Formerly Twitter (X) Faces $3M Costs, 2,200 Arbitration Lawsuits


X, formerly known as Twitter, is grappling with approximately 2,200 arbitration cases initiated by ex-employees following Elon Musk’s takeover of the company. The legal actions stem from Musk’s extensive changes to the company, including substantial workforce reductions. The filing fees alone for these numerous cases could add up to $3.5 million. This information was disclosed in a recent court filing linked to a lawsuit filed by a former senior staff network engineer, Chris Woodfield, against X Corp. and Musk.

Woodfield’s suit claims that X (formerly Twitter) promised but ultimately failed to provide him with severance pay. He asserts that the company further delayed the alternative dispute resolution process by not covering the required fees for him to proceed with arbitration through the JAMS system. JAMS indicates that for two-party cases, the filing fee is $2,000, while matters arising from employment agreements necessitate a $400 fee per the agreement.

X’s legal representatives contend that the company did not mandate employees to resolve disputes through arbitration, leading to a dispute about whether X should be responsible for the major portion of the filing fees.

Woodfield and others with similar grievances are seeking to transition their cases from arbitration to a trial setting. Many large corporations, where legally permissible, mandate arbitration agreements upon employment. Critics view arbitration as an opaque system that prevents transparency regarding companies’ treatment of their employees and past similar cases. In contrast, supporters regard arbitration as an efficient method to address workplace disputes while sparing employees from substantial attorney fees in the event of an unfavorable outcome.

Woodfield’s lawsuit against Musk’s X Corp. shares similarities with another proposed class action in a San Francisco federal court. In the latter case, ex-employees of the Musk-era Twitter contend that the company’s failure to cover required filing fees hindered over 891 arbitration cases, subsequent to compelling employees to agree to arbitration as a condition for severance.