2022 is the year of mass corporate layoffs. Although the antics of Elon Musk following his $44 billion acquisition of Twitter have captured the media’s attention, Twitter is not the only major corporation to fire thousands of employees amid recession fears. Meta, Facebook’s parent company, is laying off more than 11,000 workers. Entertainment giants Warner Bros. Discovery, Paramount Global, and Disney have all begun shedding jobs, if not entire divisions (or, in the case of Disney, the CEO). Terminated workers at several of these companies have begun to fight back with allegations of labor law violations.
On November 3, Twitter Inc. was hit with a lawsuit brought by former employees alleging violations of California’s Worker Adjustment and Retraining Notification Act (WARN Act) and the federal WARN Act. The complaint asserts the company failed to provide proper notice in advance of ongoing layoffs, as required by state and federal law. The case against Twitter follows similar claims levied against Tesla Inc. after the automaker engaged in its own round of layoffs over the summer.
The state and federal WARN Acts impose certain obligations on employers planning to engage in mass layoffs. The federal law applies to employers with at least 100 employees, while California’s WARN Act applies to employers with at least 75 employees. Twitter, of course, satisfies the requirements for both. Both laws require employers to give at least 60 days’ formal notice in advance of plant closures or layoffs affecting a sufficient number of employees.
According to the complaint against Twitter, the company is in the midst of laying off around 3,700 employees, representing roughly 50 percent of its total workforce. Terminating that many employees well exceeds the minimum threshold for triggering the notice requirements under either the federal or California state WARN Acts.
The named plaintiffs are five employees who have already been terminated by Twitter, one allegedly without even an offer of severance pay. They seek to represent a proposed class of all Twitter employees in the United States that are laid off without proper notice, as well as a class of laid-off California employees. The complaint seeks to prevent Twitter from engaging in further layoffs without proper notice as well as to prevent the company from requesting that employees waive their federal or California WARN Act rights. Successful WARN Act plaintiffs can also obtain back pay and benefits for the period of the violation, up to 60 days, as well as civil penalties for each day of the violation.
The case mirrors allegations brought against Tesla in June. That putative class action was brought to a halt, however, in favor of individual arbitration. Tesla successfully argued that the named plaintiffs, as well as all members of the putative class, signed contracts including binding arbitration agreements. Those agreements require the signatories to resolve legal disputes via private, individual arbitration, rather than through collective action lawsuits. The complaint lodged against Twitter does not address whether there are similar arbitration clauses that might affect the proposed class action.
