A former director at Better is suing the lender for allegedly laying him off less than one hour after requesting his previously granted maternity leave for September begin immediately following the birth of his daughter in late August.
A late August layoff round impacting 26 workers included 17 people either already on or planning to take maternity or paternity leave in the near future, according to the lawsuit by Ryan Peugh, a former director of management. Peugh accuses Better of retaliation under the Family Medical Leave Act in the complaint filed Friday in the U.S. District Court for the Southern District of New York.
More impacted employees are in a similar situation, alleged Peugh's attorney Marjorie Mesidor, partner at Phillips & Associates. She declined to comment further.
"It is our belief those individuals were targeted to be laid off — at the very least first due to their status," she said in an email Tuesday morning.
A company spokesperson in a statement Wednesday said Better's decision to include Peugh in the reduction in force was made "several days beforehand."
Better, which once had a workforce of over 10,000 employees,
Peugh joined Better in November 2020 as a senior manager of product management and was promoted in October 2021, earning $350K annually with an additional 20% bonus of his annual salary, according to the suit. In June, he contacted leave representative Kayla Nicholson of the Larkin Group to request paternity leave from Sept. 1 to Nov. 23, which was granted July 1.
In August, Better changed its leave of absence policy, which automatically reduced his 12-week paternity leave to a 4-week period, the suit said. Peugh's daughter was born on Aug. 26, and at 10:52 a.m. that day he told Nicholson his daughter was born and he'd request his paternity leave immediately. At 11:33 a.m. he received a voicemail from an unidentified representative, the suit said, stating his employment was terminated due to a "corporate layoff."
Peugh said he wasn't offered any further explanation or justification for his termination. Fired Better employees conducted internal research and polls to determine that the majority of employees impacted by the corporate layoff round were already on maternity or paternity leave or planning to take it, according to the complaint.
The suit cites the national FMLA Act of 1993 which states eligible employees shall be entitled to 12 work weeks of leave because of the birth of a child and subsequent care, and employers are not legally allowed to interfere, restrain or deny the right.
The suit didn't specify the damages sought by Peugh. The case was assigned to a judge and an electronic summons was sent to Better's offices Monday, according to court records.
Better also continues to
Following the initial June complaint to the Occupational Safety and Health Administration regarding Better, the lender prematurely called loans held by Pierce, reneged on a post-termination agreement in March to extinguish her balances and requested cash payments, according to Pierce's counsel. Better has also filed a lawsuit against Pierce on the issue in New York State Supreme Court, attorneys said.
In a statement Wednesday, a company spokesperson said Pierce borrowed more than $2 million from the company pursuant to two promissory notes to purchase shares and the notes are due and payable under their terms. Pierce hasn't paid anything back to Better, the statement added, nor returned any of the shares she purchased with the money the company loaned her.
"The company is simply seeking to enforce the notes in accordance with their terms," the statement read. "Additionally, we find Sarah's claims doubly spurious given that she had no trouble buying and maintaining a $11.5M ski chalet in Aspen at the same time she was unable to pay the company back the loan she owes."
Pierce's attorney Neal Brickman responded in an email Wednesday calling the statement "egregiously inaccurate." Better misrepresented what the promissory notes say, he said, and that the lender has no personal recourse against Pierce on 49% of the loan balances. Pierce's Colorado residence was paid for by her husband, a fact Pierce has reiterated to CEO Vishal Garg, Brickman said.
"Better's management is a collection of really bad people whose questionable integrity and dishonesty are matters of extensive public record," he wrote.
Pierce's OSHA complaint will be filed in federal court at or around Nov. 28, her attorneys said in filings. She's requesting compensatory damages of $25 million or greater and punitive damages no less than $50 million, according to the suit.
