Former TBW Workers File Class-Action Lawsuit

Former TBW workers file class-action lawsuit

Employees’ filing claims Ocala-based company failed to provide 60 days’ advance notice of layoffs

By Suevon Lee
Staff writer

Published: Wednesday, August 12, 2009 at 6:30 a.m.
Last Modified: Tuesday, August 11, 2009 at 10:34 p.m.

Less than a week after Taylor, Bean & Whitaker notified nearly 1,000 employees at its Ocala headquarters – and an unknown number of employees elsewhere in the country – that it was eliminating their jobs, the wholesale mortgage lender faces a lawsuit brought on behalf of those workers.

A federal class-action lawsuit claims Taylor Bean failed to give at least 60 days’ advance notice of the mass layoffs, as required by the Worker Adjustment and Retraining Notification (WARN) Act.

Under that federal law, an employer must give at least two months’ notice if a mass layoff will result in the loss of 500 or more employees.

The loss at the Ocala main office and one of its facilities alone totaled 964 positions, according to a WARN notification that Taylor Bean’s Human Resources division recently sent to the Florida Agency for Workforce Innovation (AWI).

And at least 130 employees are known to have been laid off at Taylor Bean’s Cincinnati office, according to a former employee there.

“People have had their whole lives almost destroyed because they didn’t give the employees notice,” said Jack A. Raisner, an employment law attorney in New York. His firm, Raisner Roupinian LLP, is representing the plaintiffs, whose suit was filed Monday in the U.S. District Court for the Middle District of Florida.

While it’s unclear how many Taylor Bean employees could be potential members of the class, the filing states that “the persons … are so numerous that joinder of all members is impracticable.”

As of Tuesday afternoon, Raisner said his office was being “inundated” with former employees inquiring how they could join the lawsuit.

The suit seeks to recover 60 days’ worth of wages and benefits on behalf of those newly unemployed workers, as well as attorneys’ fees.

Taylor Bean, the third-largest FHA-insured mortgage lender and 12th-largest home mortgage provider in the country, effectively shut its business on Aug. 5 following a consecutive series of blows that began when FBI agents seized paperwork from its offices on Aug. 3.

The next day, the Federal Housing Administration suspended Taylor Bean from underwriting its government-insured loans, and the Government National Mortgage Association, or Ginnie Mae, ordered the company to stop issuing mortgage-backed securities.

On Aug. 5, employees were notified their positions were being terminated.

Taylor Bean has 20 days to answer the complaint. The plaintiffs must then submit a motion asking the judge to determine whether the proposed class meets the standard for class certification.

“Our experience is that judges have been very amenable to certify a class in a WARN case because they see the commonality and the economy to the court and to all sides,” said Raisner, who is handling two other class-action lawsuits against Florida mortgage lenders.

“You don’t have to bring an individual case for 3,000 people. You just bring a case for those that are typical,” he added, in explaining the need for class-actions.

Nicholas A. Callahan, a Duval County resident who once worked in Taylor Bean’s IT department, is identified as the plaintiff in the lawsuit and first contacted the national employee rights law firm for assistance.

As protection to employers, the federal WARN Act – first enacted in 1988 – provides for certain exceptions, such as when a company is forced to lay off a mass portion of its work force due to unforeseeable business circumstances and cannot provide 60 days’ notice.

According to the U.S. Department of Labor, which provides guidance to employers and their workers on the WARN Act, such circumstances would involve something outside the employer’s control like an unanticipated, major economic downturn.

But Raisner said in general, that argument is “not very persuasive” – and it’s especially unpersuasive in Taylor Bean’s case.

“A company this size just doesn’t go out of business overnight. It just doesn’t happen,” he said by phone Tuesday. “There are always predicates to this. There are always things that are rolling up to the big event of it going out.”

Taylor Bean, in perhaps anticipating worker backlash to the layoffs, indicated in the WARN notification sent to AGI that “unforeseeable business circumstances” caused the company to shut its operations.

That letter, though dated Aug. 5, was not actually received by the agency until Aug. 10, according to AWI communications director Robby Cunningham.

As for speculation that Taylor Bean could file for bankruptcy, Raisner said the class-action suit would merely move from federal court to bankruptcy court, where litigation would proceed against the debtor. Should that happen, former workers would be “in a position to receive money from the estate that [they’re] entitled to under the bankruptcy code, which might give priority over other creditors,” he said.