Formerly Twitter, now X, is grappling with 2,200 arbitration cases initiated by ex-employees post-Elon Musk’s leadership overhaul. With potential fees amounting to $3.5 million, a recent filing in Delaware’s court, Chris Woodfield v. Twitter, X Corp., and Elon Musk, reveals issues with promised severance payments and arbitration delays. The controversy highlights a larger debate around arbitration’s transparency and efficiency for dispute resolution. Similar cases, like Ma v. Twitter, reinforce concerns about mandatory arbitration and filing fee disputes.
X, previously known as Twitter, is currently entangled in a complex situation involving over 2,200 arbitration cases initiated by former employees. These cases have arisen in the aftermath of Elon Musk assuming control of the company and implementing significant changes, including staff reductions. The collective cost of filing fees for these arbitration cases could potentially reach a staggering $3.5 million.
New information about the arbitration cases has come to light through a recent legal filing in a Delaware district court. The lawsuit in question is titled Chris Woodfield v. Twitter, X Corp., and Elon Musk (Case No. 1:23-cv-780-CFC).
Chris Woodfield, a former senior staff network engineer stationed at Twitter’s Seattle office, alleges in his lawsuit that the rebranded “X” entity, under Elon Musk’s leadership, failed to fulfill promised severance payments. Additionally, Woodfield asserts that X hindered the alternative dispute resolution process by neglecting to cover the mandatory fees necessary to proceed with the JAMS arbitration system.
The JAMS website indicates that for cases involving two parties, the filing fee stands at $2,000. However, when disputes stem from employment agreements, employees are obligated to pay only $400.
The flat application of this basic fee to X’s extensive array of 2,200 arbitration cases equates to roughly $3.5 million, with the potential for supplementary charges in the future.
X’s legal representatives contest the notion that the company mandated arbitration as the sole means of issue resolution. Consequently, they argue that X should not bear the responsibility for the majority of the filing fees.
Meanwhile, Woodfield and others sharing a similar predicament are actively seeking an escape from arbitration in favor of trial proceedings.
A prior report from CNBC highlighted that numerous major corporations enforce arbitration agreements upon hiring, wherever legally permissible. This practice necessitates individuals to secure a judicial exemption before they can openly present their case in court, as court proceedings create a public record of their statements.
Critics of arbitration perceive it as a veiled system that obstructs transparency about how companies address labor-related matters and the outcomes of previous, comparable cases.
Advocates of arbitration posit that it offers an expedient way for companies and employees to resolve disputes without burdening employees with exorbitant legal costs, particularly in the event of an unfavorable ruling.
The litigation involving Chris Woodfield against Musk’s X Corp. mirrors another proposed class action filed in a federal court in San Francisco. This parallel case, Ma v. Twitter, in the Northern District of California (Case No. 3:23-cv-3301), involves former Musk-era Twitter employees asserting that the company impeded over 891 arbitration cases by failing to remit obligatory filing fees. This delay occurred after the company’s requirement for employees to agree to arbitration as a condition for receiving severance.
