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Elon Musk’s Twitter sued over massive layoff plan

Federal and California law requires large companies to warn employees and the Employment Development Department 60 days before mass layoffs commence.

SAN FRANCISCO (CN) — Just-fired Twitter employees slapped the social media platform with a federal class action late Thursday, claiming new owner Elon Musk’s plan to lay off 50% of Twitter's workforce violates federal and California worker protection laws.

Five former Twitter employees claim they are among many abruptly laid off Thursday with more layoffs expected Friday. They are represented by attorney Shannon Liss-Riordan in suing Twitter Inc. “preemptively” on the eve of mass layoffs by Musk. Liss-Riordan represents plaintiffs in a similar lawsuit against Musk's Tesla over layoffs there this past June.

One of the lead plaintiffs says he was laid off Nov. 1, while three others were locked out of the Twitter accounts Thursday. Employees have been told they will receive a severance package on condition they waive potential claims against the company.

Musk announced layoffs of thousands of Twitter employees across the U.S., with many former employees sharing the news that they had been laid off by Friday morning.

“Honestly happy to be laid off but the veil of Elon Musk is pierced," newly laid off employee Kushal Dave said via his personal account Thursday night. "As messy as Twitter was pre-Elon, it is a veritable clowntown of politics and toadyism and psychological abuse now. Afraid to get in my Tesla with what I learned this week.” 

Musk claims the layoffs are necessary due to a massive drop in Twitter revenue, tweeting Friday that advertisers are fleeing the company. 

“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists,” Musk said. “Extremely messed up! They’re trying to destroy free speech in America.”

But Musk’s promises to change content moderation practices — made before sealing the colossal $44 billion purchase of the social media platform — have left many media and communications experts wary for the company’s future. Reuters reported internal documents suggested advertisers were concerned about the website “because of the growth of crypto and gambling content” and a major decline in users who drive the most engagement.

Musk started firing top executives on Oct. 28, including Twitter's trust and safety policy chief and the team that worked on algorithmic transparency and ethics.

The fired employees say in their class action that the terminations violate the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires at least 60 days of advance notice before large companies can initiate mass layoffs. California — where Twitter is headquartered at present — has similar requirements, and the plaintiffs say the state's Employment Development Department has not received notice of a mass layoff from Twitter.

According to the class action, Tesla also recently engaged in mass layoffs without notice and attempted to obtain releases from laid-off employees without informing them of their rights in exchange for severance pay of one to two weeks of salary. A federal judge found Tesla's actions "misleading because [the separation agreements] fail to inform potential class members of this lawsuit and the rights that they are potentially giving up under the WARN Act.”

The laid-off Twitter employees think the same thing will happen here.

“Plaintiffs here are reasonably concerned that, absent court intervention, Twitter will engage in similar behavior and seek releases from laid off employees without informing them of their rights or the pendency of this case,” they say in the complaint. They want to ensure that Twitter comply with the law and provide the requisite notice or severance payment in connection with the anticipated layoffs and that it not solicit releases of claims of any employees without informing them of their right to pursue their claims under the WARN Act. 

The plaintiffs seek immediate injunctive relief, payment of compensation including owed expenses and wages and a declaratory judgment on behalf of all employees to preclude Twitter from circumventing the requirements of the WARN Act. 

Neither Liss-Riordan nor a Twitter spokesperson responded to requests for comment by press time.

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