Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Explainer-Will Twitter layoffs violate U.S. law?

Stock Markets Nov 06, 2022 11:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. Elon Musk photo and Twitter logo are seen through magnifier in this illustration taken November 4, 2022. REUTERS/Dado Ruvic/Illustration 2/2
 
TSLA
+4.64%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Daniel Wiessner

(Reuters) - Twitter Inc (NYSE:TWTR) has begun laying off employees under its new owner, Elon Musk. The San Francisco-based social media giant on Friday started laying off staff, expected to number up to 3,700 people - half of its workforce, according to internal plans reviewed by Reuters last week. Twitter is already facing a proposed class action claiming the layoffs are imminent and will violate U.S. and California laws if employees are not given advance notice or severance pay.

WHAT DOES U.S. LAW REQUIRE?

The federal Worker Adjustment and Retraining Notification (WARN) Act requires businesses with 100 or more employees to provide 60 days' notice before engaging in mass layoffs. The law defines mass layoffs as those affecting at least 500 employees during a 30-day period, or at least 50 employees if layoffs impact at least one-third of a company's workforce. Employers can provide workers with 60 days of severance pay in lieu of giving notice.

WHAT ARE THE PENALTIES FOR VIOLATING THE WARN ACT?

An employer found to have violated the WARN Act can be ordered to give laid-off workers 60 days of back pay. The law also imposes penalties of $500 per violation per day. Comparable laws in California and other states impose similar penalties.

WHAT HAS TWITTER BEEN ACCUSED OF?

The lawsuit filed in San Francisco federal court late on Thursday claims Twitter locked employees out of their accounts on Thursday, signaling that they will soon lose their jobs. One of the five named plaintiffs, who is based in California, says he was terminated on Nov. 1 without notice or severance pay.

Twitter did not respond to a request for comment. Late on Friday, Musk tweeted that "everyone exited was offered three months of severance, which is 50% more than legally required."

According to WARN filings provided by the Employment Development Department of the State of California in response to a Reuters request, Twitter gave notice on Friday that it would be cutting 93 staff at its office in Santa Monica, 106 staff in San Jose, and 784 staff in San Francisco. Each notice said the terminations were expected to begin Jan. 4.

The breakdown of staff showed that in San Francisco, the bulk of workers laid off, 592 of the 784, were classified as professionals, with 147 first/mid-level officials and managers, the remainder being senior managers, sales workers and administrative support. The breakdown for Santa Monica and San Jose showed a similar profile of workers.

Shannon Liss-Riordan, a lawyer for the plaintiffs, said on Friday that it appeared Twitter was making an effort to comply with the WARN Act by offering to pay some employees through Jan. 4. She said employees were told they would be presented with severance agreements next week requiring them to waive their ability to sue Twitter in exchange for a payout.

Liss-Riordan said she is also investigating "how Twitter chose employees for layoff and whether any discrimination or retaliation was involved."

HAVE OTHER MUSK-RUN COMPANIES BEEN SUED UNDER THE WARN ACT?

Tesla (NASDAQ:TSLA) Inc was sued in Texas federal court in June for allegedly violating the WARN Act through an abrupt nationwide purge of its workforce, including 500 layoffs at a factory in Sparks, Nevada. Liss-Riordan also represents the workers in the Tesla case. Tesla has said it was merely "right-sizing" by firing poorly performing workers and not engaging in layoffs that required advance notice.

Last month, a federal judge said Tesla workers must pursue their claims in private arbitration rather than court. The same issue could arise in the lawsuit against Twitter, as more than half of private-sector U.S. workers have signed agreements to arbitrate employment-related legal disputes.

HAS THERE BEEN AN INCREASE IN WARN ACT LITIGATION?

Employers faced a spike in lawsuits brought under the WARN Act and state laws during the COVID-19 pandemic, as many businesses abruptly shuttered or terminated many of their employees. Enterprise Rent-A-Car, Hertz Corp, restaurant chain Hooters and Florida hotel operator Rosen Hotels and Resorts Inc all settled WARN Act lawsuits over pandemic-related layoffs. Rosen settled claims by 3,600 workers for $2.3 million and Enterprise agreed to pay $175,000 to nearly 1,000 workers. Hertz and Hooters paid undisclosed sums.

Explainer-Will Twitter layoffs violate U.S. law?
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Jan Buyle
Jan Buyle Nov 06, 2022 3:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I closed my Twitter account... don't like his disrespect for the empoyees..
Jeffrey Whittinghill
Jeffrey Whittinghill Nov 06, 2022 11:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Who cares ! Pay the 60 days pay and be gone liberal pos anti american commies
Roger Miller
Roger Miller Nov 06, 2022 11:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Biden administration will influence the Federal courts, DOJ to expand definition and application of the laws if they are not sufficient in order to gain political points and power.  Just as they are so obviously doing with President Trump. Why do these people deserve any severance or notice?  They saw the writing on the wall, and we have all heard of how little work many did, and how dysfunctional the environment was.  They are grifters dragging down the rest of the economy.
Warm Camp
Warm Camp Nov 06, 2022 11:23AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Much noise out of nothing. The employees and state have received required notices and severance has been offered.
Gus McCrae
Gus McCrae Nov 05, 2022 12:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Big FU Reuters! cry me a River. go F yussef
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email