Guzman y Gomez Closes All US Restaurants May 25: Labor Lawsuit Filed

Guzman y Gomez Mexican Kitchen, an Australian-born fast-casual chain that competed directly with Chipotle, has permanently closed all nine of its U.S. restaurants effective May 22, 2026. The sudden shutdown left employees scrambling after learning about the closure through leaked corporate emails rather than official company notice. Former workers are now pursuing legal action, alleging the company violated Illinois’ Worker Adjustment and Retraining Notification (WARN) Act by failing to provide adequate advance notice. This collapse marks a dramatic end for a chain that once planned to expand hundreds of locations across America.

Abrupt Closure Shocks Chicago Employees

Guzman y Gomez announced the permanent closure on its U.S. website, stating “All GYG USA restaurants permanently closed” effective May 22. The company operated nine locations across the Chicago area over six years. Employees discovered the news Thursday night through a leaked internal email rather than receiving official notice from management, leaving workers blindsided and without severance information.

Federal Lawsuit Over Labor Law Violations

Former workers filed a class action lawsuit in U.S. District Court Northern District of Illinois, alleging the company violated both state and federal WARN Acts. The lawsuit seeks damages and relief under labor protection laws. The WARN Act requires employers to provide 60 days’ notice before mass layoffs, a requirement Guzman y Gomez allegedly ignored completely.

Worker Protests and Public Backlash

About a dozen former employees gathered outside the shuttered Evanston location on Saturday, holding signs protesting the “no notice” closure. Staff members described learning about the shutdown through leaked corporate communications. Workers expressed frustration over receiving no official company communication, final paychecks, or transition support before the restaurants went dark.

What This Means for the Restaurant Industry

The Guzman y Gomez collapse highlights growing risks in the fast-casual dining sector, where thin margins and competitive pressure from established chains like Chipotle create financial strain. The company’s failure to follow basic labor law procedures raises questions about corporate accountability and worker protections. This case may set precedent for how restaurants handle mass closures and could influence future employment practices across the industry.

Final Thoughts

Guzman y Gomez’s sudden closure and alleged labor law violations represent a cautionary tale for the restaurant industry. The company’s failure to provide required notice or severance has triggered federal litigation that could result in significant damages. This incident underscores the importance of strict compliance with worker protection laws, even during business failures.

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