It appears that at least two of the 250 employees summarily laid off from Florida insurance services provider, Patriot National, have filed suit in U.S. District Court for the Southern District of Florida seeking class-action status and “60 days’ worth of unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension, 401k contributions, and health insurance benefits. The suit alleges those wages and benefits are owed because the insurance services provider violated the federal Worker Adjustment and Retraining Notification (WARN) Act by not giving 60 days of advance notice of the employees’ impending terminations.”
Unfortunately, this is just another chapter in the muddled mess that is Patriot National. It appears that the layoffs are a result of financial restructuring triggered by the State of Florida placing Patriot’s largest customer, Guarantee Insurance Company, a provider of workers compensation services, into a supervised receivership after discovering financial irregularities. What makes this situation especially difficult is that both Patriot and Guarantee were controlled by major shareholder Steven Mariano, who until recently served both Guarantee and Patriot National as their CEO.
According to Florida State Insurance Commissioner David Altmaier, “an audit determined that a $42.2 million surplus that Guarantee reported having on June 30 didn’t actually exist, and the company was instead $236,775 in debt. Guarantee violated state law by transferring $15.7 million to Mariano in 2016 and 2017 ‘with no discernible business purpose and no discernible benefit’ to the company and Mariano ‘benefited individually’ from the transaction.”
What makes this situation troubling is that it appears that Patriot allegedly agreed to provide $30 million to Guarantee in exchange for Guarantee extending its services contract with Patriot by at least 10 years and that Steven Mariano resigned as president and CEO on July 10, 2017, with a reported severance agreement worth $10 million. Of course, Mariano is suing the company’s former attorneys and laying the blame for the financial difficulties on their actions.
According to Patriot’s website, “Patriot National, Inc. is a national provider of comprehensive technology and outsourcing solutions that help insurance companies and employers mitigate risk, comply with complex regulations and save time and money.” It now appears that they could not mitigate their own risks, comply with complex regulations, and save their employee’s jobs.