Essendant, a long-established wholesale office supply company, is laying off nearly 1,300 employees across six states and shutting down operations. The company may be in violation of Illinois employment law by allegedly terminating hundreds of workers without the required 60-day notice under the state’s Worker Adjustment and Retraining Notification (WARN) Act. The Illinois Department of Labor has launched an investigation into Essendant’s unexpected layoffs, which occurred five weeks earlier than planned.

Paul Cicchini, spokesperson for the agency, stated, “The Illinois Department of Labor received a complaint and the department is investigating.” The business, originally known as United Stationers, transitioned from a family-owned Chicago store into the nation’s leading independent wholesaler of office products. The company, rebranded as Essendant in 2015, has faced difficulties under private equity ownership during a post-pandemic shift to remote and hybrid working models.

Last year, Essendant attempted to change its business focus from office products to cleaning supplies but was unsuccessful. On August 3, Essendant issued a WARN notice indicating the closure of its Lincolnshire headquarters and Carol Stream distribution center, affecting 510 and 134 employees, respectively. The planned termination date was set on or after October 3. However, on August 27, the company abruptly laid off hundreds of employees via a mass video call, predominantly from the Lincolnshire headquarters.

An August 28 follow-up letter obtained by the Tribune confirmed the last employment day for those terminated early as August 31, with no severance pay or additional benefits. The letter was signed by Marcela Sztainberg, senior vice president of human resources at Essendant, who along with the company, did not respond to multiple requests for comment.

The Illinois WARN Act mandates businesses with 75 or more employees to provide a 60-day advance notice of plant closures or mass layoffs to workers and the state. If the investigation determines Essendant violated the WARN Act, the state could pursue back pay and benefits for employees terminated before the full notice period. Additional civil penalties of up to $500 per day for each day of violation could also apply.

Strauss Borrelli, a Chicago-based law firm, is investigating potential violations of state WARN laws across various Essendant locations. The firm is reaching out to ex-employees omitted from the 60-day notice or severance benefits to discuss legal options. While contacted for comment, a partner from Strauss Borrelli declined to elaborate on the inquiry.

Essendant also issued WARN notices for facilities in Atlanta, Dallas, Phoenix, Philadelphia, Sacramento, and Los Angeles on August 3, totaling 1,278 layoffs. In these notices, also signed by Sztainberg, Essendant expressed efforts in exploring strategic alternatives, such as asset sales and securing extra capital to prevent liquidation.

Founded in 1906 as Utility Supply Co., Essendant grew from selling office supplies in downtown Chicago to evolving into United Stationers in 1960. The company went public in 1981 and was later acquired in 1995 by Wingate Partners. Rebranded as Essendant in 2015, it eventually joined Sycamore Partners in 2019 through a transaction involving Staples.

Essendant experienced a stark decline in business with the rise of remote working post-pandemic, dismantling its core operations. The company announced plans to exit the office supplies sector to concentrate on janitorial and foodservice supplies. It marked the transition as a strategy for long-term growth.

While relocating its headquarters from Deerfield to Lincolnshire earlier this year, Essendant is now set to close both the new office and its distribution hubs. Despite over a century of operation, the company’s future seems uncertain.

Requests for comments from Sycamore Partners, the private equity firm that owns Essendant, went unanswered. As the company grapples with its shifting business model, Sycamore Partners has pursued other ventures, including acquiring Walgreens. Essendant’s enduring legacy faces an abrupt end, affecting employees who were informed abruptly and early of their job terminations.