Twitter is being sued by its former employees again — this time for allegedly refusing to pay the expected cost of legal arbitration. As previously reported by Bloomberg, the suit was filed on July 3rd in the Northern District of California. It seeks to force Twitter to cover most of the costs in a slew of arbitration claims, which, of course, Twitter doesn’t want to do.
This latest lawsuit is part of a host of litigation between Twitter and many of the thousands of employees it abruptly fired when Elon Musk took over last year. Laid-off employees previously sued Musk for giving insufficient notice before firing them and later altered their claim to add that they were not paid what they were owed in their severance agreement.
But the laid-off employees were forced in January to give up the class-action lawsuit in favor of individual arbitration, thanks to a provision in their contract. The contract requires they use JAMS, a professional arbitration services firm, and JAMS, in turn, requires both parties to abide by a set of rules it lays out on its website.
The employees’ lawyer was very quick to point out they’d already begun filing arbitration claims. But now, those claims are in limbo. As part of JAMS’s fee schedule, the employees are on the hook for a “relatively nominal” amount of the filing fees, which cost $2,000 for a two-party arbitration, with Twitter picking up the rest. Twitter responded to them by requesting that JAMS allow them to split the cost evenly between Twitter and hundreds of employees who had filed from outside of California — a violation of the JAMS preconditional minimum standards of procedural fairness.
JAMS declined, saying it would not administer arbitration for any case that didn’t meet those standards. Twitter, the complaint says, refused to comply with that condition in most states outside California. JAMS then bowed out of any case Twitter said it would not pay the required fees for — some of which already had hearing dates — saying it would “close its file as JAMS will not proceed with cases that we have determined fall under our Employment Minimum Standards if Respondent will not abide by those standards.”
That puts the employees in a tight spot. With the requirement to use JAMS but Twitter’s refusal to abide by the arbitration group’s terms, the employees must either agree to “waive the application of the Minimum Standards” or they won’t be able to move forward without legal intervention. Were they to waive those standards, they’d be responsible for significantly more of the share of JAMS’s fees, which can be substantial; according to a 2017 article from the American Bar Association’s Dispute Resolution Magazine, JAMS’s services can range from $300 per hour to more than $15,000 per day.
In most cases, arbitration is a bad deal for employees, as it takes away a great deal of legal flexibility in cases where something goes wrong. But it turns out, when you screw over thousands of employees, hundreds of individual arbitration cases can quickly overwhelm your company’s lawyers, as Twitter’s own lawyers admitted last month.
Shannon Liss-Riordan, one of the employees’ lawyers named in the brief, told The Verge via email, “The reason we had to file nearly 2,000 individual arbitration demands is because Twitter forced us to — by moving to compel arbitration. Now that it has made its bed, it doesn’t want to lie in it.”
Twitter, under Elon Musk, has been trying to pull out of all sorts of financial obligations. From internal communications services to cloud services subscriptions to physical office space, stories just keep bubbling up about the company’s attempts to scrimp and save as its platform continues to decay, forcing many of its users to find somewhere, anywhere else to go.
When asked for comment, Twitter responded with its usual poop emoji.