Compliance April 9, 2015

Real Estate Services Firm Settles Stock Drop Case

LandAmerica Financial Group will pay $5 million to settle claims it held company stock in its 401(k) plan when it was imprudent to do so.
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A class of former LandAmerica Financial Group employees agreed to a $5 million settlement of stock-drop claims arising from LandAmerica’s 2008 bankruptcy.

According to the Proskauer law firm, LandAmerica filed for bankruptcy following the 2008 collapse of its title insurance subsidiary. The complaint alleged that certain LandAmerica directors and officers breached their Employee Retirement Income Security Act (ERISA) fiduciary duties by, among other things, (1) imprudently investing in LandAmerica stock even though they knew that its title insurance subsidiary was backed by inherently risky subprime mortgage loans, and (2) concealing the truth about the firm’s deteriorating condition.

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During the class period of the lawsuit, the value of LandAmerica stock in the company’s 401(k) plan fell, from just more than $28 million, to $76,552.

The Pension Benefit Guaranty Corporation (PBGC) previously took over the defined benefit pension plan from the real estate services firm based in Glen Allen, Virginia, following its bankruptcy.

The settlement agreement has been submitted for court approval. The case is Borboa v. Chandler, E.D. Va Case No. 13-cv-00844.

Compliance April 9, 2015

EEOC Says School Illegally Fired Formerly Retired Worker

A lawsuit filed by the EEOC accuses a school in Wisconsin of firing an employee after learning he was previously retired.
Reported by

Renaissance School, Inc., of Racine, Wisconsin, an owner and operator of government-funded private schools, violated federal law by firing an employee because it considered him too old for his job and because he is male, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit.

According to Julianne Bowman, acting director of the EEOC’s Chicago District, the agency found that, after hiring Boro Bosovich as a principal/supervisor, Renaissance School learned he had retired from a prior job. The school’s owners then began questioning his fitness for the job and making comments related to his age. They fired him a few days after hiring him.

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In addition, during the few days Renaissance School employed Bosovich, at least one of its owners made gender-discriminatory comments, implying that females were more desirable as employees because they were more passive.

The EEOC charges that Renaissance School’s alleged conduct violates the Age Discrimination in Employment Act (ADEA), which prohibits employers from taking adverse actions against employees and job applicants 40 and older based on age, and Title VII of the Civil Rights Act of 1964, which prohibits employers from taking adverse actions against employees and job applicants based on gender. The lawsuit, captioned EEOC v. Renaissance School, Inc., (Civil Action No. 2:15-cv-00411-JPS), was filed in U.S. District Court for the Eastern District of Wisconsin.

“Employers must recognize that employees can contribute to our economy at any age and that they must treat men and women equally,” says EEOC Chicago Regional Attorney John C. Hendrickson.

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