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Lawsuits & Litigation

Twitter Responds to Mass Layoffs Lawsuit

— November 23, 2022

Twitter claims that the plaintiff employees signed contracts that require their disputes to be heard in arbitration rather than in court.

Twitter is pushing back against a lawsuit claiming that the social media company violated federal law by laying off thousands of workers, claiming that the complaint is baseless and should be addressed in arbitration.

According to Reuters, Twitter’s court filings on Monday marked the company’s first official response to the lawsuit.

The lawsuit, filed earlier this month, alleges that Twitter violated a federal law requiring that large companies provide at least 60 days’ notice before initiating large-scale layoffs.

“Twitter is now engaged in conducting mass layoffs without providing the required notice under the federal WARN Act,” the lawsuit states, referencing the Worker Adjustment and Retraining Notification Act that requires that large companies provide at least 60-day notice for facility closures and mass layoffs.

Twitter has reportedly laid off an estimated 3,700 employees—roughly half its workforce—since Elon Musk acquired the company in October.

A Twitter employee told NBC News that the company’s first move after the Musk acquisition was informing employees—by email—that many of their positions would be eliminated.

A 2013 image of Tesla and SpaceX founder and owner Elon Musk. Image via Flickr/user:heisenbergmedia. (CCA-BY-2.0).

“It’s total chaos, house melting down, everyone looking towards this email,” the employee told NBC.

Musk has since defended his decision, saying that Twitter is losing money and that layoffs are a practical necessity.

“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required,” Musk wrote on Twitter.

However, attorneys for the social media platform said that Twitter met its legal obligations by informing employees that their last day would be 4 January, 2023, well beyond the 60 days’ deadline.

Twitter also claims that the plaintiffs—mostly laid-off and soon-to-be-terminated workers—had signed contracts in which they agreed to resolve any employment-related conflicts through arbitration.

Arbitration, a form of alternative dispute resolution, in which disputes are presented before a third-party arbitrator agreed upon by both the plaintiff and defendant.

Companies typically prefer placing cases in arbitration, since it allows them to avoid protracted litigation and class-action claims.

However, some legal observers claim that arbitration often favors corporations, which have typically have far more resources at their disposal than individual claimants.

Shannon Liss-Riordan, an attorney or the plaintiffs in the Twitter claim, told Reuters that she is prepared to represent employees in arbitration if the case is dismissed from court.

“Twitter’s response to our motion is basically that employees are bound by arbitration agreements, so Twitter doesn’t have to worry about violating the law,” Liss-Riordan said. “Twitter is incorrect.”


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