X Corp, the social media giant formerly known as Twitter, is embroiled in a legal quagmire as it faces 2,200 arbitration cases from former employees, with filing fees that could exceed $3.5 million.
CNBC reports that X Corp, which recently rebranded from Twitter following Elon Musk’s takeover, is grappling with a surge of arbitration cases filed by ex-employees. These cases have come to light after significant changes were made in the company, including a massive layoff in staff numbers. The filing fees alone for this volume of cases could amount to $3.5 million.
Elon Musk’s Halloween costume (Taylor Hill /Getty)
The arbitration figures were disclosed in a recent court filing on Monday, as part of a lawsuit in a district court in Delaware. The case, known as Chris Woodfield v. Twitter, X Corp. and Elon Musk, has been filed by a former senior staff network engineer who alleges that the company failed to pay his severance and delayed alternative dispute resolution by not covering the necessary fees.
The company’s legal team has countered these allegations by stating that Twitter/X did not mandate employees to resolve any issues through arbitration. Therefore, they argue, the company should not be responsible for the larger portion of the filing fees.
That claim may be dubious given recent court rulings. In one lawsuit by former Twitter/X employees, the court found that they could not sue Elon Musk’s company due to arbitration agreements they had signed:
According to the dispute-resolution agreements provided to the employees with their employment contracts, all disputes, including those involving termination, must be “resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial.” The agreements further state: “You and the company agree to bring any dispute in arbitration on an individual basis only, and not on a class, collective, or private attorney general representative action basis.”
The dispute-resolution agreements state that arbitration is not a requirement for employment with the company and that employees may opt out by signing a different form. The five plaintiffs signed the dispute-resolution agreements, according to copies from 2017 to 2021, and Donato further claimed that “plaintiffs did not opt out.” All five initial plaintiffs who filed a complaint on November 3 “are ordered to arbitration on an individual basis,” Donato stated.
A lawyer involved in that lawsuit reportedly sent out more than 500 arbitration requests to former employees, saying: “Mass arbitrations are incredibly costly for companies to defend and many employers have found themselves sorry about what they wished for when they insisted that employees would have to pursue their claims one by one.”
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan