NEW YORK, April 5 (Reuters Legal) - Employees of failed law firm Howrey LLP have filed a suit against their former firm, saying it failed to give them 60 days notice that they were being laid off.
The firm, which had announced an orderly wind-up in March after a steady stream of partner defections, sent an abrupt memo to employees on March 30 terminating them effective the following day.
The suit, filed on Monday, seeks class-action status for hundreds of workers who said they are owed 60 days of wages, pension contributions, health coverage and holiday pay.
The lawsuit relies on a novel interpretation of the Worker Adjustment and Retraining Notification Act, which was passed in 1988 to protect industrial workers, said labor law expert Marcia McCormick of Saint Louis University. "It was originally passed to deal with mass layoffs in factories and plant closings," McCormick said. "Detroit, Toledo, places like that."
Jack Raisner of Outten & Golden, the New York firm bringing the suit, said that the law, known as the WARN Act, should apply equally to professional settings. The firm has brought successful WARN suits against employers like Taylor, Bean & Whitaker, the mortgage company that collapsed in 2009, but this is the first such claim they have filed against a law firm.
Howrey, whose only remaining contact information is an e-mail address, did not immediately respond to a request for comment.
Under the WARN Act, Howrey can avoid liability by showing that its collapse or closure was caused by events that were not reasonably foreseeable. In a split decision in 2005, the 7th U.S. Circuit Court of Appeals ruled that employees of Arthur Andersen could not pursue a WARN claim because the indictment that brought down the accounting giant was not foreseeable.
If the employees are able to make a successful case under the WARN Act, they will still face the challenge of collecting the money they say they are owed. Howrey, like most law firms, is a limited liability partnership, meaning that it may have few or no assets even though the firm once had revenues of more than $500 million a year.
Many of the lawyers at Howrey have since moved to other firms. Raisner, the plaintiffs' lawyer, said that the WARN Act makes it easy to cut through legal divisions that separate businesses and individuals, but that it is premature to predict whether former Howrey lawyers will be sued.
The lawsuit was filed in federal court in the Southern District of New York. The plaintiffs' lawyers said they will serve Howrey this week.
The case is Stephanie Langley et al v. Howrey LLP, U.S. District Court for the Southern District of New York, No. 11-cv-2317.
(Reporting by Jeff Roberts of Reuters Legal)