Former Twitter employees sue platform over severance packages

Yahoo Finance's Alexis Keenan discusses a class-action lawsuit against Twitter after Elon Musk's 'intensity' ultimatum.

Video Transcript

HELEN-SAGE LEE: I am here today because Twitter has been trying to maneuver out of owing all of us the full severance that was promised to us prior to the acquisition.

AKIKO FUJITA: That was former Twitter employee Helen-Sage Lee during a press conference held by Attorney Lisa Bloom. Bloom announcing arbitration complaints over Elon Musk's layoffs at Twitter as complaints of improper tech layoffs grow even louder. For more on Yahoo Finance-- for more on this, let's bring in Yahoo Finance's Alexis Keenan. And Alexis, we should point out, this isn't the first lawsuit Twitter, under Elon Musk, has been hit with. How's this one different?

ALEXIS KEENAN: Yeah, Akiko, so this came from Lisa Bloom, an attorney in California. How else-- live on Twitter is how she made this announcement. And she did it on behalf of Ms. Lee and also two other laid off workers at Twitter. They say that in May and October, Twitter's HR department and its legal department promised that if they stayed with the company during the tumultuous time that was the merger dispute, that the company would honor their pre-merger severance offers.

Instead, what Bloom is saying is that some of the benefits have been withdrawn by Elon Musk at the helm, things like prorated bonuses, healthcare benefits, and accelerated vesting. Lee said there are 3,765 similarly situated employees, all of whom could potentially file a lawsuit-- that's, actually, an arbitration in this case because the employees have signed agreements that they would arbitrate these types of labor disputes.

Now, remember, Musk laid off about half of Twitter's workforce with an ultimatum to either accept a hardcore working environment or three months of severance. Now, Bloom is saying that that offer is actually illegal. She said that under the merger agreement, the post-merger severance that is offered to these employees has to be no less favorable than what they had agreed to beforehand.

Bloom said that the employees are being paid until January 4, but she said it's super unclear whether that's actually regular pay or whether that's actually part of the severance. She also acknowledges, though, that these workers are at will employees, but she said there's an exception that would apply when the benefits are promised in writing in the way they were, she says, here.

She also is questioning Musk's compliance with the federal WARN Act. That's something that we've talked about before that requires companies of a certain size to give 60 days' notice to employees of a termination. On top of all that, Bloom is saying that she's also going to be filing some civil rights claims. These are discrimination claims, she says. She wasn't really particular about what those would look like, but she said some workers who were on leave, for example, and were terminated during a leave, that that violates discrimination laws in California.

Also, some reports of workers in New York filing arbitration or threatening arbitration claims, and also workers in Massachusetts as well, Akiko. So I would say this is a bit different based on its breadth of all of these claims that Bloom is saying she intends on bringing on behalf of these employees-- former employees.

RACHELLE AKUFFO: Certainly a lot of consequences for those rapid decisions that Musk made. I want to stay with tech layoffs because meta is also landing in hot water over severance packages. How is their angle different?

ALEXIS KEENAN: These big tech layoffs happy, it seems. These laid off workers from Meta, they are employees that were part of the company Sourcer Development Apprenticeship Program. And they complain that they're giving-- they're getting inferior severance to those regular employees. Now, these are short-term employees that were trying to transition into tech jobs. All 60+ of these workers have been laid off. In November, the company laid off. They're among the 11,000 that the company showed the door.

Now the workers say that they're getting the offer of eight weeks of base pay plus three months of COBRA benefits, versus regular employees, they say, who were given 16 weeks of pay plus six months of healthcare. These are also at-will roles. So this current group, though, was hired in April. They haven't been working for the company all that long, about eight to nine months. In their case, we have reached out to Meta to ask what their response is and if they will be matching the benefits that are being offered to these other employees. Guys.

RACHELLE AKUFFO: All right, thank you for those updates. Alexis Keenan there for us.