Employee files suit in New York alleging the online mortgage company fired him less than an hour after he told them his daughter was born. More than a dozen others impacted, lawsuit says.

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Better.com laid off 17 employees either on parental leave or planning to take leave soon during the company’s latest round of layoffs over the summer, according to a new lawsuit filed against the company.

A former employee filed the lawsuit in the Southern District of New York alleging the battered mortgage lender violated the Family and Medical Leave Act when it cut a total of 26 corporate employees in late August.

The suit sheds light on Better’s latest round of layoffs and puts a spotlight back on the company after past management decisions since December have drawn negative attention amid a downturn.

The suit was filed by Ryan Peugh, who was director of product management until August, according to the lawsuit. National Mortgage News first reported on the lawsuit, which Peugh filed on Nov. 4.

Peugh obtained permission for three months of leave on July 1, according to the suit, but the company changed its parental leave policy on Aug. 24, two days before Peugh’s daughter was born.

At 10:52 a.m. on Aug. 26, Peugh let a company representative know that his daughter was born and requested to begin leave immediately.

At 11:33 a.m. that day, a different representative left Peugh a voicemail letting him know he was fired due to “corporate layoff,” the suit says.

In a statement to Inman, a Better spokesperson said: “We disagree with these allegations and our response will be set forth in our court filings.”

Peugh alleges in the lawsuit that Better discriminated against him because of his familial status, pointing to his being laid off less than an hour after requesting to begin pre-approved leave.

“Notably, based on internal research and polls created by [Better’s] terminated employees, 17 of the 26 employees affected by the ‘corporate layoff’ were either already on maternity/paternity leave or planning to take maternity/paternity leave in the imminent future,” the suit alleges.

The suit doesn’t specify how many of those employees were actively on parental leave. Peugh asked the court for a jury trial and is requesting damages for lost wages, benefits and other damages.

As the real estate industry continues lurching to a down market, Better has struggled in its attempts to downsize its employee ranks and find a path forward as a private company looking to go public.

Once a company boasting over 10,000 employees, Better laid off approximately 60 percent of its workforce between December 2021 and August, when the latest round of layoffs was made public.

The company was on track to become publicly traded by merging with a special purpose acquisition company (SPAC), but that merger has been repeatedly delayed as the company struggles.

As U.S. tech and tech-centered real estate companies continue shedding employees amid the ongoing rapid slowdown of the housing market, Better’s merger was delayed until March 8, 2023.

Email Taylor Anderson

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