A recently shuttered local lender claims it was within its rights when it abruptly laid off its entire workforce with no advance notice.
Live Well Financial, the once fast-growing, Chesterfield-based reverse mortgage company that in early May ceased operations and cut its staff of more than 100, argues in a lawsuit in federal court that it does not owe back wages to those workers, despite not giving them 60 days’ notice.
That argument was made in the company’s response to the lawsuit filed by former Live Well employee Monica Williams, who claims federal law requires employers to give workers 60 days’ notice prior to a mass layoff, and that she and her former fellow employees should be compensated for those 60 days.
Live Well, in calling for the suit to be dismissed, claims it acted in “good faith and according to its commercially reasonable business judgement” in laying off its employees.
The company argues that Williams’ claims are barred by the Federal WARN Act’s “faltering company exception” and “unforeseeable business circumstances exception,” both of which offer troubled companies a pass from having to abide by the 60-day notice normally required under the law.
Williams’ suit was filed May 8, a week after Live Well shut down on May 3. Williams worked at Live Well’s headquarters in the Boulders office park in Chesterfield as a loan account manager.
The suit was filed in Williams’ behalf individually and also as a class-action case on behalf of similarly situated Live Well workers, of which the suit estimates there are 125. They worked at either the Chesterfield or the company’s now-shuttered San Diego office.
Attorney Stephen Brauerman of the Bayard Law Firm in Delaware represents Live Well in the case. Brauerman had no comment on the case when reached by phone Tuesday.
Williams is represented by Delaware attorney Christopher Loizides, who did not return a message Tuesday afternoon.
Williams’ case was the first of at least two lawsuits that have resulted from Live Well’s collapse.
Troy, Michigan-based Flagstar Bank sued Live Well founder and CEO Michael Hild on May 22, looking to recoup collateral on tens of millions of dollars’ worth of allegedly defaulted loans.
The bank, which was one of Live Well’s main lenders, claims Hild was the guarantor on more than $100 million worth of loans. The bank also has added Live Well as a defendant in that case.
Hild and Live Well have yet to file a response in that case.