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Texas, N.Y. Law Firms File Class-Action Suit vs. FGMC Over Layoffs

Jun 29, 2022
Court Justice

Both firms represent a former employee suing over lack of 60-day notice before mass layoff on June 24.

A former credit risk analyst who was among those laid off last week by First Guaranty Mortgage Corp. is the plaintiff in a class-action lawsuit filed against the company.

The lawsuit was filed Wednesday in U.S. District Court for the Eastern District of Texas by law firms in Texas and New York on behalf of Lori Buckley, a senior credit risk analyst who was among the 471 people laid off during a 10-minute virtual meeting held via Microsoft Teams on June 24. 

The lawsuit claims the laid-off workers were "not provided 60 days advance written notice of their terminations" by FGMC, as required by the federal Worker Adjustment and Retraining Notification (WARN) Act.

The WARN Act requires businesses that employ at least 50 employees to provide affected employees “60 days’ notice in writing” of a mass layoff or plant closing — if they represent at least 33% of the total workforce —  or to pay the employees if they fail to give notice. The 471 employees laid off represented nearlyi 80% of FGMC's workforce. 

Former FGMC employees have told National Mortgage Professional that terminated employees received an invitation to the virtual meeting only about an hour before it began at 11:30 a.m. EDT on June 24, and that they received a WARN Act notification letter via email after the meeting ended. 

FGMC also notified the Texas Workforce Commission (TWC) about the layoff that same day, according to the agency’s website, but the TWC did not receive a written notice until Monday, June 27.

The lawsuit states, "Plaintiff (Buckley) was terminated along with over 400 other similarly situated employees as part of, or as the foreseeable result of, a mass layoffs or plant closings ordered by Defendant on June 24, 2022."

The suit seeks certification of class-action status for the lawsuit and the designation of Buckley as class representative, as well as unpaid wages, salaries, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other benefits for up to 60 days for each affected employee.

According to a statement from FGMC, the laid-off employees did receive a lump-sum payment of their remaining paid time off, and the company said it had also paid “commissions that had come due.”

The company also paid severance equal to one week's pay for each year of service; if an employee had less than a year of service, they would receive one week's pay.

The lawsuit was filed jointly by the law firms Forshey & Prostok LLP of Fort Worth, Texas, and Raisner Roupinian LLP of New York City. 

A spokesman for FGMC said the company would not comment on the lawsuit.

Attorney Jack Raisner, a partner in the New York law firm, said the lawsuit is the only way former employees can seek to enforce the WARN Act regulations on their former employer.

"It’s a complicated law,” Raisner said. “It’s only enforced by individuals on a class-action basis.”

Enforcement of the law “relies solely on employees,” Raisner said. “They can’t expect any government assistance.”

About the author
David Krechevsky was an editor at NMP.
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