Celebrity Home Loans is facing a potential class action suit from its ex-employees who were laid off “abruptly” in February and who are claiming Celebrity still owes them back pay.
The plaintiffs claimed in their complaint Celebrity failed to comply with the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to provide employees at least 60-days’ notice prior to termination of employment.
The complaint characterized Celebrity’s actions as “callous” when it sent separation letters to approximately 92 percent of its workforce, informing them they were to be terminated that same day. Making matters worse, the letter allegedly informed the employees they would not receive timely compensation for the pay period which ended three days later.
“For many, the outstanding pay included salaries, wages, and commissions earned during the entire month of January and first half of February,” the complaint said. “Nor would separated employees be receiving timely payment for accrued vacation time and other final compensation owed at the time of separation.”
According to the complaint, days prior to the notice of termination being distributed, Celebrity held a company-wide conference call to inform its employees of its acquisition by On Q Financial, as well as the immediate furlough of approximately 75 percent of the staff, with no reinstatement date provided.
Celebrity informed its terminated workers the deal with On Q would provide the liquidity necessary to meet its pay obligations. An executive from On Q later disclosed the negotiations to acquire Celebrity had fallen apart because “[t]here was nothing left to acquire” following the mass termination of nearly all of Celebrity’s staff.
As compensation, plaintiff is seeking certification of a class for all affected workers, an award of damages equal to the amount of back pay and any recoverable benefits, as well as an award of damages equal to 5 percent of the amount of any underpayments for each month during which underpayments remain unpaid.