The mass firings of Elon Musk on Twitter have arrived. Are they legal?
Elon Musk has started cleaning up Twitter, and the victims are expected to eventually include nearly half of the social media site’s workforce.
Twitter broke its silence on the long-running layoffs in a company-wide memo late Thursday, according to multiple major outlets. The memo didn’t say how many of Twitter’s 7,500 employees would lose their jobs, but it did say all affected workers would be notified Friday at noon EST.
Legal experts told Grid that this sudden and dramatic overhaul of Twitter’s workforce by Musk — a billionaire who often appears to flout or ignore the rules — could violate federal and California labor laws, given that the Twitter’s headquarters are in San Francisco. These laws require companies planning mass layoffs to provide adequate notice, typically 60 days; Musk’s purchase of Twitter became official a week ago, on October 28.
Courts may frown on any attempt by Twitter to terminate large numbers of employees “for cause” (generally defined as poor judgment, violation of company policy or other wrongdoing) to circumvent labor protections.
Musk has used this tactic before on former senior Twitter executives. Hours after taking control last week, the billionaire swiftly ousted CEO Parag Agrawal, chief financial officer Ned Segal, general counsel Sean Edgett and head of legal, trust and security policy Vijaya Gadde . It quickly emerged that he fired them for cause, which would allow him to potentially avoid doling out around $122 million in “golden parachutes” to executives.
“I looked at some of the language in the executive agreements. It’s totally unfounded [Musk] seek termination with cause,” said Adam Badawi, a law professor at the University of California, Berkeley. “To be dismissed for just cause, the circumstances must be extreme, it must be a misdemeanor or someone has done something illegal. Things like differences of opinion or “We tried to do things one way and it didn’t work” – that’s not the right basis to fire someone for cause.
He added: “I expect the leaders to sue.”
Experts said Musk could try to prevent any lawsuits from lower-level employees by offering them separation agreements that would compensate them if they waived their right to challenge Twitter’s action in court. It is not clear if Twitter follows this strategy.
But a group of Twitter employees has reportedly already filed a class action lawsuit, alleging the company violates federal labor laws.
Duty to warn
The main labor laws at play include both the California and federal versions of the Warn Act, both of which include provisions governing how all but the smallest companies conduct layoffs.
Federal Warn law requires companies that plan to lay off 50 or more workers at a site to give those employees 60 days notice and notify state and local officials. It applies to businesses with 100 or more full-time employees and allows only a handful of exceptions: natural disaster, unforeseeable business circumstances or failing business.
None of this seems to apply in the case of Twitter.
Sanctions for violations may result in the payment by the employer of two months of severance pay to affected employees.
Cal-Warn is the state equivalent, and that and federal law provide co-protection. It takes effect at a lower size threshold — 75 full-time employees — and allows for civil penalties of $500 for each day an employer breaks the law, with up to 60 days of back pay for employees.
On Blind, an anonymous social networking site for tech workers, a Twitter employee posted about the downsides of working on Twitter right now: “The absolute and rapid destruction of a caring and humanity makes the Tweeps feel like they’ve lost our family.”
Badawi said it seems odd that Musk would immediately subject Twitter to the risk of litigation over personnel changes, particularly regarding the site’s former senior executives. Musk needed the cooperation of Agrawal, the former CEO, to complete the merger. Golden parachutes of the type that Musk is trying to avoid paying for are intended to facilitate this kind of cooperation and facilitate the change of leaders.
“I don’t quite understand because that means any CEO of any company that they want to buy in the future, the executives are going to say, ‘Well, aren’t you just going to try to sue us after it’s over? Badawi said. “So I find that a little perplexing.”
Content moderation issues
Groups that met with Musk to discuss content moderation practices earlier this week are also sounding the alarm over potential layoffs, saying they will jeopardize advertisers’ brand safeguards and content moderation standards. . The groups, which include Media Matters, Free Press, Accountable, Color of Change, GLAAD and Voto Latino, are asking Twitter’s biggest advertisers to halt ad purchases on the platform.
Musk previously said the site would not be a “free hellscape,” but in a letter to CEOs and senior executives of Twitter’s top 20 advertisers, which include companies like Apple and Verizon, the more than 45 advocacy groups civil rights expressed skepticism.
“[Musk] threatened to significantly reduce the number of employees, putting those responsible for maintaining community standards and protecting user safety first on the chopping block,” the groups said in the letter. “Musk also publicly supported the idea of restoring the accounts of prominent figures whom Twitter had suspended for inciting and glorifying political violence, spreading election and COVID-related misinformation, and abusing people based on their race, ethnic origin, national origin, sexual orientation, gender. , gender identity, religious affiliation, age or disability”.
The letter asks the companies to publicly commit to ceasing advertising if Musk “follows through on his plans to undermine brand safety and community standards, including content moderation.”
Thanks to Lillian Barkley for writing this article.