Better.com laid off workers on parental leave, suit claims

A former director at Better is suing the lender for allegedly laying him off less than one hour after requesting his previously granted paternity leave following the birth of his daughter begin immediately.

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 representative for Better did not return a request for comment.

Better, which once had a workforce of over 10,000 employees, cut its payroll by 72% in the first six months of the year in several large layoff rounds, moves in response to the diminishing mortgage market. The company has also offered voluntary separations to some of its workforce.

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 battle a lawsuit from the company’s former second-in-command Sarah Pierce, who accuses the lender of misleading investors about its financial performance and retaliating against her for raising concerns. Counsel for Pierce last week asked a judge to grant a motion to amend her original complaint to include an additional charge of retaliation.

Following the initial June complaint to the Occupational Safety and Health Administration regarding Better, the lender allegedly prematurely called loans held by Pierce, reneged on a post-termination agreement in March to extinguish her balances and requested cash payments. Better has also filed a lawsuit against Pierce on the issue in New York State Supreme Court, counsel said. 

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. 

The company didn’t respond to a request for comment on Pierce’s lawsuit.