Better has increased severance for its 900 recently laid-off employees to 60 days of pay, up from four weeks, according to an email the online-mortgage startup sent to two separate laid-off employees Thursday that was viewed by Insider.
The increased compensation comes with lawyers exploring litigation that would accuse Better of breaking a federal law requiring medium and large employers to give notice before layoffs.
It appears appears to have helped keep some litigation at bay, with Benjamin Johns telling Insider on Thursday that his firm, Chimicles Schwartz Kriner & Donaldson-Smith LLP, which has offices in Delaware and Pennsylvania, had removed a call from its website for laid-off employees to provide information.
The firm had said it was "investigating" a case against Better over the Worker Adjustment and Retraining Notification Act, a law requiring some employers with more than 100 workers to provide written notice of layoffs 60 days in advance. Better had roughly 10,000 employees before the abrupt termination of 9% of its workforce on December 1.
"They decided to extend the severance period, and it just so happens to have coincided with the WARN Act framework to give employees 60 days' notice, so we decided not to pursue it anymore, at least for the WARN Act damages," Johns said.
"We were looking to do something to help these employees who were abruptly treated so horribly. Even if we didn't file a suit, if we had some little piece or part of this, we consider that a victory," he said, referring to Better's decision to extend its severance offer.
Insider talked to a laid-off employee who described themself as working with a different law firm over the possibility of a class-action suit.
Better did not respond to a request for comment by press time.
Better CEO Vishal Garg sparked backlash after conducting the layoffs over a three-minute Zoom call last Wednesday. He later acknowledged arguing with laid-off employees on Blind, a job-oriented social-networking website, under a pseudonym. In the Blind forum, he accused employees of "stealing" from the company and its customers by working fewer hours than they logged.
This week, three marketing and communications executives resigned and Garg sent the company an apologetic email before posting it to the company's websites. He then announced early on December 10 that he is taking a leave of absence from Better.
As lawyers and plaintiffs started to mobilize during the early stages of their class-action suits, laid-off employees received an email Thursday morning that Better was doubling their severance payout.
"We've heard your feedback, and our priority is to make this transition as smooth as possible for you," the email, signed by the people team at the company, said.
Laid-off employees are now set to receive a payout with 60 days' worth of pay on Wednesday. Medical benefits remain the same, with Better providing one month of medical insurance, followed by two months of COBRA insurance, paid for by the company.
Previously, when the severance pay was still 30 days, Insider reported that former and current employees had started a hardship fund to financially assist affected employees. The fund's organizers had identified more than 100 people who might not be able to pay their bills next month.
The updated severance email also offered employees help finding a new job and said the company didn't intend to enforce any noncompetes that employees might've signed.
