appeals had ruled on August 27 that a class action suit put forth by the laid off workers is of merit and can proceed. The suit alleges that Caraco did not issue a notice to the workers laid off in 2009 until 11 days after the plants were closed.
The Court’s order observes, “Because it was reasonably foreseeable on April 27, 2009, that an FDA enforcement action was imminent, Caraco was not entitled to the unforeseeable business circumstances exception under the Worker Adjustment and Retraining Notification Act.”
On Friday, shares of Sun Pharma closed down 2%.