Brittany Gates

Reporting video games and tech news from an entrepreneur angle

Employees Sue Twitter For Illegal Layoffs

employees sue twitter for illegal layoffs
Twitter employees filed a federal lawsuit against Twitter on Thursday claiming the company didn't comply with the WARN Act.

Employees sue Twitter for illegal layoffs according to a new report from Yahoo Finance. The employees filed the federal lawsuit on Thursday claiming the company violated both federal and state employment laws. With the rumors of layoffs circulating all week people speculated employees may file a lawsuit if Elon Musk didn’t comply to various employment laws.

Employees Sue Twitter For Illegal Layoffs: The Details

Employees from the San Francisco, CA and Cambridge, MA offices want the California district court to grant a class-action status to their suit. One employee claims job loss on November 1st.

The employees claim Twitter and its new owner, Elon Musk, didn’t comply with the federal Work Adjustment and Retraining Notification (WARN) Act. They also say the company didn’t follow California’s version of the WARN Act.

How does the WARN Act affect both employers and employees? Private for-profit company that have at least 100 full-time workers planning to do a mass layoff must give their employees a 60-day notice. A mass layoff is one affecting at least 50 employees at at worksite, or a third of the worksite’s total workforce. This act affects larger employers (those with at least 500 employees at a single worksite) who perform mass layoffs within a 90-day period.

However, companies do not have to comply with the WARN Act if there are unforeseen circumstances, or if the company is about to fail. This could be the excuse Elon Musk may use in court. It’s widely know that Twitter hasn’t been profitable for over a year now, and the former management planned layoffs in 2023. So the new owner could argue he had to layoff employees quickly to save the company.

Why Would Twitter Take This Risky Action?

Why would Twitter take this risky action of laying off a large number of employees, and possibly break the WARN Act? Because the penalties for breaking the act aren’t that bad.

If Twitter is guilty of not complying with the WARN the company has to pay each employee’s back pay for a maximum of 60 days. California adds an additional penalty of $500 per day per employee, and the company has to pay for the employee’s medical expenses from losing the company health insurance.

It’s possible Elon Musk will pay these penalties because he factored those into the cost of purchasing the company. His inner circle has been at Twitter offices all this week talking with Twitter management regarding layoffs. From my experience working with executives and Human Resources, companies calculate how much breaking an employment law or act will cost the company. If the penalties are less than following the law or act then many companies will pay it. Especially if those companies can save more money on payroll and benefits quickly.

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