NEW YORK (CNN/Money) - A laid-off Arthur Andersen LLP employee has filed a class action lawsuit against the accounting firm, which is also struggling to settle a criminal indictment against it for shredding Enron Corp. documents.

The complaint, filed earlier this week in U.S. District Court for Northern Illinois, claims that Andersen violated the Worker Adjustment and Retraining Notification Act. Under WARN, an employer must provide written notice of a mass layoff 60 days prior to the time the employees were laid off or pay them for the 60 days.

Nancy Roquet, the lead and so far only plaintiff in the suit, claims that Andersen management knew or should have known that a mass layoff was likely more than 60 days before it announced the reduction of 7,000 workers earlier this month

Chicago-based Andersen began the year with 28,000 employees in the U.S. and admitted in January that some of its employees destroyed Enron documents. In late January Andersen acknowledged that it was losing business as a result of the document destruction, the lawsuit said.

On March 14, the Justice Department indicted Andersen for allegedly obstructing justice when it shredded "tons" of Enron document. Immediately thereafter Andersen began a media campaign complaining that the charge had created 28,000 victims, referring to the many employees who would lose their jobs, the complaint said.

On April 8, Andersen laid-off 7,000 employees, including Roquet, who was employed by the firm as a secretary for three months, the complaint said.

According to Roquet's termination notice, which was attached to the complaint, Andersen gave laid-off employees at least one week for each year of service but no less than two weeks for staff, three weeks for senior employees and four weeks for managers and principals.

"Andersen acted in violation of WARN Act by failing to provide plaintiff and the class members with 60 days notice of the mass layoff at Andersen or 60 days pay," the complaint said.

The lawsuit covers all persons who were employed by Andersen after March 1, who were employed at a site where the layoffs resulted in 33 percent cuts or the reduction of 500 workers, and who were fired without 60 days notice.

Damages could number in the millions as the class action seeks compensation of two months salary for the laid-off workers minus whatever severance they received.

Dan Edelman, Roquet's attorney, said the class could include as many as 2,000 ex-Andersen employees at the Chicago and St. Charles, Ill. sites.

Separately, Andersen continued settlement negotiations with the Justice Department Wednesday but a resolution is not near, an Andersen attorney told CNNfn.

"We are still in negotiations and not close to agreement yet," said Rusty Hardin, Andersen's lead attorney in Houston. "Reports of an agreement being announced today are premature."

Hardin also added that an agreement will likely not come this week.

A Justice Department spokesman also indicated that a settlement is not imminent.

"News of a settlement is speculation," the spokesman said and declined further comment.

Press reports this week had said that Andersen and the Justice Department were set to announce a settlement Wednesday of the one-count charge against Andersen. The criminal indictment alleges that Andersen employees shredded Enron documents after they were aware of a federal investigation.

Last week, David Duncan, Andersen's lead partner on the Enron account, pled guilty to a single felony charge in federal court in Houston as part of a deal with prosecutors. Duncan also admitted to overseeing the shredding of Enron documents to thwart an investigation by the Securities and Exchange Commission.

Negotiations between Andersen and the DOJ to settle the indictment picked up speed after Duncan's admission.

In another development, Connecticut Attorney General Richard Blumenthal filed a lawsuit against Arthur Andersen LLP due to a failed deal with Enron Corp. in which a state agency reportedly lost $220 million.

The lawsuit, filed Tuesday in Hartford Superior Court, alleges that Andersen, as Enron's auditor, helped the energy trader to conceal its liabilities and inflate its assets. The Chicago-based accounting firm chose to falsely and fraudulently misrepresent the true facts of Enron's financial condition, the complaint says.

The Connecticut Resources Recovery Authority (CRRA), a quasi-public state agency, paid Enron $220 million so the energy trader would buy power from it above market rates during the following 12 years. Enron was to make monthly payments of about $2.4 million to the CRRA during that time. Enron began making the payments in April 2001 but stopped when it filed for bankruptcy on Dec. 2.

The CRRA has lost much of the $220 million it paid to Enron, according to the complaint.

"Andersen was an active participant in, and aided and abetted Enron in a scheme to disguise Enron's true financial condition from the public, Enron investors, and all parties doing business or considering doing business with Enron, including all parties making loans or considering making loans to Enron," the lawsuit said.

Houston-based Enron, once one of the nation's largest companies, filed the largest bankruptcy in U.S. history. The once mighty energy trader allegedly used thousands of special purpose partnerships to hide nearly $1 billion in debt and to inflate profit. Andersen, as Enron's auditor for 16 years, signed off on Enron's financial statements before the firm was fired in January.

The Blumenthal lawsuit seeks both punitive and actual damages, costs and other legal relief.

Blumenthal also sent a letter to the Justice Department urging the agency to investigate Andersen's role in the collapse of two Connecticut companies, First Connecticut Life Insurance Co. and Capital Benefit Plans Inc.

The attorney general has issued subpoenas to Andersen seeking documents related to the failure of the two companies. Andersen did auditing work for both companies.

Andersen was not immediately available to comment on the lawsuit and Blumenthal's letter to the DOJ.

Separately, Andersen's member firm in the United Kingdom said Wednesday it plans to cut 1,500 jobs in that country due to dropping business. The cuts will affect all areas, Andersen said.

Last week, the U.K. member firm inked a deal to join Deloitte Touche Tohmatsu. The Andersen U.K. affiliate had planned to merge with KPMG, but KPMG called off the U.K. talks with Andersen over fear of Enron Corp.-related lawsuits.