Under Elon Musk’s ownership, Twitter Inc. began laying off staff. As many as 3,700 employees, half of its workforce, were laid off Friday by the San Francisco-based social media company. A class action lawsuit has already been filed against Twitter on the grounds that the impending layoffs will be illegal under US and California law if employees do not receive early warning or severance pay.
What does US law say?
Companies with 100 or more employees are required by the federal Worker Adjustment and Retraining Act (WARN) to give 60 days notice before making mass layoffs. According to the legislation, collective dismissals are those that affect at least 500 workers in the course of 30 days, or at least 50 workers if the dismissals affect at least one third of a company’s employment. Instead of giving notice, employers can offer 60 days of severance pay to employees.
Violations of the Warn Act are subject to what penalties?
If an employer is determined to have violated the WARN Act, they may be required to pay terminated employees 60 days back wages. Additionally, there are fines of $500 per day of violation under the legislation. Similar penalties are imposed by comparable legislation in California and other states.
Accusations against Twitter
According to the lawsuit, which was filed Thursday night in federal court in San Francisco, Twitter locked its employees’ accounts that day, indicating they would soon lose their jobs. A California-based plaintiff who is one of five listed plaintiffs claims he was fired Nov. 1 without warning or severance pay.
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A plaintiffs attorney named Shannon Liss-Riordan said Friday that it appeared Twitter was trying to comply with the WARN Act by planning to pay some employees through Jan. 4. She said staff members were told they would receive redundancy papers. next week, forcing them to drop their lawsuit against Twitter in exchange for a settlement.
Was the warning act used to sue other musk-led companies?
Tesla Inc. was sued in Texas federal court in June for allegedly violating WARN law by abruptly laying off 500 workers from a factory in Sparks, Nevada, among other locations across the country. In the Tesla case, Liss-Riordan also represents the employees. Tesla claimed that by cutting underperforming employees and waiving layoffs that required notice, it was simply a “size adjustment.”
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A federal judge ruled last month that Tesla employees should pursue their claims through private arbitration instead of going to court. While more than half of American private sector workers have signed agreements to arbitrate employment-related legal issues, the same issue could arise in the case against Twitter.
(With agency contributions)
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