Former Employees Sue MF Global
MF Global, the derivatives firm that filed for bankruptcy protection just two weeks ago, was named in a lawsuit filed Monday by two former employees alleging that the company broke federal worker protection rules by not giving workers 60 days notice that it was closing up shop. Founded as Man Financial, the company ceased operations on November 11th, effectively laying off its 1,066 workers, which the lawsuit claims is a direct violation of the Worker Adjustment and Retraining Notification Act, often referred to as the "WARN" Act.
"Given its deteriorating financial condition, MF Global clearly knew long before November 11, 2011 that it was going to have to close its doors and there is no reason WARN Act notices shouldn't have been given," read a statement from Charles Ercore, the lawyer representing Todd Thielmann and Pierre-Yvan Desparois, the two MF Global employees who filed the suit, which is seeking $25 million in damages, the sum of 60 days pay for all 1,066 workers dismissed when the firm closed its doors.
The suit was not the only claim filed against MF Global on Monday, either, as a separate complaint was lodged on behalf of Natalia Sivova, another former worker, seeking class-action status to recover the 60 days pay required by law. Under the terms of MF Global's liquidation, workers are to be paid through November 15th and company health benefits will continue through the end of November, but no further severance package was offered.
MF Global went bankrupt due to $6.3 billion in exposure to European sovereign debt, much of it losing half its value in the latest Greek bailout agreement, leading to a reduction in MF's credit rating and demands of higher collateral from the firm's trading partners. Federal authorities have launched an investigation into the failed brokerage after $633 million came up missing when regulators began liquidating the company's assets as part of the bankruptcy process.
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