Elon Musk's social media company, formerly known as Twitter, is currently facing over 2,200 arbitration cases from former employees, according to a recent court filing. These cases have piled up since January, when the company faced 200 arbitration cases. The claims are likely related to severance pay, following layoffs that occurred after Musk took over the company in October.
Arbitration is an alternative dispute resolution process where two parties bring in an independent mediator to help find a solution. It is handled privately, outside of court. While it is not clear what all the arbitration claims against the company are about, previous lawsuits filed against Twitter have been related to severance pay.
Since the takeover, former employees have filed lawsuits alleging that Twitter failed to pay promised severance packages and bonuses. In a proposed class-action lawsuit, it was claimed that the company had failed to pay "tens of millions of dollars" worth of bonuses. X, formerly known as Twitter, has not yet responded to these allegations.
The thousands of arbitration cases could cost X at least $3.5 million in filing fees alone, not including additional legal fees and potential financial penalties. Lawyers for X have argued that the company did not require workers to settle issues through arbitration, therefore they should not have to bear the majority of the filing fees.
The revelation of the number of arbitration cases came in a motion to compel arbitration filed on behalf of ex-Twitter employee Chris Woodfield. Private arbitration allows companies to resolve disputes with employees out of the public eye and can help employees avoid hefty legal fees. This approach is also used by Tesla, another company owned by Musk, to handle certain employee claims.
Overall, X (formerly Twitter) is facing a significant number of arbitration cases from former employees, likely related to severance pay. The financial implications for the company could be substantial, and the outcome of the cases will depend on the decisions made by private arbitrators. X has not yet responded to the allegations made by former employees.