Leaders with Cloudswell, one of seven affiliated companies whose leaders announced layoffs Friday, submitted documents to the state's Department of Labor and Workforce Development about the dislocated workers.
Jeff Hentschel said that Cloudswell didn't technically meet the requirements of the WARN Act, which mandates that companies with more than 100 employees must give 60 days' notice when laying off more than 30 percent of its workforce.
But state leaders often get notifications from businesses anyway, he said.
He also said that each of those seven companies is counted separately for purposes of the WARN Act.
Hentschel didn't receive notice from AREA203 or SupportSeven; and Monday afternoon, he was checking to see if the state received notice from the other affected companies, which are Credit Payment Services Inc., Credit Protection Depot and Eclipse in Action.
The Cloudswell documents provide a little more insight into the situation.
"This is to advise you that on Aug. 16, 2013, Cloudswell Inc. ... will permanently reduce a number of employees at the facility due to catastrophic unforeseen business circumstances," Brian Hinton, senior vice president of administration and human resources, wrote in the letter. "Within the past week, we have experienced regulatory pressure that has rendered the payment services of the financial services industry unable to support the ongoing operation of our customers."
In 2011, the Chattanooga Times Free Press ran an article that said companies such as AREA203 were a front for illegal payday lending services.
Brown is reportedly behind payday lending sites PayDayMax.com, DiscountAdvances.com and MyCashNow.com, which have been charging fees beyond the legal state limit and operating without a license, which is against the law, according to the Times Free Press.
Brown's defense is that his payday websites are operated from servers that are not in the country and thus not subject to state law.
The seven companies impacted by Friday's layoffs provided an array of services for the payday lending sites.
The document also said that 52 people from Cloudswell were impacted.
Between the seven companies, leaders laid off about 300 people. The document also includes a list of positions that were impacted.
"Affected employees do not have any bumping rights and are not represented by any union," according to the document submitted to the state.
The company's leaders plan to work closely with the Tennessee Department of Labor and Workforce Development's dislocated worker unit to help employees in the transition, also according to the document.
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