Just a month after new Twitter CEO Elon Musk oversaw mass layoffs, former Twitter employees have announced they are filing a lawsuit over the company’s layoff policies. At a press conference with their attorney Lisa Bloom, former employees Helen-Sage Lee, Adrian Trejo Nuñez and Amir Shevat alleged that the company’s handling of their layoffs constituted a breach of contract and a violation of California’s Worker Adjustment and Retraining Notification (WARN) Act.
It may be just a handful of former employees now, but Twitter could soon be swamped with similar cases and forced to pay multimillion-dollar legal fees. Rafael Nendel‑Flores, a California employment lawyer, says the legal strategy of filing multiple arbitrations, which is likely a way to get around the restrictions of a dispute resolution agreement, will increase the pressure on Twitter. “The arbitration costs alone can be huge,” he says.
That’s because employers, in this case Twitter, have to bear the costs of the arbitration process. And having hundreds or thousands of business at once can be a significant financial and administrative burden for a company already struggling with a massive loss of advertiser revenue. Each individual arbitration case can easily cost between $50,000 and $100,000, says Nendel-Flores. “That’s a significant point of pressure, I think — that Ms. Bloom and probably other plaintiffs’ attorneys are going to try to push through these individual arbitration cases.”
Like most Twitter employees, Lee and the others had signed their right to participate in a class action lawsuit when they took the job via a dispute resolution agreement that refers all legal complaints to arbitration. This meant that if they had a problem with the company, everyone would have to negotiate for themselves. For an employer, such a legal mechanism blocks huge class action lawsuits. But for Twitter, faced with dozens of disgruntled ex-employees, it could lead to death by a thousand cuts.
And Bloom’s customers aren’t alone. Last week, Akiva Cohen, an attorney representing another group of Twitter employees, notified the company that its customers, too, would initiate arbitration proceedings if the company did not “confirm unequivocally” that former employees would receive the full severance pay that Twitter promised them.
“Nobody really expects you to go into a work environment, especially a new job that you’re really excited about, thinking that one day you’re going to sue your employer or that your employer is going to treat you in a way that warrants action,” says Lee.
When Musk first announced the layoffs, another group of employees filed a preemptive lawsuit against Twitter alleging possible violations of the WARN Act, which requires companies to give employees 60 days’ notice of layoffs. In response, Twitter agreed to keep the laid-off workers on the payroll as inactive until January 4, but severance pay for laid-off workers remains unclear for now. Lee, Nuñez and Shevat claim that the severance pay the company offered them after it was bought differed from what they were promised before the takeover.
