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Elon Musk’s Twitter Faces Lawsuit for Mass Layoffs: Here is All You Have to Know About WARN Act

Twitter has begun shedding staff underneath its new proprietor, Elon Musk. The San Francisco-based social media big is anticipated to terminate as much as 3,700 folks — half of its workforce — on Friday, in accordance with inner plans reviewed by Reuters this week. Twitter is already going through a proposed class motion claiming the layoffs are imminent and can violate US and California legal guidelines if staff will not be given advance discover or severance pay.

What does US legislation require?

The federal Employee Adjustment and Retraining Notification (WARN) Act requires companies with 100 or extra staff to supply 60 days’ discover earlier than participating in mass layoffs. The legislation defines mass layoffs as these affecting at the very least 500 staff throughout a 30-day interval, or at the very least 50 staff if layoffs influence at the very least one-third of an organization’s workforce. Employers can present employees with 60 days of severance pay in lieu of giving discover.

What are the penalties for violating the WARN Act?

An employer discovered to have violated the WARN Act could be ordered to present laid-off employees 60 days of again pay. The legislation additionally imposes penalties of $500 (practically Rs. 41,000) per violation per day. Comparable legal guidelines in California and different states impose related penalties.

What has Twitter been accused of?

The lawsuit filed in San Francisco federal court docket late on Thursday claims Twitter locked staff out of their accounts on Thursday, signaling that they’ll quickly lose their jobs. One of many 5 named plaintiffs, who is predicated in California, says he was terminated on November 1 with out discover or severance pay. It was not clear if Twitter is paying severance to employees who lose their jobs. Twitter didn’t instantly reply to a request for remark.

The lawsuit claims the layoffs violate the WARN Act and an analogous California legislation. The plaintiffs say they’re involved that Twitter will ask employees focused for layoffs to signal releases waiving their potential to sue in change for modest severance pay.

Produce other Elon Musk-run firms been sued underneath the WARN Act?

Tesla was sued in Texas federal court docket in June for allegedly violating the WARN Act via an abrupt nationwide purge of its workforce, together with 500 layoffs at a manufacturing unit in Sparks, Nevada. The legislation agency behind that case, Boston-based Lichten & Liss-Riordan, additionally represents the Twitter employees who sued on Thursday. The agency didn’t instantly reply to a request for remark. Tesla has stated it was merely “right-sizing” by firing poorly performing employees and never participating in layoffs that required advance discover.

Final month, a federal choose stated Tesla employees should pursue their claims in personal arbitration reasonably than court docket. The identical problem may come up within the lawsuit towards Twitter, as greater than half of private-sector US employees have signed agreements to arbitrate employment-related authorized disputes.

Has there been a rise in WARN Act litigation?

Employers confronted a spike in lawsuits introduced underneath the WARN Act and state legal guidelines through the COVID-19 pandemic, as many companies abruptly shuttered or terminated lots of their staff. Enterprise Lease-A-Automobile, Hertz Corp, restaurant chain Hooters and Florida lodge operator Rosen Inns and Resorts all settled WARN Act lawsuits over pandemic-related layoffs. Rosen settled claims by 3,600 employees for $2.3 million (practically Rs. 18 crore) and Enterprise agreed to pay $175,000 (practically Rs. 1.5 crore) to just about 1,000 employees. Hertz and Hooters paid undisclosed sums.

© Thomson Reuters 2022




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