The Firms

April 5, 2011 4:31 PM

Howrey Hit With First Suit Over Employee Wages

Posted by Brian Baxter

Stephanie Langley, a former records specialist at Howrey, has sued the firm for failing to pay WARN Act wages after she was terminated on March 31. The putative class action seeks an undetermined amount in salary and benefits for the plaintiffs, as well as attorneys' fees.

According to the eight-page complaint filed late Monday in U.S. district court in Manhattan, Langley claims that Howrey violated its obligations under the WARN Act by firing her last week without providing 60 days' written notice of termination. The complaint states that the persons in the putative class "are so numerous that joinder of all members is impracticable."

As previously reported by The Am Law Daily, Howrey sent 702 WARN notices to its employees last month before the firm officially dissolved on March 15. Employees were told they would be paid until May 9 if they could not find new jobs before that date.

But last week Citibank, a secured lender owed roughly $75 million by Howrey, informed the firm that it would no longer fund payroll services for employees outside of a select group of individuals assisting Howrey's dissolution committee. That led Howrey to terminate most of its staffers and close all U.S. offices after the close of business on March 31.

Langley's complaint states that she worked as a records specialist in a Howrey facility located in Falls Church, Va. Representing her are partners Jack Raisner and René Roupinian from New York employment firm Outten & Golden.

Outten won a landmark discrimination case against Morgan Stanley in 2004 and was hired by former Lehman employees in November 2008 for a class action against the bankrupt investment bank over a failure to pay WARN wages. (The Lehman case later settled.)

Raisner tells The Am Law Daily that Langley contacted him after receiving her WARN letter from Howrey on March 9. He says that other former Howrey employees have contacted Outten & Golden about pursuing their own claims against their former employer. Raisner declined to give an exact number on how many Howrey employees contacted him.

Latham & Watkins restructuring partner Peter Gilhuly in Los Angeles is representing Howrey in its wind-down efforts. Gilhuly declined to comment on Langley's suit. Howrey dissolution committee members Martin Cunniff, who joined Arent Fox last month, and Gregory Commins, Jr., now at Baker & Hostetler, did not immediately respond to requests for comment on the filing by Langley.

Howrey said in a memo sent to employees last week that Citi's decision to slash funding for payroll was unexpected and left the firm no choice but to terminate employees ahead of the May 9 schedule put forth in March. It said the firm's ability to continue to pay salary and benefits pursuant to its WARN obligations "was contingent upon the approval of Citibank."

Raisner, who cochairs Outten & Golden's WARN practice, says that in cases like Langley's, "the lender is not the employer and the lender is not responsible" for employment decisions. Raisner says that when a lender pulls the plug, it's a nonevent under the WARN.

Raisner describes Howrey's decision to stop making payroll payments as a "funding" and "business decision" by management on how to allocate its resources as the firm winds down its operations.

Other lawyers representing former Howrey employees, such as Los Angeles firm Blum Collins, have stated that they expect to file suits against Howrey over WARN wage claims.

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