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Elon Musk's Twitter Facing Class Action Lawsuit Over Massive Layoffs

  • Elon Musk's decision to layoff 3,700 employees led to a class-action lawsuit being filed against Twitter. 

  • As per the lawsuit filed in federal court in San Francisco, Twitter employees were not given prior warning and were informed about the layoffs. 

  • Employees claim Twitter broke federal and California laws.

04-Nov-2022 By: Sudeep Saxena
Elon Musk's Twitter

On November 4, an American media outlet reported that a class action lawsuit had been filed against Elon Musk's proposal to layoff half of the Twitter workforce. 

The lawsuit accuses Twitter of violating the Worker Adjustment and Retraining Notification Act (WARN). The Worker Adjustment and Retraining Notification Act prohibits large companies from mass layoffs without giving at least 60 days advance notice.

The WARN Act applies to all businesses with at least 75 employees. It mandates employers to give employees 60 days advance notice in the event of mass layoffs. Employers who violate the act must pay penalties, employee compensation, lost medical and other benefits, and other expenses.

Twitter is now engaging in mass layoffs without providing the requisite notification under the federal WARN Act.

The employees' claim is being addressed by attorney Shannon Liss-Riordan. She filed a similar lawsuit against Tesla after Elon Musk laid off around 10% of its staff.

Furthermore, the lawsuit requests the court to issue an order requiring Twitter to comply with the Worker Adjustment and Retraining Notification Act. It also requests that the court prohibit the company from requiring or forcing employees to sign forms to withdraw from litigation.

Those who continue to work at Twitter will be notified in their work email today. However, those on the layoff list will receive an email to their personal address.

Some Twitter employees are eager to leave the firm after Elon Musk takes charge. They believe the work culture is now toxic and will leave the firm with their severance package.

Elon Musk has fired some executives, including CEO Parag Agrawal, and there have been indications of further layoffs in the coming days.

A probe by U.S. Treasury

The US Treasury Department is also investigating whether it has jurisdiction to probe Elon Musk's $44 billion takeover of Twitter. Senator Chris Murphy has asked the Committee on Foreign Investment in the United States (CFIUS) to investigate the involvement of non-US entities, particularly Saudi Arabia and Qatar, in national security matters.

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