CLOSEClose Law.com Menu
 
X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
When an employee-benefits arrangement at a pair of Norcross, Ga., companies allowed younger workers to receive a more generous severance package than their older counterparts, the result was an age discrimination suit that cost the companies $2.6 million in settlements and legal fees. Now OFS Fitel and sister company OFS Brightwave have sued their former law firm, Epstein Becker & Green, for the cost of the litigation. The companies claim in filings at Georgia’s Fulton County Superior Court that the New York-based firm signed off on the benefits policy but failed to warn them of the legal consequences. Ronald M. Green, a co-founder of the 370-lawyer firm and an attorney on the OFS work, denied the malpractice allegations. He added that the firm, which has an Atlanta office with about 50 lawyers, was planning to file a “serious counterclaim” against its former client and the OFS entities’ general counsel, Carl R. Johnston. Green would not elaborate on the counterclaim but said officials of his former client neglected to get the proper releases from laid-off employees. “They dropped the ball,” Green said. “They should have gotten these releases. They decided not to, and it had nothing to do with us.” Johnston and the outside counsel handling the suit against Epstein Becker, Jeffrey O. Bramlett of Bondurant, Mixson & Elmore, both declined to comment for this story. The OFS entities have asked the court to order Epstein Becker to return the $1.2 million the companies paid for “negligent advice.” Added to the $2.6 million the companies claim were paid to settle the dispute over the severance packages, plus punitive damages, the OFS entities are seeking at least $3.8 million from Epstein Becker. Nancy E. Rafuse, the managing partner at Ashe, Rafuse & Hill, provided the expert affidavit to accompany the OFS complaint. She said the Epstein Becker lawyers deviated from the standard of care by “failing to advise” OFS of the age discrimination violation risks, by preparing a “Q’s and A’s” document announcing the policy of disparate treatment and by drafting separate job-offer letters contemplating fewer benefits for older workers. OFS Fitel v. Epstein Becker & Green, No. 2005CV107111 (Fult. Super. filed Oct. 4, 2005). AN ILL-TIMED ACQUISITION The dispute stems from a Japanese company’s ill-timed acquisition of a Lucent Technologies business unit. In 2001, the Furukawa Electric Co. partnered with an American technology company, CommScope, to purchase Lucent’s fiber optics business based in Norcross for $2.5 billion. Following the transaction, the Lucent business unit split into OFS Fitel and OFS Brightwave. According to the complaint, after Sept. 11, 2001, CommScope’s financial position deteriorated. The company scaled back its participation in the joint venture and eventually relinquished its stake to Furakawa. That deal closed on Nov. 16, 2001, and not long afterward, the fiber optics business plummeted, causing the OFS entities to lay off hundreds of employees in Norcross over the next two years. However, the benefits package offered to certain management employees at OFS was peculiar: Some younger workers ended up receiving more money in severance than their older counterparts. Prior to purchasing the Lucent business unit, officials at OFS apparently questioned whether they could institute the uneven benefits policy upon completion of the sale. According to the suit, lawyers for Epstein Becker researched the problem — which came to be known as the “double dip” issue — and concluded that the OFS entities could treat older workers less favorably than younger workers with respect to their severance packages and paid vacation. The reason was that the older workers already were entitled to retirement benefits from Lucent Technologies. Therefore, when the OFS entities calculated severances, the younger workers received more money because they received credit for their years at Lucent while the older workers eligible to receive retirement benefits from Lucent could not “double dip” and get additional money from OFS. The attorney defending Epstein Becker in the Fulton litigation, Robert B. Wedge of Shapiro Fussell, said the plaintiffs did not consult Epstein Becker at the time of the management layoffs. “So no advice was given at that time concerning how the layoffs should be handled, what people should receive or what type of releases should be signed,” he said. “It is our understanding that that was handled in-house.” CHOOSING TO SETTLE The benefits arrangement resulted in a federal suit filed by about 30 former employees who claimed violations of the Age Discrimination in Employment Act of 1967. Ritger v. OFS Fitel, No. 1:04CV0268 (N.D. Ga. filed Jan. 30, 2004). The OFS entities settled the action for $1.9 million and paid another $450,000 in legal fees. The companies avoided further litigation by resolving two individual claims for approximately $250,000. According to the Fulton suit, Epstein Becker did not participate in the federal litigation, and the OFS lawyers said the law firm “declined to lift a finger to help … unless paid to do so.” However, Green said the OFS entities elected to settle the claims on their own. Epstein Becker never was “asked to assess the merits of the claims” nor did the firm have “any involvement” in the settlement, he added. Green said he is confident that the legal advice rendered by Epstein Becker was correct and that the OFS entities made the wrong choice to settle and then come to the firm asking for money. “We are confident that the claims against them could have been successfully defended,” Green said.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.