Explained: Is Twitter's Mass Layoff By Elon Musk Violating U.S. Law?

From firing Twitter¡¯s (ex) CEO Parag Agrawal and some of its top executives right after taking over the company, conducting mass layoffs, to asking some of the laid-off employees to come back, Elon Musk has been busy revamping Twitter since the past two weeks.

The San Francisco-based social media company¡¯s new owner, Elon Musk, has been on the receiving end of criticism for the sudden and mass layoffs of around 50% of Twitter¡¯s workforce.

Reuters

In fact, Twitter is already facing a proposed class action (lawsuit) claiming the layoffs are imminent and will violate U.S. and California laws if employees are not given advance notice or severance pay, as per a Reuters report.

What Does The US Law Require?

The federal Worker Adjustment and Retraining Notification (WARN) Act requires businesses with 100 or more employees to provide 60 days' notice before engaging in mass layoffs. The law defines mass layoffs as those affecting at least 500 employees during a 30-day period, or at least 50 employees if layoffs impact at least one-third of a company's workforce. As per the Reuters report, employers can provide workers with 60 days of severance pay in lieu of giving notice.

Penalties For Violating

An employer found to have violated the WARN Act can be ordered to give laid-off workers 60 days of back pay. The law also imposes penalties of $500 per violation per day. Comparable laws in California and other states reportedly impose similar penalties.

Also Read: Elon Musk's Top Investors For Twitter Takeover

What Has Elon Musk Led Twitter Been Accused Of?

Reuters

The lawsuit filed in San Francisco federal court last week claims that Twitter locked employees out of their accounts, signalling that they will soon lose their jobs. One of the five named plaintiffs, who is based in California, says he was terminated on November 1st without notice or severance pay.

As per the report, WARN filings provided by the Employment Development Department of the State of California state that Twitter did give notice that it would be cutting 93 staff at its office in Santa Monica, 106 staff in San Jose, and 784 staff in San Francisco. Each notice said the terminations were expected to begin on January 4.

The breakdown of staff showed that in San Francisco, the bulk of the workers laid off¡ª592 of the 784¡ªwere classified as professionals, with 147 first- and mid-level officials and managers, and the remainder were senior managers, sales workers, and administrative support. The breakdown for Santa Monica and San Jose showed a similar profile of workers.

Shannon Liss-Riordan, a lawyer for the plaintiffs, said that it appeared Twitter was making an effort to comply with the WARN Act by offering to pay some employees through Jan. 4. She said employees were told they would be presented with severance agreements requiring them to waive their ability to sue Twitter in exchange for a payout, as per a Reuters report.

She said she is also investigating "how Twitter chose employees for layoff and whether any discrimination or retaliation was involved."

Also Read: Amid Layoffs, Twitter Employees Told To Work 12 Hours A Day & 7 Days A Week To Meet Musk's Deadlines

Elon Musk¡¯s Tesla Sued For Similar Violations

Twitter isn't the first company under Elon Musk to be sued for violations.

His electric vehicle company, Tesla, was sued in Texas federal court in June for allegedly violating the WARN Act through an abrupt nationwide purge of its workforce, including 500 layoffs at a factory in Sparks, Nevada. Liss-Riordan also represents the workers in the Tesla case. Tesla has said it was merely "right-sizing" by firing poorly performing workers and not engaging in layoffs that required advance notice, as per the report.

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Last month, a federal judge reportedly said that Tesla workers must pursue their claims in private arbitration rather than court.

UN¡¯s Open Letter To Twitter Amid Mass Layoffs

Amidst the mass layoffs at Twitter, the U.N. High Commissioner for Human Rights, Volker T¨¹rk, recently issued an open letter to Elon Musk, the new owner of Twitter Inc, urging him to "ensure human rights are central to the management of Twitter".

T¨¹rk described Twitter¡¯s layoffs at the beginning of Musk¡¯s tenure as not "an encouraging start".

"Twitter is part of a global revolution that has transformed how we communicate," T¨¹rk said in the letter, as per the report, "But I write with concern and apprehension about our digital public square and Twitter's role in it."

"Like all companies, Twitter needs to understand the harms associated with its platform and take steps to address them," he added. "Respect for our shared human rights should set the guardrails for the platform's use and evolution."

"In short, I urge you to ensure human rights are central to the management of Twitter under your leadership," the High Commissioner said.

Last week's layoffs were announced after a week of chaos and uncertainty about Twitter's future under its new owner, Elon Musk, who is also the world's richest person.

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