Failed Howrey Law Firm Faces WARN Suit Over Terminated Employees

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A federal lawsuit filed on Monday by the WARN group of Outten & Golden LLP seeks backpay and benefits on behalf of several hundred employees who were terminated on March 31, 2011 in connection with the abrupt shutdown of Howrey LLP, a once-thriving national law firm.

No one enjoys planning a company's death. Often, when employers say they didn't foresee a bad ending, they mean they didn't want to foresee it. So they hold off giving WARN notice until it's too late. But under the WARN Act - there are very few excuses.

An ex-employee at Howrey LLP's Falls Church offices has launched a proposed nationwide class action alleging the law firm failed to provide hundreds of employees advance written notice, as required by the federal Worker Adjustment Retraining and Notification or WARN Act.

The complaint filed in federal court in New York alleges Howrey LLP improperly closed without providing 60 days notice to employees. (Langley v. Howrey LLP, No. 11 cv 2317, U.S. District Court for the Southern District of New York). The WARN Act requires that when large companies fold or order deep layoffs, employees must receive advance written notice. Without proper notice, employees may not have time to plan ahead and seek new jobs and health insurance before the pink slips go out. During the recent recession, millions of employees have confronted sudden jobless, including many who worked at law firms. See, http://money.cnn.com/2010/07/02/news/economy/jobs_gone_forever/index.htm

Howrey, which began as a Washington, D.C. law firm specializing in antitrust and intellectual property law, grew rapidly over the last 20 years, opening offices across the U.S. and overseas. Facing financial difficulties, Howrey notified employees on March 9, 2011 that it had "experienced an economic decline in its business." It stated that as a "result of increasing financial liabilities and other recent events," it was ceasing its business operations and closing all of its offices in Falls Church on May 9, 2011 and worldwide. See, http://dealbook.nytimes.com/2011/03/10/howrey-law-firm-dissolves-after-slow-bleed-of-partners/

Employees at work on Thursday morning, March 31, 2011, were therefore surprised by a memo issued by Howrey that they were being terminated at once. Employees were told to collect their personal belongings and leave. They were informed they would receive no further pay or benefits as of that day, and their health insurance would cease immediately, or at the end of April if they paid their own premium. In the memo, Howrey stated that it "did not foresee this outcome" and that its inability to continue operations was on account of its lender, Citibank which, the memo continued, "will not allow us to pay employees or partners for work performed" after March 31. See, http://www.washingtonpost.com/business/capitalbusiness/end-comes-abruptly-for-remaining-howrey-employees/2011/04/01/AF211vWC_story.html

According to Jack A. Raisner, a partner at the national employee rights law firm of Outten & Golden LLP, Howrey's claim that it could not foresee its demise will surely be tested in the WARN suit. "No one enjoys planning a company's death." says Raisner. "Often, when employers say they didn't foresee a bad ending, they mean they didn't want to. So they hold off giving WARN notice until it's too late. But under the WARN Act - there are very few excuses. Employees deserve notice."

Attorney René S. Roupinian, who co-chairs Outten & Golden WARN Act group, points out Howrey employees are left wondering how they will support themselves and pay for their ongoing medical treatment and drugs - much less emergency care - on their own. Roupinian observes that "Howrey employees have virtually no COBRA to buy-into, no readily available medical insurance plan exists for them, and even if they find it - how will they pay for it? One of the reasons why advance notice of termination is so important is it permits employees to arrange for health insurance, prescription purchases and ongoing medical treatment." Under the WARN Act, Roupinian adds, employees may recoup those costs.

Outten & Golden LLP represents almost 2,000 former employees of what was the nation's largest non-depository mortgage lender, Taylor, Bean & Whitaker. They were terminated while at work in August 2009. (Callahan v. Taylor, Bean & Whitaker Mortgage Corp., in the U.S. Bankruptcy Court for the Middle District of Florida, 5:09-cv-00346-HLA-GRJ). Outten & Golden LLP also represents almost 2,000 employees in the WARN lawsuit brought against Jevic Transportation employees (Czyzewski vs. Jevic Transportation, Inc., et al., No. 08-50662, U.S. Bankruptcy Court for the District of Delaware). Jevic truck drivers were out on the road when they were told they had been terminated. See, http://articles.philly.com/2008-05-23/news/25261958_1_jevic-transportation-bladder-cancer-list-of-former-employees The firm also is currently litigating WARN lawsuits in Ohio, Connecticut, California, Texas, New Mexico, Pennsylvania, and several other states.    

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