Elon Musk, who admitted that he paid too much for Twitter, almost immediately cut workers at the social media platform. In response, some of the fired employees want their day in court.
Within days of the acquisition, Musk fired top executives and cut the company’s 7,500-person workforce in half. Soon after, he issued an ultimatum to employees, asking them to commit to being, in Musk’s words, “extremely hardcore” and “working long hours at high intensity” or quit. The move sent more workers out the door.
These personnel changes prompted several lawsuits from former workers who claimed that the moves violated workers’ rights because the company allegedly did not provide ample notice for laid-off workers or accommodations for disabled employees.
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 have legitimate grievances that the courts will have to assess.
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, the legal action could take more than five years to resolve, giving the company leverage if it were to pursue 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 moves show “reckless disregard for workers’ well-being.”
Twitter did not respond to a request for comment.
In one lawsuit, laid-off workers claim the company failed to provide the 60-day notice of layoffs required by federal law under the WARN Act, which mandates that large businesses give notice when they face a mass layoff undertake, Shannon Liss-Riordan, the lawyer for the workers, told ABC News.
Twitter plans to keep many, but not all, of the laid-off workers on the payroll for two months as a way to comply with the law, Liss-Riordan said. However, the company does not intend to pay full severance pay beyond those months as previously promised, she added.
In response to the lawsuit via court filings obtained by Reuters, Twitter told a federal judge in San Francisco that the recent claims of legal violations are “baseless” and noted that it intends to send the said claims to arbitration.
The company stressed that all legal requirements to former employees had been met, revealing that laid-off workers were told their last day at Twitter would be Jan. 4, which is over the 60-day requirement under federal law.
The tech giant is responding to the recent class-action lawsuit previously filed by former employees over the 60-day notice required by law before proceeding with mass layoffs.
Twitter also said the pending lawsuit not only caused confusion but also delayed severance payments and the company asked a judge to dismiss the lawsuit.
In a separate class action lawsuit – also overseen by Liss-Riordan – a disabled former employee is suing the company over allegations that the “extremely hardcore” ultimatum forced disabled workers to resign for not meeting the increased standard for work performance could not be met. .
Federal labor law gives companies wide latitude to terminate workers without explanation under a measure called at-will employment. But businesses face some restrictions on the type or execution of layoffs, including prohibitions on discrimination and requirements that employees at some firms be warned before large layoffs.
“We completely understand that business leaders and owners of companies can make decisions about how they think the company will function best going forward,” Liss-Riordan told ABC News. “But we do have laws in place to protect workers and laws to protect workers who are subject to layoffs.”
“If Elon Musk thinks it’s best for Twitter and its shareholders to cut workers, he’s within his rights to do so,” she added. “But if he tries to violate workers’ rights, he should expect backlash.”
LeRoy, of the University of Illinois, said the breakneck speed of Musk’s personnel decisions put his company on uncertain legal ground.
“Hare makes a mess,” LeRoy said. “Hasty terminations often have legal consequences.”
Still, the company could make arguments focused on exemptions in relevant law, LeRoy said. For example, the federal statute that mandates large companies to provide notice before mass layoffs excludes companies experiencing financial hardship, he added. “It adds some ambiguity to the situation,” he said.
Additionally, the legal proceedings could last many years, giving Twitter the upper hand as it fights the lawsuits or pursues a favorable settlement, LeRoy said.
Liss-Riordan, the lawyer overseeing some of the cases against Twitter, acknowledged the challenge posed by a potentially lengthy legal process, but said the cases against Twitter could be resolved with relative ease.
“Things can take a long time,” she said. “In this case, I’m hopeful that we might be able to resolve it sooner.”
“Paying laid-off workers what they’re owed should be the easiest of Musk’s current problems to address,” she added.
Since acquiring Twitter late last month, Musk has introduced major changes to the social media platform.
He revamped the company’s subscription product Twitter Blue by allowing users to access verification through an $8 monthly fee, but halted the rollout after an increase in impersonators on the platform, including impersonators of Musk himself .
More recently, he reinstated former President Donald Trump’s account, reversing an earlier announcement that said major decisions on account reinstatement would await the establishment of a content moderation board. Trump was permanently suspended “due to the risk of further inciting violence” in the wake of January 6.
Musk, who acquired Twitter for $44 billion, is facing pressure to boost the company’s profits. Earlier this month, he said the company was losing $4 million every day.