OAKLAND, Calif. (CN) — Billionaire and new Twitter owner Elon Musk won a first round in federal court Friday when a judge granted Twitter’s motions to dismiss wrongful termination claims from employees fired last fall, ordering them to arbitration instead.
Just-fired Twitter employees slapped the social media platform with a federal class action this past November — claiming Musk’s plan to lay off 50% of Twitter's workforce violates federal and California worker protection laws.
Dmitry Borodaenko and Abhijit Mehta filed the putative class action claiming they are among many abruptly laid off — represented by attorney Shannon Liss-Riordan, who represented plaintiffs in a similar lawsuit over layoffs at Musk's Tesla in June 2022.
In the wake of completing the massive $44 billion purchase of Twitter last fall, Musk announced layoffs of thousands of Twitter employees across the U.S. Musk offered severances package on condition of waiving potential claims against the company. Musk claimed the layoffs were necessary due to a massive drop in revenue.
Some fired employees claimed in a separate class action, also represented by Liss-Riordan, 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. According to that class action, Tesla also 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.
The fired employees want to ensure that Twitter complies with the law and provide requisite notices or severance payments with anticipated layoffs. Liss-Riordan said that nearly 2,000 individual arbitrations have been filed.
In its Dec. 21 motions to dismiss and compel arbitration in Borodaenko's case, Twitter argues that the court lacks jurisdiction on discrimination claims. The company also claims that Borodaenko did not exhaust all administrative remedies before filing or give enough evidence of disability discrimination.
U.S. District Judge Haywood Gilliam Jr., in his nine-page order filed Friday, stayed Mehta’s claims since Mehta did not opt out and is compelled to arbitration.
The judge denied the motion to dismiss on Twitter’s argument that plaintiffs did not seek leave to file right-to-sue notices from the U.S. Equal Employment Opportunity Commission or the California Department of Fair Employment & Housing, or file them.
“Despite defendant’s urging, it was not 'sandbagged,' as it responded to plaintiff’s filing anyway,” Gilliam wrote.
But he agreed with Twitter that Borodaenko did not adequately show he was terminated because of his disability.
The original complaint said Musk declared that remote work would no longer be allowed, and that employees would have to work long hours at high intensity or resign. But Gilliam said that suggests employees were terminated because they refused to return to the office, not because of a disability. He said plaintiffs failed to plausibly plead a disparate impact claim, without proof that disabled employees resigned at higher rates than non-disabled colleagues.
The judge also dismissed the full class action claims, since the plaintiffs in question were laid off and therefore not in a similar situation as others in the putative class who resigned because of the new policies.
“The court notes that a growing number of courts (including this one) generally disfavor motions to strike, finding that they 'serve little useful purpose in modern federal practice, and are often wielded mainly to cause delay and inflict needless burdens on opposing parties,'” he said.
Gilliam ordered the parties to file a report within four months and alert him within 48 hours of completing arbitration. The plaintiffs get three weeks to file amended claims, ahead of a case management conference on June 20.
Liss-Riordan said the plaintiffs look forward to amending their claims with new evidence for Boradaenko’s disability discrimination claim.
“Elon Musk has shown his utter lack of regard for disabled employees through his words and conduct,” Liss-Riordan said. “We will pursue these claims of discrimination vigorously, along with our other seven class action lawsuits and nearly 2,000 arbitrations against Twitter, and intend to show the formerly richest man in the world that he is not above the law.”
Attorneys for Twitter did not respond to a request for comment before press time.
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