Elon Musk's X Faces 2,200 Arbitration Cases with Filing Fees Over $3M

Elon Musk’s X Faces 2,200 Arbitration Cases with Filing Fees Over $3M

UTC by Mercy Tukiya Mutanya · 2 min read
Elon Musk’s X Faces 2,200 Arbitration Cases with Filing Fees Over $3M
Photo: Depositphotos

X’s legal team argues that the company did not mandate employees to go the arbitration route and as such cannot be expected to cover the larger share of the filing fees.

Social media platform X, formerly known as Twitter, is on the receiving end of 2,200 arbitration cases filed by former employees in response to the mass lay-offs that followed Elon Musk’s takeover of the company last year.

This was revealed in a filing on Monday as a part of a lawsuit in a Delaware district court. The filing (C.A. No. 1:23-cv-780-CFC) names Twitter, Inc., X Corp., X Holdings I, Inc., X Holding Corp., and Elon Musk as defendants. The filing also names as the plaintiff former senior staff network engineer “Chris Woodfield, on behalf of himself and all others similarly situated”. Woodfield alleges that the social network had failed to honor its promise to pay his severance following the termination of his employment. In addition, Twitter (now X), allegedly delayed alternative dispute resolution when it neglected to pay the fees needed for him to proceed with the Judicial Arbitration and Mediation Services (JAMS) arbitration process.

According to JAMS’ website, the filing fee for “two-party matters” is $2000 while “for matters based on a clause or agreement that is required as a condition of employment, the employee is only required to pay $400.” With this basic fee applying to all 2,200 cases, total filing fees come to about $3.5 million, with additional fees expected to follow.

X’s legal team, however, argues that the company did not mandate employees to go the arbitration route and as such cannot be expected to cover the larger share of the filing fees.

In a similar case filed in the Northern District of California (No. 3:23-cv-3301), ex-Twitter employees allege that the company compelled workers to arbitrate their disputes in exchange for their severance and then went on to delay more than 891 arbitration cases by failing to cover the required filing fees.

The arbitration system has been criticized by some for its secretive nature which makes it hard for current and prospective workers to gain insight into how a company treats employees. In many large corporations, workers are required to sign an arbitration agreement upon employment. This means that for employees to speak freely in court, they would first have to get an exemption from a judge.

Supporters claim that the system is a way for firms and their workers to resolve their issues efficiently while protecting workers from shouldering massive legal fees, especially in the event that they lose the case.

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