SACRAMENTO, Calif. (Legal Newsline)--Title firm Mercury Cos. has agreed to pay $4.29 million in back wages for 633 employees who the company abruptly laid off in 2008, California officials said.

When Denver-based Mercury's affiliates stopped operating in the Golden State the company failed to pay workers wages, accrued vacation benefits, commissions, expenses and owed notary fees.

"In this case, a company closed without providing the proper notification and without paying final wages as required by law and was found to owe over $4 million in back wages," said state Labor Commissioner Angela Bradstreet, an appointee of Republican Gov. Arnold Schwarzenegger.

Officials also said $125,000 in employee 401(k) account contributions will be returned to former Mercury workers, under the terms of a settlement to a lawsuit that was filed in Alameda County Superior Court.

The company's California subsidiaries included Financial Title Co., Lenders First Choice Title Co. and Lenders Choice Title Co.

Among other things, state officials contended in their lawsuit that the company failed to provide a 60-day notice of a mass layoff, in violation of California's Worker Adjustment and Retraining Notification Act.

"This settlement sends a strong message to businesses that they can't avoid their mandatory obligations to employees and avoid the WARN act by filing for bankruptcy," Bradstreet said.

Mercury filed for federal bankruptcy protection in October 2008 in Denver. The settlement was approved by U.S. Bankruptcy Court Judge Michael Romero in Colorado.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.