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Ex-Lehman Staffers Sue for Back Pay

November 10, 2008
Related Topics: Miscellaneous Legal Issues, Compensation Design and Communication, Policies and Procedures, Latest News

A group of former Lehman Brothers Holdings Inc. employees is suing the company, claiming it violated federal law by stiffing them on their 60 days of severance pay.

The lead plaintiff is an information technology staffer, who filed a complaint this week seeking class-action certification and more than $5 million in back pay in U.S. Bankruptcy Court in Manhattan. The former employees are being represented by class-action powerhouse Outten & Golden.

The ex-Lehman employees claim they were terminated just days before the investment firm filed for bankruptcy on September 15, which was a Monday.

Computer programmer Miron Berenshteyn and dozens of his colleagues were let go on the prior Thursday, according to the filing, making them eligible for 60 days of pay and benefits under the federal Worker Adjustment and Retraining Notification Act. The employees allege the payments abruptly stopped after just three weeks.

“These are unpaid wages we’re talking about here,” said Jack Raisner, partner at Outten & Golden. “When employees lose their jobs as part of a mass layoff, they are due that money. It’s a priority.”

Outten & Golden last hit the headlines in 2004 when it represented an ex-Morgan Stanley employee in a sexual-discrimination suit against the bank. The case was settled for $54 million, one of the highest payments logged in a discrimination case.

According to news reports, nearly 1,000 employees were terminated in the days leading up to the bankruptcy, and Raisner says all could qualify for inclusion in the class.

The group is suing for 60 days of back pay, one week of severance for every year at the company, and health benefits.

Because Lehman is no longer an operating company, the complaint had to be filed in bankruptcy court, where hundreds of other unsecured creditors are hustling for their share of the $613 billion bankruptcy.

If the judge finds that Lehman did violate the Worker Adjustment and Retraining Notification Act, then the unpaid wage claims would get priority status in the line of creditors.

Lawyers at Wiel Gotshal & Manges, the firm handling Lehman’s bankruptcy, could not be reached for comment.

Filed by Hilary Potkewitz of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce com.

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