After the official takeover of Twitter by Elon Musk, he fired no less than 3,500 Twitter staff. These ex-staff are now taking the company to court in different regions. Although Elon Musk did pay some sort of compensation to the former staff, some did not accept it. Some of the ex-staff even claim that what Musk is offering is illegal. Today, Elon Musk got an edge in one of the many legal cases that he has to deal with. Five sacked Twitter staff were forced to drop their class action lawsuit against the company. The judge asked them to submit individual claims for arbitration.
On Friday, U.S. District Judge James Donato ruled in Twitter's favour, saying the former employees' employment contracts contained signed arbitration agreements. The agreement states clearly that employees would initiate legal disputes against the company through arbitration rather than courts. It also includes a class action waiver.
“Twitter provided copies of the signed agreements, which were clear and conspicuous,” Donato wrote in the ruling.
Since Elon Musk took over Twitter in late October, the company has laid off thousands of employees. Musk has said the ex-staff will receive three months of severance pay. The suit alleges that Twitter repeatedly told staff before the acquisition that even under the billionaire's management, employees would still receive at least as much severance pay as the company had previously promised. This includes a two-month payout.
But many of the laid-off employees didn't get that much, all they got was a month's severance pay. The class-action lawsuit accuses Twitter of breaching its contract, saying it should have paid the fired employees two months of severance pay they had promised, as well as the two months of non-working wages they had already received, as Twitter worked to avoid violating the contract. The WARN Act also requires companies to issue a notice of mass layoffs.
Twitter staff signed important documents
Dispute resolution agreements provided to workers with employment contracts state that disputes, including those related to dismissal, must be “resolved only by final and binding arbitration by an arbitrator and not by a court or jury trial.”.
“You and the Company agree to initiate arbitration on an individual basis only and not on a class basis or on behalf of a private attorney general,” the agreement adds.
The dispute resolution agreement states that “arbitration is not a mandatory condition of employees' employment with the company” and says employees can sign a separate form to opt-out. Donato further stated, however, that copies of the dispute resolution agreements from 2017 to 2021 show that these agreements were signed by the five plaintiffs, “without the plaintiffs opting out.”
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The original five plaintiffs, who filed the lawsuit on Nov. 3, “have been called to individual arbitration,” Donato said. The other three plaintiffs who joined the complaint on Dec. 9 said they did not sign an arbitration agreement, Donato said, adding that they were therefore not affected by last Friday's ruling and that he would decide how to proceed with their complaints at a later date.
Twitter owes suppliers more than $390,000 in claims
A report from Canary Marketing, a marketing company with its HQ in San Francisco, USA, filed a lawsuit on January 6, In the lawsuit, the company claims that social media giant, Twitter has violated their contract and failed to pay for the service as required. The company is claiming $392,239.11 and this includes interest. Canary Marketing describes itself in the lawsuit as a multi-party marketing agency. According to the company's official website, Canary Marketing designs, packages and distributes branded goods for clients such as google, Slack, KFC and Sephora.
According to the lawsuit, Canary Marketing provided merchandise to Twitter from June 2020 to August 2022. The contract stipulates that Twitter will pay for the service within 60 days of receiving the invoice. But the invoices issued by Canary Marketing were not processed from September 2022 onwards, the lawsuit alleges. At the time of the lawsuit, Twitter had not paid for two other invoices, the company claims.
“Twitter appears to be interpreting the agreement as saying it has the right to decide whether to pay Canary Marketing's invoices,” the lawsuit adds.
Lawsuits against Twitter continue to rise
Twitter has been hit with many lawsuits in recent months for unpaid fees or rent. In fact, the company is also facing many legal actions from ex-staff.
Elon Musk has been on a cost cutting spree since taking charge of Twitter's highest office. The company had to lay off about half of the company's staff in his first week on the job. In the new year, Musk continued to explore how to cut costs. One wa Musk know how to cut costs is to sack staff, thus, the sacking continued. There are reports that Twitter has a new plan that will see more staff lose their jobs. The company already has plans in place to close many of its small offices outside the main offices in California, New York and London.
According to reports, Musk has stopped paying rent for offices, including the San Francisco headquarters. There is also a notice from Musk to staff asking them to stop paying some suppliers. According to another report, he is also considering not paying promised severance packages to fired staff.
In Singapore, Twitter had issues due to its overdue rent arrears that it did not pay. However, after some uproar, the company eventually paid the overdue rent. Twitter's other cost cutting measures include refusing to pay staff for their work and selling off office furniture and kitchen tools.