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The Law Office of David J. Stern, the ex-Florida Foreclosure King, has been slapped with a class action lawsuit.
About 700-850 full-time employees are expected to join the case.
The lawsuit claims that the firm and its processing arm DJSP Enterprises failed to give laid off employees proper notice under the federal Worker Adjustment and Retraining Notification Act (WARN Act).
The firm failed in 2010. It was alleged to have contributed to improper documentation and filing of foreclosure-related documents. The term used to describe the firm's work was dubbed "robo-signing."
In its heyday, the firm employed more than 1,000 employees.
It stopped its foreclosure work earlier this year. Only a handful of employees remain at the office while the rest were laid off.
The WARN act mandates employers give employees 60 days advance notice of mass layoffs.
Covered mass layoffs include layoffs where 500 or more employees will lose their jobs within a 30-day period. It also includes layoffs of 50-499 employees if they make up at least 33% of the company's current workforce.
Companies that violate the WARN Act are liable to employees for back pay and benefits during the period of the violation, up to 60 days.
If the class action prevails, the Florida Foreclosure King's firm will be paying a lot of aggrieved employees.
What does this mean for your law firm? Nobody wants to imagine the prospect of laying off employees. But, mass layoffs can be necessary during dire economic times.
Luckily, unlike the Law Office of David J. Stern, solo practitioners and small law firms likely won't run afoul of WARN provisions. The federal law only covers layoffs of at least 50 employees or more.