Musk fired the employees and then forgot to give them promised severance pay package so his workers decided to sue him. However, US District Judge James Donato states that the workers must make their case in private arbitration instead, because they had signed an employment contract with Twitter.
According to the ruling, Twitter’s contract “expressly” states that arbitration isn’t mandatory, and provides an option for employees to opt out of the procedure. The judge says employees failed to opt out of arbitration, which would’ve given them a chance to settle things in court. Twitter’s contract also contained a class action waiver.
“Twitter provided signed copies of the agreements, and they are all clear and straightforward.” While five of the employees “are ordered to arbitration on an individual basis,” the judge will decide at a later date what to do with the three other workers who joined the suit in December and state that they opted out of the arbitration agreement.
The group of ex-Twitter employees first filed the class action suit in November and accused Twitter of not providing enough notice before they were laid off in violation of the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to provide 60 days of notice for company-wide layoffs. They later amended the complaint to include allegations that Twitter breached its contract by not providing the severance pay they’re owed.
Twitter CEO Elon Musk initially promised three months of severance pay when he first assumed ownership of the company, but many employees affected by Musk’s mass layoffs say they’ve only received one-month worth of pay in addition to the two months of non-working pay they also received in compliance with the WARN Act. The suit argues that employees should receive at least two months of pay (as was Twitter’s policy pre-Musk), along with non-working pay.
However, while most would see this as a win for Musk, the employees say that it is another costly backfire for the business genius. Shannon Liss-Riordan said the employees have filed 500 individual arbitration demands and counting.
There are still some areas where Twitter still has to answer claims in court, on top of the arbitration battles.