Labor & Employment

Failed firm's leaders violated law by not giving proper notice before layoffs, federal judge says

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Executives from a failed Florida-based law firm violated federal law when they failed to inform their employees that the firm was about to go under, a federal judge ruled.

On Friday, the Orlando Sentinel reported that U.S. District Judge Beth Bloom of the Southern District of Florida ruled that the executives with the firm Butler & Hosch had violated the federal WARN Act by not giving their approximately 700 employees the requisite 60-day notice that the firm was about to fail. Instead, the Sentinel reported, executives simply told their employees that the firm was closing on the day it went out of business and, later on, informed them they would not be paid for their last three weeks of work. The firm, which had offices in Orlando, Miami, Tampa, Dallas and other cities closed suddenly in May 2015.

According to the Sentinel, on Sept. 19, Bloom granted a motion for summary judgment filed by two former employees Gianna Hills and Stephen Regal. Bloom had previously thrown out the suit against the defunct firm after it also named firm leader Robert Hosch, personally. The suit was then re-filed against the firm, only. In February, Hosch agreed to give up his law license in Florida after he failed to file timely withdraw motions in 60,000 cases after the firm abruptly went out of business.

“Employees were provided with no notice, severance, and barely an opportunity to gather their personal items before security badges and telephone extensions were deactivated,” the lawsuit alleged. According to the Sentinel, Hosch claimed the firm ran out of money and turned the firm over to a fiduciary tasked with resolving the firm’s debts. The firm’s bankruptcy proceeding is still pending, and lawyers representing the firm did not oppose the motion for summary judgment. In her order, Bloom told the plaintiffs that they should file for class certification after the bankruptcy claim is resolved.

According to the Sentinel, the firm could be on the hook for $21 million, assuming a figure of $500 per employee for 60 days.

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