Twitter has begun shedding staff underneath its new proprietor, Elon Musk. The San Francisco-based social media big is anticipated to terminate as much as 3,700 folks — half of its workforce — on Friday, in response to inner plans reviewed by Reuters this week. Twitter is already going through a proposed class motion claiming the layoffs are imminent and can violate US and California legal guidelines if staff should not given advance discover or severance pay.

What does US legislation require?

The federal Worker Adjustment and Retraining Notification (WARN) Act requires companies with 100 or extra staff to offer 60 days’ discover earlier than participating in mass layoffs. The legislation defines mass layoffs as these affecting at the very least 500 staff throughout a 30-day interval, or at the very least 50 staff if layoffs affect at the very least one-third of an organization’s workforce. Employers can present staff with 60 days of severance pay in lieu of giving discover.

What are the penalties for violating the WARN Act?

An employer discovered to have violated the WARN Act could be ordered to present laid-off staff 60 days of again pay. The legislation additionally imposes penalties of $500 (almost Rs. 41,000) per violation per day. Comparable legal guidelines in California and different states impose comparable penalties.

What has Twitter been accused of?

The lawsuit filed in San Francisco federal court docket late on Thursday claims Twitter locked staff out of their accounts on Thursday, signaling that they’ll quickly lose their jobs. One of the 5 named plaintiffs, who relies in California, says he was terminated on November 1 with out discover or severance pay. It was not clear if Twitter is paying severance to staff who lose their jobs. Twitter didn’t instantly reply to a request for remark.

The lawsuit claims the layoffs violate the WARN Act and an analogous California legislation. The plaintiffs say they’re involved that Twitter will ask staff focused for layoffs to signal releases waiving their capacity to sue in alternate for modest severance pay.

Have different Elon Musk-run corporations been sued underneath the WARN Act?

Tesla was sued in Texas federal court docket in June for allegedly violating the WARN Act by means of an abrupt nationwide purge of its workforce, together with 500 layoffs at a manufacturing facility in Sparks, Nevada. The legislation agency behind that case, Boston-based Lichten & Liss-Riordan, additionally represents the Twitter staff who sued on Thursday. The agency didn’t instantly reply to a request for remark. Tesla has stated it was merely “right-sizing” by firing poorly performing staff and never participating in layoffs that required advance discover.

Last month, a federal choose stated Tesla staff should pursue their claims in non-public arbitration relatively than court docket. The similar subject may come up within the lawsuit in opposition to Twitter, as greater than half of private-sector US staff have signed agreements to arbitrate employment-related authorized disputes.

Has there been a rise in WARN Act litigation?

Employers confronted a spike in lawsuits introduced underneath the WARN Act and state legal guidelines in the course of the COVID-19 pandemic, as many companies abruptly shuttered or terminated lots of their staff. Enterprise Rent-A-Car, Hertz Corp, restaurant chain Hooters and Florida resort operator Rosen Hotels and Resorts all settled WARN Act lawsuits over pandemic-related layoffs. Rosen settled claims by 3,600 staff for $2.3 million (almost Rs. 18 crore) and Enterprise agreed to pay $175,000 (almost Rs. 1.5 crore) to almost 1,000 staff. Hertz and Hooters paid undisclosed sums.

© Thomson Reuters 2022