Former Lehman Employee Files $5M Lawsuit

The suit claims the failed investment bank didn't give workers proper notice.

Nov. 4, 2008— -- NEW YORK (AP) - A former employee of Lehman Brothers Holdings Inc. filed a $5 million lawsuit Tuesday in an effort to open a class action against the failed investment bank.

Miron Berenshteyn, a computer programmer, filed the lawsuit on behalf of more than 100 other former employees who were fired in a round of layoffs on Sept. 9. Most of the employees worked at or reported to a Lehman data center in Jersey City, N.J. or at the company's Manhattan headquarters.

Lehman filed for Chapter 11 in the biggest bankruptcy in U.S. history. It has since sold off major units and started the long process of winding down the rest of its operations and distributing the proceeds among creditors. Lehman, which was once the nation's fourth-largest investment bank, is also the subject of three grand jury investigations.

Lawyers for Berenshteyn argued that Lehman had violated the Worker Adjustment and Retraining Act, which they say requires 60 days advance notice in writing of a layoff. They were notified Sept. 9 that they would be paid for 60 more days but would not have to report to work. After the bankruptcy filing but before the 60 days were up, Lehman stopped paying them, said a lawyer representing Berenshteyn, Jack Raisner of Outten & Golden LLP.

The size of the class, if it is certified, could include about 1,000 former workers.

The lawsuit seeks 60 days of wages and benefits as well as severance pay of one week's wages for every year worked. Lawyers said in the filing the total amount could exceed $5 million.

"We're very confident about the case," Raisner said. "The company will have to make a defense, if it has any."

A call to the office of Harvey Miller, Lehman's bankruptcy lawyer, was not immediately returned.