Taylor Bean Faces Employee Lawsuit Over Layoffs

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The shutdown of one of the largest mortgage lenders has left 1000+ employees without jobs and health insurance, despite the company's reassurances that jobs were safe - just hours before employees were terminated.

Many employees do not realize that when an employer goes out of business, health insurance plans are usually terminated along with the employees

The shutdown of Florida based Taylor, Bean & Whitaker Mortgage Corp., the 12th largest home-mortgage lender, focuses attention on the plight of workers who are told their jobs are safe one day, and laid-off the next. The sudden loss of more than 1000 employees' jobs on Wednesday Aug. 5 and their health insurance two days later is causing many employees immense hardship and drawing attention to their legal rights, according to the national employee rights law firm of Outten & Golden LLP.

Outten & Golden LLP filed a class action on behalf of all affected TBW employees nationwide on Monday, August 10, seeking back pay wages and benefits under the WARN Act (Worker Adjustment and Retraining Notification Act). The suit, Callahan v. Taylor, Bean & Whitaker Mortgage Corp., 5:09-cv-00346-HLA-GRJ, is being litigated in U.S. District Court for the Middle District of Florida. By the morning of Wednesday, Aug. 5, Taylor Bean, as reported by the Wall Street Journal, had lost its ability to provide government-insured loans. Employees in at least one office were reassured in a late-morning meeting that their jobs were safe. When they came back from lunch, however, employees were informed that they were terminated.

According to Jack A. Raisner, a partner in the New York office of Outten & Golden LLP, which represents employees throughout the nation in pending layoff-related litigation, "The Taylor Bean flip-flop is a dramatic instance of what we call 'pump-and-dump'. Employers get the hopes and spirits of employees up in bad times by telling them not to worry - they won't be fired. The next thing you know, the employer is sending the employees home, and in this case cutting off their health insurance."

Raisner points out that the pump and dump scenario has been playing out across the nation during this Great Recession, leading to many angry workers and lawsuits. "Employees especially resent the sudden reversal of fortune. They feel deceived. Everyone expects they may lose their jobs. What they don't expect or forgive easily are the lies. That is why plain, honest notice is so important. In fact it's the law under the WARN Act."

The WARN Act requires covered employers to provide employees with 60 days advance written notice that will be losing their jobs in a mass layoff or shutdown. According to Raisner, it does not appear from reports that such notice was given to the employees of Taylor Bean.

René S. Roupinian, who co-chairs Outten & Golden LLP's WARN Act group, urges employees to investigate whether they might be covered by the WARN Act, which provides eligible employees who receive less than 60 days termination notice up to 60 days back pay and benefits which include medical expenses incurred due to lack of health insurance during the notice period.

"Many employees do not realize that when an employer goes out of business, health insurance plans are usually terminated along with the employees," Roupinian says. "Taylor Bean suddenly cut off its employees' health insurance without giving them a means to continue it. Many employees in these circumstances are let go with no insurance to pay for necessary prescriptions and medical procedures for themselves and their families. It's a harsh reality and can often be more devastating than the sudden loss of income."

It remains to be seen how Taylor Bean's shutdown will affect the terminated employees, but they should know that they may have rights that the WARN class action lawsuit is seeking to protect. Those seeking more information about the WARN class action lawsuit should contact the attorneys on their WARN lawyers website.


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Virginia Outten
Outten & Golden LLP
212-245-1000 ext. 9825
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