Dewey Faces Suit Over Layoffs As US Absorbs Pension Plan

Law360 Megan Leonhardt
May 10, 2012

Dewey & LeBoeuf LLP faced more setbacks Thursday when an employee accused the embattled law firm of failing to give at least 450 employees enough notice for planned layoffs, amid a move by federal regulators to take over the firm’s pension plan.

Document specialist Vittoria Conn sued Dewey in New York federal court, alleging the firm violated provisions of the New York state and federal Worker Adjustment and Retraining Notification Acts, which require business to notify employees of potential employee layoffs.

[…] The plaintiff and class members were terminated by the defendant without cause on their part, as part of or as the reasonably foreseeable consequence of the mass layoffs or plant closing ordered by the defendant, ” the complaint said.

Meanwhile, the Pension Benefit Guaranty Corp. which operates as an independent governmental insurance program for pension benefit plans said it planned to take responsibility for Dewey’s three pension plans, which cover almost 1,800 people.

Dewey’s pension plans were collectively underfunded by more than $80 million, the PBGC said. Under the Employee Retirement Income Security Act, this allowed the PBGC to terminate the plan as of May 11 and step in to pay employees’ benefits up to almost $56,000 a year.

Dewey informed employees Monday that it planned to lay off over 450 employees effective May 11, according to Conn’s complaint. The suit does not specify which staff members were included in the layoffs, but it was reported that the firm’s secretaries and associates had been targeted.

Conn claims that under the federal WARN Act, employers are required to give employees 60 days’ notice, but that Dewey only notified staff May 4 that the firm could potentially close its doors […] .

[…] New York state’s WARN Act which applies to private businesses with 50 or more full-time workers in the state requires businesses to provide employees with up to 90 days’ notice when mass layoffs are expected to affect more than one-third of the staff or more than 250 full-time employees, according to the New York State Department of Labor.

Defendant failed to give the plaintiff and the class members written notice that complied with the requirements of the WARN Act, ” the complaint said.

Conn alleges that if the firm goes through with the layoffs, it is liable for its failure to pay employees earned wages, bonuses, accrued holiday pay and other benefits.

The firm also failed to make * required pension and 401(k) contributions required under ERISA for 60 days after the employees’ termination from Dewey, the complaint says.

The suit is seeking 60 days’ worth […] of laid off employees’ salaries and benefits, with interest, as well as attorney’s fees and costs.

Dewey has struggled in recent months under the weight of a massive debt and overwhelming partner defections that have reduced the number of its global partners from 300 to less than 100.

The firm’s debts include a $75 million draw on a $100 million revolving credit line held by JPMorgan Chase & Co., HSBC Holdings PLC and other lenders, sources familiar with the matter reported last week. Additionally, Dewey took on a massive obligation when it sold $125 million in corporate bonds to insurance companies and others, including the firm’s clients, in 2010.

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Conn is represented by Jack A. Raisner and Rene S. Roupinian of Outten & Golden LLP

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The case is Conn v. Dewey & LeBoeuf LLP, case number 12-cv-3732, in the U.S. District Court for the Southern District of New York.