Posted on 15 Nov 2011
Former employees of MF Global sued the failed brokerage firm on Monday in separate lawsuits, arguing that they were laid off in violation of labor laws and seeking class-action status.
In their complaints, filed in federal bankruptcy court in Manhattan, the plaintiffs accused MF Global of not following the terms of a federal law that requires a company to provide 60 days’ written notice of upcoming mass layoffs. They also cite a similar New York law that requires 90 days’ notice.
MF Global announced last Friday that it would lay off 1,066 employees in its core brokerage unit, as the firm is eventually wound down in its Chapter 11 proceeding. The layoffs, which account for nearly all of MF Global’s employees in the United States, were made nearly two weeks after the firm filed for bankruptcy.
The trustee overseeing the liquidation of MF Global’s brokerage unit, James W. Giddens, said last week that the job cuts were meant “to preserve assets and identify and marshal other property to maximize the estate in a manner that is fair to all customers and other creditors.”
Both Mr. Giddens and other regulators are trying to account for money missing from MF Global’s customer accounts, a shortfall of just under $600 million.
Under the terms of the layoffs announced last week, employees did not receive severance pay, though they will be paid salary through Tuesday. They will also receive health benefits through the end of the month.
The latest accusations against MF Global were laid out in two separate lawsuits. One was brought by Todd Thielmann, a vice president in credit risk management in New York, and Pierre-Yvan Desparois, a floor broker in Chicago. The other was brought by Natalia Sivova, whose position wasn’t disclosed.
The complaint by Mr. Thielmann and Mr. Desparois didn’t name as a defendant MF Global Inc., the legal entity that includes the brokerage arm where the layoffs were made. The complaint by Ms. Sivova does include the brokerage as a defendant.
Another employee, Anthony Abruzzo, sued MF Global and its brokerage arm on Friday.
The lawsuits seek at least 60 days’ worth of unpaid wages, bonuses and commissions, holiday and vacation pay and pension or 401(k) contributions.
A spokeswoman for MF Global, Tiffany Galvin, declined to comment.
A spokesman for the trustee overseeing the liquidation of MF Global’s brokerage, Kent Jarrell, said in a statement: “The trustee acted appropriately in connection with the termination of employees as part of the court-mandated liquidation and wind down of MF Global Inc.”