Elon Musk’s alleged history of neglecting payment obligations is beginning to yield consequences.
After facing a slew of lawsuits accusing one of the world’s wealthiest individuals of failing to meet severance payment commitments owed to thousands of employees he laid off following his acquisition of Twitter, repercussions are emerging.
As reported by CNBC on Monday, the technology company now known as X is contending with approximately 2,200 arbitration cases filed by former employees, involving mandatory fees totaling $3.5 million. This staggering amount does not even encompass the actual severance payments owed to the terminated workers under Musk’s leadership.
In October, shortly after assuming control of Twitter, Musk oversaw a massive layoff that impacted over half of the company’s workforce. He had pledged to provide most employees with at least two months’ salary, along with a week’s pay for each year of their service at the company.
However, thousands of individuals claim they have not received any compensation, prompting former employees to initiate several legal actions to secure the benefits promised to them.
One of these lawsuits, initiated earlier this year, invokes an arbitration provision outlined in the employees’ contracts. According to reports from Mashable, this provision places the responsibility for covering $1,600 in arbitration expenses per two-party case on Musk’s company, with former employees required to contribute only $400. Given the large number of cases, the aggregate arbitration cost for the social media network alone amounts to nearly $4 million.
Reportedly, X has challenged the obligation to settle these expenses, asserting that it did not compel former employees to resolve their disputes through arbitration. Consequently, former staff members have initiated another legal action, seeking the company’s coverage of the fees associated with their initial filings.
