Elon Musk, Twitter facing $500M class action over severance payments

Less than a year after laying off at least half of Twitter’s workforce, Elon Musk and the social media platform are facing a massive class-action lawsuit.

According to news outlets, including Variety, former Twitter employees allege that the company failed to provide them with the severance packages they agreed to.

The class action, filed in the U.S. District Court for the Northern District of California, is seeking damages of at least $500 million.

Both Musk and Twitter are being asked to “abide by all terms of the severance plan by paying all terminated employees what they are owed.”

The lawsuit is the latest in a long list of legal battles that have been launched against the social media company since it began to trim its headcount last year.

In May, a federal judge dismissed a proposed class-action lawsuit against Twitter, which alleged that the company’s mass layoffs in October 2022 “disproportionally targeted” female workers.

The court found that the complaint lacked specific details.

SEE ALSO
• Twitter staff receive severance offers two months after mass layoffs
• Report: Top Twitter executives fired ‘for cause’ to avoid severance payouts
• Elon Musk to Twitter staff: Be ‘extremely hardcore’ or quit

Shopify also facing class action

Twitter isn’t the only major North American tech company that is facing a class action for not providing laid-off staff with the severance packages they initially agreed to.

Samfiru Tumarkin LLP has launched a $130-million lawsuit against Shopify after the Canadian e-commerce giant eliminated approximately 20 per cent of its workforce in May.

LISTEN: Employment lawyer Lior Samfiru breaks down the firm’s class-action lawsuit against Shopify with CityNews Ottawa’s Rob Snow.

“In my over two decades as an employment lawyer, I have never witnessed an employer renege on accepted severance agreements in this manner, particularly during times of economic uncertainty,” Lior Samfiru, national co-managing partner at Samfiru Tumarkin LLP, said in a news release.

“Shopify’s conduct not only breaches the contracts it established with its employees, but it also demonstrates a disregard for fairness.”

Major tech layoffs continue

The class-action lawsuits against Twitter and Shopify come as layoffs continue to sweep across the tech sector.

Several big names, including Microsoft, Ritual, Spotify, Lyft, Dropbox, Meta, Amazon, Alphabet, and Dell, are significantly scaling back their staffing levels as they continue to navigate challenging economic conditions.

SEE ALSO
• Ride-hailing firm Grab cutting 1,000 jobs as part of restructuring
• Employment lawyer on recent tech layoffs and severance
• Where are layoffs happening in Canada?

Termination agreements for Twitter Canada staff

In Canada, non-unionized employees at Twitter are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

Severance can be as much as 24 months’ pay, depending on a number of factors.

LEARN MORE
• Severance for technology industry employees
• Severance for provincially regulated employees
• Severance packages in mass layoffs

WATCH: Employment lawyer Lior Samfiru explains why you are still owed severance if you have been downsized on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper severance if it falls short of what you are actually owed.

If you don’t receive the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.

In some cases, employers pressure staff into accepting poor severance packages, such as imposing a deadline for accepting the offer.

Non-unionized employees in Canada have up to two years from the date of their dismissal to pursue a claim for full severance pay.