(Bloomberg) -- A federal judge challenged Twitter Inc. over its refusal to tell the employees terminated in Elon Musk’s mass layoffs that there’s a class-action lawsuit on their behalf against the company.
Twitter wants the workers to sign away their legal rights as part of a severance pay agreement — without mentioning the existence of the suit filed on the eve of hundreds of layoffs in early November just after Musk took over as boss.
“Why not just do it, why is Twitter so reluctant to do this?” US District Judge James Donato asked during a hearing Thursday in San Francisco federal court. “There’s nothing to fear.”
The lawsuit, filed by a handful of workers, alleges the company failed to give employees the required 60 to 90 days notice about the mass layoffs and is shortchanging them on severance pay. Twitter faces separate claims that it retaliated against an employee who tried to organize a strike and that its layoffs disproportionately targeted female workers.
Donato questioned Twitter’s resistance to including in the severance agreements what he said should be a simple, single-page notice that “there is a lawsuit, period.”
After Musk bought the social media company for $44 billion, he fired half its workforce, asked some essential employees to return, rolled back its expansive work-from-home policy, and called on workers to sign a pledge to remain “extremely hardcore” at Twitter or quit.
Read More: Twitter Faces More Legal Fallout Over Worker Firings Under Musk
The most recent version of Twitter’s severance agreements include one month of base pay and a waiver it asks former workers to sign agreeing not to join lawsuits against the company, the company’s lawyer, Eric Meckley, told the judge. Twitter argues its former employees are bound by contractual agreements requiring them to resolve any disputes with the company in closed-door arbitration rather than in open court.
“It’s misleading to give people notice of a class-action that they can’t participate in,” Meckley told Donato.
Shannon Liss-Riordan, an employment lawyer who previously tangled with Musk over layoffs at Tesla Inc., his electric-car company, has filed four suits so far stemming from the billionaire’s takeover of Twitter. The case before Donato, she says, seeks to hold Twitter accountable for the severance agreements employees were promised before Musk’s acquisition.
Based on Twitter’s policies prior to the take-over, Liss-Riordan argues, former workers are entitled to at least two months’ base pay, and maybe more depending on the number of years they worked there.
Under the previous agreement they’re also supposed to get three months of equity vesting, health-care contributions, and bonuses, she said. “That could be a lot of money that people are being deprived of, that they thought they were going to get,” she said in an interview, referring to the equity.
She has asked Donato for an order requiring Twitter to add a notice of her lawsuit to its severance package. The judge agreed to allow Liss-Riordan to add former employees to her suit who opted out of arbitration agreements.
“People shouldn’t unwittingly be signing away their rights when they‘ve got cases that could adjudicate important claims for them — that could entitle them to much more pay than what Twitter says,” she said.
Musk is “doing this calculation of saying, ‘Oh, this will save us a lot of money and I think I can just get away with it,’” Liss-Riordan said, referring to the curtailed severance packages. “We’re here to say, no we’re going to hold him accountable.”
Donato on Thursday extended an order temporarily barring Twitter from issuing severance packages until he rules on Liss-Riordan’s request next week. The judge said if the company agreed to add notice about the lawsuit, that might make its waivers and severance packages more legally enforceable.
“You just believe in arbitration so strongly that you can’t stomach the idea of telling people there’s a lawsuit?” he said.
©2022 Bloomberg L.P.