Elon Musk’s X Corp. is said to have entered into discussions for a settlement regarding arbitration claims from approximately 2,000 employees who were laid off after Musk’s acquisition of Twitter in October 2022. In a memo to clients quoted in a recent Bloomberg article, attorney Shannon Liss-Riordan stated, “After 10 months of pressing them in every direction, we have succeeded in getting Twitter to the table. Twitter wants to mediate with us in a global attempt to settle all claims we have filed.”
Bloomberg reported having acquired the Liss-Riordan memo through a former Twitter employee. According to the memo, private negotiations with a mediator are slated for December 1 and December 2. “X is complying with a court order to mediate, a person familiar with the matter said, asking not to be identified discussing private information,” noted an individual familiar with the matter while requesting anonymity when discussing sensitive details, as per Bloomberg.
An attorney representing X Corp. stated in a court filing on August 28 that “Twitter has received more than 2,200 individual demands for arbitration.” The volume of cases could lead to filing fees alone, totalling approximately $3.5 million, as per CNBC. X has sought to avoid covering the full arbitration cost, contending that “arbitration costs be apportioned equally between the Parties for any arbitrations pending in jurisdictions where fee-sharing is lawful.”
Legal Battles and Allegations Involving Twitter and Arbitration Costs
A mediation agreement was reached a few months following claims that Twitter declined to cover the expenses for arbitration despite compelling former employees to opt for arbitration instead of lawsuits. Attorney Shannon Liss-Riordan has initiated multiple class action suits representing former Twitter employees and vendors. One of these legal actions was on behalf of vendors who asserted that Musk had neglected to settle the company’s invoices.
In a lawsuit filed in November 2022, it was alleged that Twitter, which had recently undergone a name change to “X,” had violated both the federal and California Worker Adjustment and Retraining Notification (WARN) Acts. These laws stipulate a requirement of a 60-day prior written notice before a substantial layoff. The legal complaint sought financial compensation, contending that the laid-off employees were not provided with severance pay or the mandatory notice period.
In January 2023, a federal judge approved Twitter’s request to compel the plaintiffs into arbitration due to their failure to opt out of the company’s arbitration agreement. Even though some former employees chose not to participate in Twitter’s arbitration process and proceeded with the class action, Liss-Riordan initiated numerous arbitration cases on behalf of individuals who were laid off from Twitter.
Then, in July, Liss-Riordan brought legal action, alleging that Twitter did not fulfil its obligation to cover the costs of arbitration despite insisting earlier that ex-employees handle their claims through arbitration rather than litigation. The lawsuit was filed in the US District Court for the Northern District of California and stated, “Twitter has refused to engage in arbitration—despite having compelled employees to arbitrate their claims.”
Twitter’s Arbitration Disputes and Grievances against X
The lawsuit claimed, “Approximately 2,000 of Twitter’s former employees have attempted to pursue arbitration claims against the company, following Twitter’s successfully moving to compel arbitration in several federal class action cases in court against it.”
In accordance with the rules of Judicial Arbitration and Mediation Services, employers are typically responsible for covering arbitration fees. However, in a notable move on June 2, Musk’s company proposed a different arrangement, suggesting that all arbitration fees be divided equally among the involved parties, as stated in the lawsuit. Additionally, on June 28, Twitter said it would decline to proceed with arbitrations in most states beyond California. The company provided a list of 891 arbitrations where it stated its refusal to proceed, as mentioned in the lawsuit.
Allegations against X encompass various grievances, including the failure to provide laid-off employees with promised severance payments, discriminatory practices based on factors such as sex, race, age, and disability, non-payment of agreed-upon bonuses, violations of the WARN Act (Family and Medical Leave Act), FMLA violations, and other transgressions, as outlined in the lawsuit.
In a recent statement quoted by Bloomberg, Liss-Riordan expressed pride in representing nearly 2,000 former Twitter employees. These representations involve both individual arbitrations and over a dozen class action lawsuits in court. The goal is to diligently work towards reclaiming the rightful dues for these individuals.