First Guaranty Mortgage Corp. Facing Class Action After Firing ‘Nearly 80%’ of Workforce

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A proposed class action lawsuit alleges First Guaranty Mortgage Corporation failed to provide requisite notice when it laid off nearly 80 percent of its workforce in June 2022. 

The 10-page complaint alleges Plano, Texas-based First Guaranty ran afoul of the federal Worker Adjustment and Retraining Notification (WARN) Act by failing to provide at least 60 days’ advance notice prior to terminating the majority of its employees, who were reportedly informed of the immediate layoff on or about June 24 amid a mortgage industry downturn. 

The filing also claims that fired First Guaranty employees, including underwriters, mortgage loan processors, mortgage closers and mortgage funders, are entitled to recover up to 60 days’ wages and benefits under the law. The case alleges First Guaranty also owes 60 days’ commissions, bonuses, accrued holiday pay, accrued vacation and pension and 401(k) contributions, as well as health benefits under COBRA. 

According to the lawsuit, First Guaranty cited “significant operating losses and cash flow challenges” as the impetus for the layoff. 

Per the case, the majority of the employees laid off by First Guaranty were remote and did not work at any site owned, occupied or controlled by the company. 

The lawsuit argues that the defendant was obligated to provide advance notice of the layoffs under the WARN Act in that it employed more than 100 employees who in aggregate worked at least 4,000 hours per week, exclusive of overtime, within the U.S. 

The suit looks to represent all former First Guaranty employees who worked at, reported to or received assignments from the company and were terminated without cause on or about June 24, 2022 as the “reasonably foreseeable consequence” of the mass layoff ordered by the defendant. 

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