Dewey Pension Plans Seized, $80 Million Underfunded – Lawsuit over 450 Fired

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On Thursday, U.S. regulators seized control of pension plans at Dewey & LeBoeuf, and the firm faced its first lawsuit over the firing of employees. The Pension Benefit Guaranty Corporation said that the three pension plans covering 1,800 current and future retirees were underfunded by $80 million. Angelo Kakolyris, the spokesman of Dewey, who maintained throughout the year that everything was according to plan and the partner defections would have no impact on the firm’s finances, declined to comment on the latest developments. The pensions regulator said that it was moving in to secure its ability “to collect against the firm’s affiliates that share funding responsibility for the pension plans.”

On the same day, Vittoria Conn, an employee of Dewey’s documentation department, filed a lawsuit alleging that the firm owes her 60 days of pay for failing to provide adequate notice of her termination. The lawsuit has asked for class-action status and stated that Dewey “terminated approximately 450 employees … on or about May 7, 2012, effective on or about May 11.”

The lawsuit was brought in federal court at New York where according to the WARN Act, employers are required to provide 60 to 90 day’s notice before initiating mass layoffs. Dewey notified employees on Monday that they were losing their jobs on Friday.

  

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More than 180 partners of the roughly 300-partner firm have already left, while the rest are negotiating frantically for alternatives. The former chair of the firm Steve Davis is under criminal investigation by the Das office, and three members of the five-member managing committee have already left the firm. Also the two lawyers who were responsible of conducting an internal investigation in the affairs of the former Chairman have jumped ship.

In a job market still reeling from the recession, the associates and secretarial staff are facing a nightmarish situation with every employer in the market aware that Dewey staff are in a precarious situation and stressed. Naturally, the offers that are coming to those with Dewey on their resumes as last employer are close to inhuman.

Kent Zimmermann, a legal consultant at the Zeughauser Group told Reuters that “When it comes to associates and non-attorney staff, those are the people I really feel for because they’re going to have a much harder time getting work.”