Lior Samfiru with Bill Carroll discusses $130 million Shopify class action lawsuit

Interview Summary

Many employees who were recently terminated by Shopify in its latest round of layoffs were offered an adequate severance package. After accepting the severance offer, they were then informed they were going to be given far less. Can employers legally renege on severance pay? What does the Shopify class action hope to accomplish for terminated Shopify employees?

Lior Samfiru, an employment lawyer and co-founding Partner at Samfiru Tumarkin LLP spoke to Bill Carroll on 580 CFRA to answer these questions and more on the lawsuit.

Interview Notes

• Employers renege on severance offers: It is rare and uncommon for an employer to renege on an offer of severance pay. It is considered a contract between an employer and a former employee once a severance package has been agreed upon. By reneging on what was initially offered, Shopify has breached the terms of the contracts.
• The difference in severance offers: The lead plaintiff in the Shopify class action Iian Russell experienced a reduction of over $50,000 in severance pay from the initial offer to Shopify’s latest severance calculation. Iain Russell’s initial offer was reasonable and should have been abided by. Each Shopify employee’s termination and severance agreement listed the amount they would be owed before signing.
• Shopify’s argument for the reduction in severance: Shopify has argued there was a mistake or error in their severance calculations. Once an agreement has been reached and an employee abides by the terms of acceptance, it is not advisable for an employer to breach the terms of the agreement. Filing the class action will hopefully lead to Shopify resolving the suit before further litigation is needed.
• Reasoning required to lower severance: Samfiru Tumarkin LLP has yet to receive a response from Shopify after the class action has been filed. Shopify might argue miscalculation as a reason for reducing severance packages. Former Shopify employees that experienced a reduction in severance pay after accepting an offer are automatically included as part of the class action lawsuit.