Better.com, the online mortgage firm that stoked outrage by firing 900 employees via Zoom on Monday, increased its severance package for affected workers, according to a report from Insider

The outlet wrote that Better will now provide 60 days of severance pay, up from its original four-week timeline. The lender was apparently forced to increase its offer after the first one was so insulting that it may have violated federal labor laws.

The announcement came just as law firms began to signal that they were exploring class-action suits on behalf of the laid-off workers. While the benefits increase appears to have stopped at least one suit in its tracks, other workers have told reporters that they’re still working with attorneys to build a case against the mortgage business. 

Vishal Garg, Better.com CEO, stoked outrage when he callously fired 900 workers just before the holidays in an insulting Zoom call. Now, he's offering increased severance pay to affected workers to avoid a lawsuit.
Vishal Garg, Better.com CEO, stoked outrage when he callously fired 900 workers just before the holidays in an insulting Zoom call. Now, he’s offering increased its severance package for affected workers to avoid a lawsuit. Photo Credit: TikTok

Better.com Ups Severance Pay Amid Scandal

According to reports, Chimicles Schwartz Kriner & Donaldson-Smith, a Philadelphia-area law firm that specializes in class-action suits, said on its website that it was building a case against Better.com for alleged violations of the Worker Adjustment and Retraining Notification Act (WARN). 

Under WARN, some employers are required to notify workers 60 days before they’re laid off, a stipulation which the mortgage lender’s insulting Zoom call did not appear to meet. But attorneys said they were scrapping the case in light of the company’s new severance policy. 

“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,” Benjamin Johns, a lawyer with the firm, told Insider. “So we decided not to pursue it anymore, at least for the WARN Act damages.”

Still, the firm sees the increased benefits for laid-off workers as a win. 

“We were looking to do something to help these employees who were abruptly treated so horribly,” Johns said. “Even if we didn’t file a suit, if we had some little piece or part of this, we consider that a victory.”

Vishal Garg, Better.com CEO, increased severance pay for the 900 employees he fired over Zoom. His first offer was so low that it may have violated the WARN Act, a federal labor law.
Vishal Garg, Better.com CEO, increased its severance package for the 900 employees he fired over Zoom. His first offer was so low that it may have violated the WARN Act, a federal labor law. Photo credit: Better.com

Better.com Scrambles to Stop the Bleeding

The concession on severance pay might have eliminated one looming threat for Better, but the lender is still scrambling to recover from the PR disaster of CEO Vishal Garg’s Zoom call. 

On Tuesday, three executives resigned their posts at the company after the call went viral, specifically citing Garg’s divisive leadership style. 

“Anyone who is leaving right now, these are folks that have tried to make it work, and given their all to a company they believe in, but who ultimately get undermined by a CEO that doesn’t take advice from anyone and believes he’s always right,” an anonymous source told Insider this week.

What’s more, some of the 900 fired employees may still intend to file suit against the lender. At least one worker told Insider they were still in talks with law firms to file a class-action case. 

Better.com may have dodged one lawsuit with increased severance pay, but more may be looming.
Better.com may have dodged one lawsuit with its increased severance package, but more may be looming. Photo credit: Better.com

Insulting Zoom Call Haunts Company

The issues began for Better.com when its Zoom call went viral on YouTube and TikTok on Monday. 

In the insulting video, Garg spoke vaguely about how the “market has changed” before laying off 900 workers just before the holiday season. 

“This isn’t news that you’re going to want to hear […] If you’re on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately,” he said. 

The CEO told employees, just a week after receiving a $750 million cash infusion from investors, that the company can’t afford to keep them on the payroll. 

“This is the second time in my career I’m doing this and I do not want to do this,” he said. “The last time I did it, I cried.”