A San Francisco federal judge has ruled that Twitter Inc. must notify the thousands of employees who were laid off following Elon Musk’s acquisition of the company of a proposed class action accusing the company of failing to provide adequate notice before terminating them.
In a three-page order issued on Wednesday, U.S. District Judge James Donato stated that before asking employees to sign severance agreements waiving their ability to sue the company, Twitter must provide them with “a succinct and plainly worded notice” of the lawsuit filed last month.
Musk laid off roughly 3,700 employees in early November as part of a cost-cutting measure, and hundreds more subsequently resigned.
According to the lawsuit, Twitter failed to provide the required 60-day notice under federal and California laws before engaging in mass layoffs. Twitter has vehemently denied any wrongdoing.
In the ruling, Donato stated that asking employees to waive legal claims against Twitter without informing them of the lawsuit would be deceptive.
Twitter had agreed not to seek releases from laid-off employees until Donato made his decision.
Shannon Liss-Riordan, a lawyer for the plaintiffs, called the decision “a basic but important step that will provide employees with the opportunity to more fully understand their rights instead of just signing them away”.
Twitter did not respond to a comment request.
The company claimed that notice was unnecessary because most of its employees had signed agreements requiring them to resolve legal disputes through arbitration and waiving their right to participate in class actions against the company.
Next month, Donato will hold a hearing on Twitter’s motion to send the case to arbitration. This month, the plaintiffs amended their complaint to include workers who claim they never signed arbitration agreements.
In addition to the layoffs, Twitter is facing three other proposed class actions in the same court. The lawsuits accuse Twitter of failing to provide notice to contract workers before dismissing them and of discriminating against women and employees with disabilities. The company has yet to respond to these allegations.
Liss-Riordan, who is involved in all of the lawsuits, has stated that she may file additional employment claims against Twitter, including if the company denies laid-off workers severance pay. She also stated last week that if Musk follows through on a reported threat to sue employees who leak confidential information to the press, she will defend them.