Five fired Twitter employees were forced to drop their class-action lawsuit against the company after a judge required them to file individual claims for arbitration, the company said early Jan. 17.
On Friday, U.S. District Judge James Donato ruled in favor of Twitter, saying the former employees’ employment contracts included signed arbitration agreements that stated the employees would bring legal disputes against the company through arbitration rather than in court and included class-action waivers.
Donato wrote in the ruling, “Twitter provided copies of the signed agreements, which are clear and unambiguous.”
Since Elon Musk took over Twitter in late October, the company has fired thousands of employees. Musk has said the former employees will receive three months of severance pay. The lawsuit alleges that Twitter had repeatedly told employees before the takeover that even under the billionaire’s management, employees would still receive at least as much severance as the company had previously promised, including two months of severance pay.
But many of the fired employees didn’t get that much; they received only a month’s severance. The class action lawsuit, which accuses Twitter of breaching its contract, claims that Twitter should have paid the fired employees the promised two months of severance, as well as the two months of non-work wages they had already received, because of Twitter’s efforts to avoid violating the WARN Act, which requires companies to give notice in the event of mass layoffs.
The dispute resolution agreement provided to workers with their employment contracts states that disputes related to layoffs, among other things, must be “resolved only by final and binding arbitration by an arbitrator, and not by a court or jury trial.
The agreement added: “You and the Company agree to initiate arbitration solely on an individual basis and not on a class basis or on behalf of a private attorney general.”
The dispute resolution agreement states that “arbitration is not a mandatory condition of an employee’s employment with the Company,” and indicates that employees can sign a separate form to opt out.Donato further stated that copies of the dispute resolution agreements for 2017 through 2021, however, show that they were signed by five plaintiffs “Plaintiffs have not opted out.”
Donato said the original five plaintiffs who filed the lawsuit on Nov. 3 “were required to engage in individual arbitration.
The other three plaintiffs who joined the complaint Dec. 9 said they did not sign the arbitration agreement, Donato said, adding that they were therefore not affected by last Friday’s ruling and that he would decide how to handle their complaint at a later date.