Elon Musk, who admitted to overpaying for Twitter, almost immediately fired the social media platform’s staff. In response, some of the axed employees want their day in court.
Within days of the acquisition, Musk laid off top executives and halved the company’s 7,500 employees. Soon after, he gave employees an ultimatum, asking them to commit to what Musk called “extremely hardcore” and “working long hours at high intensity” or to quit. The move sent more workers out the door.
These personnel changes prompted several lawsuits from former workers alleging that the moves violated workers’ rights because the company allegedly failed to provide timely accommodation for redundant workers or for disabled workers.
Musk, who also runs Tesla and SpaceX, may have exposed Twitter to serious legal liability that could cause financial damage to the company, two labor experts told ABC News. The experts were reluctant to comment on the details of the cases but said the former workers had legitimate grievances for the courts to adjudicate.
The combined lawsuits could cost Twitter “many millions of dollars,” Michael LeRoy, a professor of labor and employment relations at the University of Illinois, told ABC News.
However, resolving the court case could take more than five years, which would give the company leverage if it seeks settlements with former employees, LeRoy added.
Sharon Block, executive director of the Labor and Worklife Program at Harvard University Law School and a former member of the Obama administration, said the staffing actions demonstrated “reckless disregard for the welfare of workers.”
Twitter did not respond to a request for comment.
In a class action lawsuit, resigned workers allege the company failed to give the 60-day notice period required by federal law under the WARN Act, which obliges large companies to terminate mass layoffs, Shannon Liss-Riordan, the workers’ attorney , ABC News said.
Twitter plans to keep many but not all of the laid-off workers on the payroll for two months to comply with the law, Liss-Riordan said. However, the company does not intend to pay the full severance package beyond those months, as previously promised, she added.
In response to the lawsuit over court filings obtained by Reuters, Twitter told a San Francisco federal judge that recent allegations of violations of the law were “baseless,” noting that it intends to arbitrate the said allegations.
Stressing that all legal requirements for former employees have been met, the company revealed that laid-off workers were notified their last day on Twitter would be January 4, which is longer than the 60-day requirement under federal law.
The tech giant is responding to the recent class-action lawsuit filed by former employees over the statutory 60-day notice period before mass layoffs.
Twitter also said that in addition to creating confusion, the pending lawsuit has delayed severance payments, and the company has asked a judge to dismiss the lawsuit.
In a separate class action lawsuit — also led by Liss-Riordan — a disabled former employee is suing the company alleging that the ultimatum that workers were “extremely hardcore” forced disabled workers to quit because they met the elevated standard for the job could not perform work.
The federal labor law gives companies wide latitude to fire workers without reason under a measure called employment at will. However, companies face some restrictions on how redundancies are made or implemented, including non-discrimination laws and requirements that employees of some companies must be notified of large-scale redundancies.
“We fully understand that business leaders and owners can make decisions about how they think the business will best function going forward,” Liss-Riordan told ABC News. “But we have laws to protect workers and laws to protect workers who need to be fired.”
“If Elon Musk thinks cutting workers is in the best interest of Twitter and its shareholders, he has the right to do so,” she added. “But if he tries to violate workers’ rights, he has to reckon with resistance.”
LeRoy of the University of Illinois said the breakneck speed of Musk’s hiring decisions has placed his company on a precarious legal footing.
“Haste makes waste,” LeRoy said. “Haste terminations often have legal consequences.”
Still, the company could make arguments centered on exceptions in relevant laws, LeRoy said. For example, the federal law that requires large companies to give advance notice to mass layoffs excludes companies that experience financial difficulties, he added. “It adds a certain amount of ambiguity to the situation,” he said.
Additionally, the court cases could last for many years, giving Twitter the upper hand in fighting the lawsuits or seeking a favorable settlement, LeRoy said.
Liss-Riordan, the attorney overseeing some of the cases against Twitter, acknowledged the challenge that a potentially lengthy court process poses, but said the cases against Twitter could be resolved with relative ease.
“Cases can take a long time,” she said. “In that case, I’m confident that maybe we can resolve this sooner.”
“Paying laid-off workers what they’re owed should be Musk’s easiest current problem to solve,” she added.
Since taking over Twitter late last month, Musk has imposed major changes on the social media platform.
He overhauled the company’s Twitter Blue subscription product by allowing users access to verification through a monthly fee of $8, but halted the rollout after a spike in impersonations on the platform, including impersonations by Musk himself.
More recently, he restored former President Donald Trump’s account, reversing an earlier announcement that said decisions to restore important accounts would await the formation of a content moderation council. Trump was permanently suspended after January 6 “due to the risk of further incitement to violence.”
Musk, who acquired Twitter for $44 billion, is under pressure to increase the company’s profits. Earlier this month he said the company was losing $4 million every day.