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A legal dispute over employee severance pay resulting from Brobeck, Phleger & Harrison’s dissolution may be an eye-opener for clients. In a declaration, Homiyar Watchha, Brobeck’s former head of Enterprise Application Services, complained about the way client files were handled in the wake of Brobeck’s announcement in January to dissolve. Watchha said the processes he created to protect client information were disregarded as the firm fell apart and after Morgan, Lewis & Bockius took over Brobeck’s client materials. He alleges he was fired when he voiced his reservations. “My concerns were as follows, the risk of confidential client data being shared by multiple legal entities (law firms) was certainly high,” Watchha said. “The fact that now there are Morgan Lewis staff working on Brobeck systems posed further risk to client confidentiality and conflicts of interest.” The declaration is supposed to help the plaintiffs make their case in Robert McCaffrey a/k/a Broke Beck v. Brobeck, 03-418426, which is seeking 60 days severance pay under the California State Workers Adjustment and Retraining Notification (WARN) Act and the California Labor Code. Stephen Snyder, who heads Brobeck’s liquidation committee, said that protecting client files was a priority but that the firm’s resources were stretched thin at the time. “The very few of us that were working on these issues went to extraordinary lengths to protect the clients’ interests and the clients’ confidentiality,” Snyder said. He added that no one brought problems to his attention. Snyder, who is now an of counsel at Morgan Lewis, declined to comment about the severance pay dispute. But in court filings, Brobeck’s attorneys have maintained the firm is not liable for severance payments. The suit was initiated by McCaffrey, a former document processor who used the moniker Broke Beck on the Internet to rally other employees to join him in suing for severance pay. Mark Thierman, a Reno, Nev., labor lawyer who represents the plaintiffs, said Watchha’s declaration illustrates how Morgan Lewis became a continuation of Brobeck’s business. That means the plaintiffs are entitled to severance, he said. Under the WARN Act, companies must pay employees severance pay if there’s a company closure or major layoff without 60 days notice. A separate declaration in the suit reveals slides prepared for a November 2002 partners meeting that suggested the firm was contemplating a major layoff of up to 153 staff and contract employees. The scenario Watchha describes puts the firms in a bind, Thierman said. If Morgan Lewis, which hired many Brobeck lawyers and staff, isn’t a continuation of the business, then under California Bar rules, Morgan Lewis staff shouldn’t have been handling client files without permission from the client. “Frankly, it’s between them and the Bar,” Thierman said. “It’s not my call to make but I think they have some explaining to do.”

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