November 25, 2009 - Thirteen former employees of Citigroup and Morgan Stanley-Smith Barney filed a federal class action lawsuit on Monday against the two firms arising out of Smith Barney's failure to provide the 60-day WARN notification to 179 employees in its Document Services Department prior to the termination of their employment on October 12, 2009. The case was filed on November 23, 2009, in the United States District Court for the Eastern District of New York, and has been assigned to Judge Nicholas Garaufis in the Brooklyn courthouse.
Plaintiffs John Ferrer, Roy Henry, Gerald James, Khalid Johnson, Anthony Lopez, Rosarito Quezada, Juana Quezada, Nicholas Rivera, Amanda Simmons, Waiman Sin, Eugenia St. Hill, Warren Tucker and Aquiles Vargas allege that were employed in the Business Document Services Department in Citigroup's Brooklyn Army Terminal (BAT) when they were terminated without warning. The defendants apparently decided to cease operations at the BAT facility, which provides printing, copying and other document support services for the defendants' operations nationally, fire at least 179 of the department's employees, and sign an outsourcing contract with Broadridge Financial Solutions, Inc. (BFS) of Lake Success, New York (NYSE: BF).
On November 2, 2009, BFS filed its quarterly 8-K report in which it announced that it had recently signed a seven-year contract with Morgan Stanley-Smith Barney worth more than $35 million annually to provide out-sourced document production services.
Morgan Stanley-Smith Barney is a joint venture between Citigroup and Morgan Stanley that was launched in June 2009 in which Citigroup holds a 49% percent stake.
The suit alleges that the defendants failed to provide the plaintiffs with the minimum 60-day notice period required under the federal Worker Adjustment and Retraining Notification Act (WARN) and the 90 days required by the New York WARN Act before they ceased operations at the Brooklyn facility. The suit seeks lost pay and benefits as well as attorneys fees and costs.