Hundreds of Universal employees abruptly terminated March 28th may have significant WARN and related employee claims in the Universal bankruptcy, but the payouts may be hard to reach, according to René S. Roupinian, partner at the national employee rights law firm of Outten & Golden LLP.
Outten & Golden LLP brought separate suits last Thursday against parent Universal Health Care Group, Inc. (De La Concha et al. v. Universal Health Care Group, Inc., in the U.S. Bankruptcy Court for the Middle District of Florida, Adv. No. 13-00273-KRM) and subsidiary American Managed Care (Toups et al. v. American Managed Care, LLC, in the U.S. District Court for the Middle District of Florida, 13-cv-00807-JSM-AEP), seeking to recover 60 days of WARN pay and benefits for the terminated employees. Although the Universal parent is in bankruptcy, Roupinian explained that “the employees’ wage claims, including WARN damages, are uniquely situated near the top rung of the creditor ladder.”
Outten & Golden LLP has a national WARN practice with an emphasis on litigating WARN claims in bankruptcy, including the Middle District of Florida where Universal Health Care is headquartered. In 2011, Outten & Golden obtained a $15 million WARN settlement on behalf of the employees of Ocala based Taylor, Bean & Whitaker (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), following the shutdown of what was then the nation’s largest non-depository mortgage lender – which according to Roupinian – imploded under circumstances resembling those of Universal.
More recently, Outten & Golden was appointed lead class counsel on behalf of the Port Saint Lucie-based employees of Digital Domain Media (Frye v. Digital Domain Media Group, Inc., et al., in the U.S. Bankruptcy Court for the District of Delaware, Adv. No. 12-50843-BLS) who were laid off without 60 days WARN notice. Outten & Golden also represents the former Tampa-based employees of both PEMCO World Air Services, Inc., an aviation company, and CPG, a consumer rebate services company, both of which are in bankruptcy. Willock v. Pemco World Air Services, Inc., et. al, in the U.S. Bankruptcy Court for the District of Delaware, Adv. Pro. No. 12-50799-MFW; Clayton et al. v. Continental Promotion Group, Inc. in the U.S. Bankruptcy Court for the Middle District of Florida Case No. 8:08-ap-00600-CPM.
Under the WARN (Worker Adjustment and Retraining Notification) Act, when large companies close 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. Both Taylor Bean and Universal lost their ability to transact business amid allegations of misconduct.
Attorney Jack Raisner, who co-chairs Outten & Golden’s WARN Act Practice Group, points out that Universal appears to be following the roadmap used in the Taylor Bean bankruptcy case, where Outten & Golden also filed WARN claims. Raisner says the claims may be stronger in Universal, although impediments to collecting undoubtedly exist. Meanwhile, Roupinian observes that “Universal’s employees will also have to deal with medical insurance issues such as finding replacement coverage – and figuring out how to 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 represented almost 3,000 former employees of Taylor, Bean & Whitaker. Following two years of litigation, the court granted final approval to the $15 million settlement in December 2011.
Outten & Golden LLP is also currently litigating WARN lawsuits in Delaware, Illinois, New York, Ohio, Texas, and several other states, all on a contingency basis. Under the WARN Act, employees terminated without written notice may receive up to 60 days of wages and benefits.