SmileDirectClub used to provide mail-order aligners as an accessible and reasonably priced teeth-straightening option. However, the business is currently under increased legal scrutiny and criticism from thousands of impacted consumers and workers following a string of class action Smile Direct Club lawsuit, mass arbitrations, and an unexpected bankruptcy filing.

This article examines the details of the SmileDirectClub lawsuit, including allegations of deceptive advertising, breaches of the Worker Adjustment and Retraining Notification Act (WARN Act), mass arbitration proceedings, and the company’s closure in December 2023. This article will help you understand your rights and potential legal actions if you were a former employee or customer.

What Sparked the Smile Direct Club Lawsuit?

False Advertising and Dental Harm Allegations

Many SmileDirectClub users claim they were misled by marketing promises of “safe, dentist-approved treatment” without ever meeting an actual orthodontist in person. As a result, some suffered worsening dental conditions, jaw pain, or misaligned bites.

Numerous complaints state the company ignored serious issues and refused to offer refunds. Instead, SmileDirectClub allegedly forced customers into binding arbitration, blocking access to a traditional court trial.

The Shift to Mass Arbitration

SmileDirectClub’s terms of service required all disputes to go through arbitration. In response, attorneys organized mass arbitration filings, allowing thousands of individual claims to proceed simultaneously.

What is Mass Arbitration?

Mass arbitration involves bundling thousands of individual cases under a common issue, such as false advertising or defective dental products, without forming a class action.

Key points:

• Each customer files a separate arbitration claim.
• No upfront fees; attorneys are usually paid on a contingency basis.
• Some customers may receive hundreds or thousands in compensation.

Unlike class actions, mass arbitration can overwhelm companies financially due to per-case fees. Some believe that this legal tactic contributed to the downfall of SmileDirectClub.

WARN Act Violation: Bankruptcy Layoffs Without Notice

SmileDirectClub continued to operate while reorganising after declaring Chapter 11 bankruptcy on September 29, 2023. However, the corporation fired almost 1,000 U.S. workers by December 8, 2023, without giving the mandatory 60-day notice required by the federal Worker Adjustment and Retraining Notification (WARN) Act.

Employers employing more than 100 employees are required by the Worker Adjustment and Retraining Notification (WARN) Act to provide 60 days’ written notice before significant layoffs. Employees at SmileDirectClub claim they were only informed of their termination on the day it occurred, which led to legal action.

Key Lawsuit:

• Fatty v. SmileDirectClub
• Claims SmileDirectClub and its partner, Access Dental Lab, failed to comply with WARN regulations.

If successful, former employees may recover 60 days of back pay and benefits.

Employee Allegations Beyond the WARN Act

SmileDirectClub has also faced previous labor-related lawsuits involving:

• Unpaid wages and overtime
• Denied meal and rest breaks
• Improper classification of employees
• Unsolicited telemarketing text messages

In one class action, employees alleged they were pressured to work through lunch and off the clock. In another case, SmileDirectClub was accused of sending automated promotional texts without consent, violating the Telephone Consumer Protection Act (TCPA).

Timeline of Events Leading to Bankruptcy

The rapid fall from unicorn status to liquidation has stunned both investors and consumers, sparking further investigations and lawsuits.

Regulatory Pressure and Professional Backlash

American Association of Orthodontists Complaints

The American Association of Orthodontists (AAO) filed complaints against SmileDirectClub in 36 states, citing patient safety concerns and a lack of proper dental oversight.

Dentists and orthodontists argued that remote aligner therapy lacked in-person diagnostic evaluations, which could lead to dangerous or irreversible outcomes.

Investigative Journalism

Media outlets like CBC, The New York Times, and NBC News highlighted patient horror stories and internal whistleblower accounts. In response, SmileDirectClub filed lawsuits against some of these journalists, alleging defamation.

This attempt to suppress critical reporting further damaged the company’s reputation in the public eye.

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Who Qualifies for Legal Action?

a) Customers

You may qualify if:

• You used SmileDirectClub aligners and experienced dental harm.
• You relied on marketing claims that lacked a proper medical basis.
• You were denied a refund or pushed into arbitration.

b) Employees

You may qualify if:

• You were laid off on or around December 8, 2023.
• You received no 60-day advance written notice.
• You were employed at a U.S. facility with 50+ workers affected.

Many attorneys are accepting clients on a contingency basis, meaning you pay nothing upfront.

Filing a Claim: What You Should Know

For arbitration claims:

• Gather dental records, communications, and photos.
• File an individual arbitration claim through attorneys handling mass filings.

For WARN Act violations:

• Join an existing class action lawsuit (such as Fatty v. SmileDirectClub).
• Provide your employment history and proof of layoff notice (or lack thereof).

Featured snippet-ready Q&A
Q: Can I join both the arbitration and WARN Act lawsuits?
A: Yes, if you are both a former customer and former employee, you may qualify for participation in both actions.

What This Means for Direct-to-Consumer Healthcare Startups

SmileDirectClub’s collapse sends a strong signal to other DTC healthcare platforms. Legal compliance, patient safety, and transparency must remain top priorities. Failure to deliver on these fronts not only invites regulatory scrutiny but can also destroy consumer trust.

The verdict: Legal Choices and Future Actions

The intricate relationship between technology, healthcare, labor law, and consumer protection is highlighted by the Smile Direct Club lawsuit. Understanding the extent of this situation will assist you in taking the appropriate actions towards a resolution, whether you are a former employee, an impacted client, or an investor who is concerned.

Key Actions:

• Review your SmileDirectClub treatment or employment history.
• Connect with a class action attorney.
• Monitor case updates from trusted legal sources.

FAQs

Is SmileDirectClub still in business?

No. As of December 2023, SmileDirectClub ceased all U.S. operations and initiated liquidation proceedings.

How can I join the SmileDirectClub lawsuit?

Visit mass arbitration or class action portals (like ClassAction.org) to submit your claim.

What can former employees recover from the WARN Act lawsuit?

Up to 60 days of back pay, lost benefits, and damages for failure to provide notice.

Was SmileDirectClub’s arbitration clause legal?

Arbitration clauses are enforceable; however, mass arbitration tactics may offer some relief.

Conclusion

Startups that disrupt healthcare without proper protections should take note of the Smile Direct Club lawsuit. Due to the mounting arbitration claims and WARN Act breaches, this case may have a substantial impact on future legal strategies for similar endeavors.

To learn more about your options if you were affected, consider consulting a legal professional. Even if the business is no longer in operation, justice could still be possible.

Disclaimer: This article provides a general overview of the Smile Direct Club Lawsuit, based on publicly available information, and is intended for informational purposes only. It is not legal advice.  It does not constitute legal advice.