A class action has been filed against the board of directors and certain top executives of now-bankrupt telecommunications provider Touch America, Inc., as well as former consultant Nightingale, LLC, of Stamford, Connecticut, on behalf of former Touch America employees who allege that they were not given sufficient notice before their layoffs, in violation of the federal Worker Adjustment and Retraining Notification (WARN) Act. The action seeks 60 days of back pay for each employee, as allowed by the WARN Act, and compensatory and punitive damages under Montana law.

The action alleges that Touch America laid off as many as 216 employees on June 18, 2003, with little or no prior warning. The WARN Act requires employers with 100 or more full-time employees to give at least 60 days' advance notice of a business closing or mass layoff to affected employees. Instead of the required notice, the action alleges that "in a brutal period of about three minutes of "conference call" and "simultaneous e-mail," this class of Montanans were stripped of their employment, their benefits earned."

Due to its bankruptcy, Touch America is not named as a defendant in the class action. Instead, the action names Nightingale and Touch America's directors and top executives in the hope that these defendants will still have the money that was allegedly drained from Touch America's coffers.

Touch America's Delaware bankruptcy proceeding has been an epicenter of controversy as well. Objections have been filed by a group of unhappy investors, alleging that the company is attempting to divest itself of its responsibilities to its creditors and investors by completing all proceedings in a very short time period. The objections also request that the court appoint a trustee to oversee the company's bankruptcy, rather than allowing company executives to oversee the process.