11/8/2023 0 Comments Freedom mortgage violationsDistrict Court for the Eastern District of New York. The move left at least two employees undergoing cancer treatment without insurance to cover medical procedures between May and July.Įmployees burned by Sprout Mortgage's unexpected closure are mired in their own battle for alleged lost wages in a class action complaint against the lender pending in the U.S. Sprout Mortgage fired 400 employees when it shut down in early July, and also allegedly terminated their health benefits retroactive to May 1, according to a pending lawsuit by former workers. "However, the litigation is at its early stages and no settlement has been reached." "The $2.5 million is a reserve under the Plan of Liquidation in the event there is any WARN Act liability," said a spokesperson for FGMC in a statement Tuesday evening. 2.Ĭounsel for the parties argued in filings in recent months for the appropriate allocation for WARN claims, with plaintiffs requesting up to $6.2 million and FGMC proposing a $700,000 reserve before the judge's confirmation of the bankruptcy plan earlier this month. Impacted workers who sued for WARN violations immediately after the shutdown will be allocated up to $2.5 million, according to its Chapter 11 bankruptcy plan approved by a federal judge Nov. closed its doors in late June, laying off 471 workers without notice. Some former employees have opted to legally challenge their former employers for failing to adhere to WARN guidelines.įirst Guaranty Mortgage Corp. District Courts, where workers and local governments can file class action suits against companies. Companies aren't required to file WARNs for all layoff activity, as the requirements include many exceptions, although mass terminations usually trigger a notice.Įmployers who violate the reporting requirement are liable to each impacted employee for back pay and benefits for the period of the violation up to 60 days, and are subject to a civil penalty not exceeding $500 for each day of the violation. The federal WARN Act requires a business with 100 or more full-time employees laying off at least 50 people to file notice at least 60 calendar days in advance, although the figure doesn't count employees with less than 6 months on the job and those who work fewer than 20 hours per week. The majority of at least 58 companies, which have laid off a combined over 20,000 employees, haven't filed WARN notices, according to a National Mortgage News analysis. However, the lender's policies available online state unused PTO would be forfeited upon an employee's termination or resignation for any reason, unless otherwise required by applicable state law. Several former CrossCountry Mortgage employees claim that they did not receive severance or a payout of their paid time off. "They told me how I was a big part of the family and it was just very disappointing to have that happen…to a family member." "I understand, but I'm really disappointed," they said. One former employee with close to a decade tenure at Freedom Mortgage noted that they felt disposed of by their former employer in a recent layoff round, "a number on a spreadsheet." "They gave severance in the most recent layoff to uphold their image, but to also obligate employees to sign an NDA."Ī representative for Freedom didn't respond to a request for comment Tuesday. "I know for a fact that in April there were employees laid off that did not receive any severance," a Freedom executive who agreed to speak anonymously said. had not responded to a request for comment as of deadline.įormer employees of Freedom Mortgage raised red flags that some employees did not receive severance. They are very expensive without insurance." "This meant that my health insurance expired on the same day and I have four prescriptions I take daily. "I was terminated on the last day of the month, effective immediately," said one loan coordinator who had worked at. Employees that were handed pink slips in recent months say that their employers did not handle layoffs ethically.
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