Elon Musk Gets Big Win as Former Twitter Employees are Forced to Drop Class-Action Severance Pay Lawsuit

On Friday, Twitter and CEO Elon Musk was granted a win. U.S. District Judge James Donato ruled that several Twitter employees that were laid off who sued the company over their termination must pursue their claims individually in arbitration rather than a class action lawsuit.

The San Francisco judge ruled that five workers who sued in early November are obligated to go through arbitration under their contracts. The employees were pursuing a class action case, accusing Twitter of not giving them adequate notice before laying them off after the acquisition by Elon Musk.

Twitter had requested that the five former employees pursue their claims individually as part of the agreements they had signed with the company.

Three other former employees had joined the case who had opted out of the company’s arbitration agreement after the suit was first filed. The judge left that, “as warranted by developments in the case” as to whether the entire class action lawsuit must be dismissed.

According to Shannon Liss-Riordan, representing the plaintiffs, she has filed 300 demands for arbitration on behalf of former Twitter employees. All have claimed that they have not received the full severance package that was promised to them before Musk took over.

Liss-Riordan said in a statement, “Insisting that workers file claims one by one has backfired for many companies our firm has taken on. These companies think they can make employees just go away and not assert their rights by using arbitration clauses, but we have made them sorry about what they wished for.”

Twitter will still have to handle the arbitrations, but it looks like they will be able to do so now on an individual basis.

Musk has had a rough time over the last few months as the stock market downturn under Joe Biden’s economy made it harder to acquire Twitter. Musk’s other company, Tesla, has struggled to keep a steady stock price as many have been short selling it.

Whether or not Tesla car sales are going to fall off a cliff remains to be seen, however many think things are tightening up. This story gives Musk one small temporary win as he battles many headwinds with the economy and his various companies for the time being.