On October 27th, 2022, Elon Musk bought Twitter for $44 billion. He became the owner and CEO and immediately enacted changes with the hope of making the company more profitable. However, in order to make Twitter profitable, in the upcoming month, Musk made drastic changes and announced what it meant to work at the new Twitter. Musk laid off over half its workers, from high-up executives to contractors. With this massive and quick change, Twitter was immediately sued and is now questioned about breaking employment law.
However, was what Elon Musk did to steer Twitter into a profitable new year really breaking employment law? As changes are still happening within the company, it is essential to understand what it means to the corporation and those laid off.
Did Twitter Abide By The WARN Act?
The WARN Act, the Working Adjustment and Retraining Notification Act, is a federal labor law established in 1988. This law is set to protect workers, their families, and communities by ensuring that businesses with over 100 employers give fair notice before mass layoffs happen. Under the law, employers must provide a 60-day advance notice and agreeable pay, such as severance or benefits.
With the takeover of Twitter by Elon Musk, Musk went straight to work by laying off more than half of their staff within the month. Musk promised workers that they would receive three months of severance pay to make up for the layoff; however, many past employees claim they did not receive all or half of their promised pay. With the breach of agreement, Twitter was sued due to violating the WARN Act. Unfortunately, nothing has come of this yet, as court proceedings might take up to five years to start officially. It is expected that new owners will make changes, but the interest and rights of the employees need to be accounted for.
Discrimination Within an Email
Throughout the mass layoffs, Musk sent out a company-wide email on November 16th, 2022, stating, “Going forward, to build a breakthrough Twitter 2.0 and succeed in an increasingly competitive world, we will need to be extremely hardcore. This will mean working long hours at high intensity.” He sent this with the ultimatum that employers were to agree to the new circumstances through an embedded link, or if they did not respond by 5 pm, that would be considered their notice.
While this email resulted in further layoffs, it also raised the question of ADA compliance and discrimination within the workplace. Wording the new workplace as extremely hardcore can close many doors for those unable to work at the level Musk asks for. Federal acts such as the Americans With Disabilities Act allow for accommodations, and many saw this email as those accommodations being threatened. Long hours at high intensity are not sustainable for many within Twitter.
This email led to a change of work-from-home policies, and now is only allowed based on “an exception basis for exceptional people.” While changing policies such as this is not illegal, if it is not done properly in workplace handbooks, it can lead to further problems.
What Might Happen Next For Twitter?
With all these new changes happening very quickly and affecting thousands of people, Twitter has received harsh backlash and lawsuits for its actions. The biggest issue Twitter will face is the wrongful termination of employees. If the severance pay agreement is seen to be breached, Twitter will face court troubles down the road.
To this day, Twitter continues to fire and lay off workers, leading people to question the legality of its actions. Twitter has not come out to explicitly speak on the legal issues they are facing, but Musk stands by his and the company’s decisions. While the actions are not yet defined as legal or illegal, Twitter does not seem to be wavering from its choices.
Employment law is crucial for the betterment of employees and their families. If you have further questions about the legalities of employment law and what it means to you, contact the team at Baldwin & Vernon.