Terminated employees of Taylor, Bean & Whitaker Mortgage Corp. have filed a class action lawsuit against the lender. If a case against failed Mortgage Lenders Network USA Inc. is any indication, then Taylor Bean could face some payroll liabilities.
The class action was filed on Monday in U.S. District Court for the Middle District of Florida by the New York law firm of Outten & Golden LLP, an announcement today said.
“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,” Outten & Golden said in the news release.
The law firm claims the sudden terminations and subsequent loss of health insurance “is causing many employees immense hardship and drawing attention to their legal rights.”
The lawsuit seeks wages and benefits owed under the Worker Adjustment and Retraining Notification Act, which requires employers to notify the state 60 days in advance when layoffs involving at least 50 employees occur.
Outten & Golden partner Jack A. Raisner noted in the announcement that Taylor Bean’s “pump-and-dump” scheme falsely raised employees hopes then left them unemployed.
On Aug. 5, a bankruptcy court approved a WARN settlement in a case against Mortgage Lenders Network, which stopped originating new business in January 2007 and filed for Chapter 11 Bankruptcy protection on Feb. 5, 2007.
MLN employees filed a class action against the Middletown., Conn.-based firm on June 4, 2007. The employees said they had an administrative claim for 60-day’s pay as required under the WARN act.
The settlement between MLN and the employees was $2.7 million.
Callahan v. Taylor, Bean & Whitaker Mortgage Corp.
Case No. 5:09-cv-00346-HLA-GRJ, Aug. 10, 2009 (U.S. District Court for the Middle District of Florida).
Mortgage Lenders Network USA Inc., Debtor, Guiseppe Caccamo and Robie-Lyn Harnois, Plaintiffs, v. Mortgage Lenders Network USA Inc., Defendant.
Chapter 11 Case No. 07-10146 (PJW), Related Docket Nos. 2724, 2756 & 2884, Adversary Case No. 07-51415 (PJW) Related Docket Nos. 48, 49 & 71 (U.S. Bankruptcy Court for the Districe of Delaware).