Morgan Lewis & Bockius could be liable to pay up to $20m (£10.6m) in severance pay to former lawyers and employees of collapsed firm Brobeck Phleger & Harrison.
Last Tuesday (17 February) the group of former Brobeck employees who filed a suit against the defunct firm and Morgan Lewis, claiming entitlment to 60 days’ severance pay, were given the green light to proceed to discovery.
Morgan Lewis will be liable if it can be successfully argued that taking on 50 former Brobeck partners plus other lawyers constitutes a continuation of the business.
Morgan Lewis partner Thomas Reinert, who is advising the firm, told The Lawyer the $20m is inconsistent with what the plaintiffs’ adviser Mark Thierman estimated and his own assessment. US District Judge Claudia Wilken granted Morgan Lewis summary judgment on three of five points.
Judge Wilken held that Morgan Lewis was not the plaintiffs’ employer and could not be held to be an alter ego under the Federal Worker Adjustment and Retraining Notification (WARN) Act.
The judge, though, denied Morgan Lewis summary judgment on whether the firm is a purchaser and/or successor of Brobeck under the Federal and California WARN Acts respectively.