Elon Musk’s alleged tendency to neglect bill payments is starting to have repercussions.
Following numerous lawsuits alleging that one of the wealthiest individuals on the planet failed to fulfill severance payments owed to many of the 6,000 employees he terminated after acquiring Twitter, consequences are emerging.
According to a report by CNBC on Monday, the technology firm now identified as X is confronted with around 2,200 arbitration cases lodged by former employees, entailing mandatory fees amounting to $3.5 million. This figure doesn’t even encompass the actual severance owed to the workers Musk dismissed.
In October, shortly after assuming control of Twitter, Musk conducted a massive layoff that impacted over half of the company’s workforce. He pledged to provide most employees with at least two months’ salary, in addition to a week’s pay for each year they had served at the company.
However, thousands of individuals assert that they haven’t received any compensation, leading ex-employees to institute several legal actions in pursuit of the benefits they were promised.
One of the lawsuits, initiated earlier this year, invokes an arbitration provision outlined in employees’ contracts. As reported by Mashable, this provision places Musk’s company responsible for covering $1,600 in arbitration expenses per two-party case, while only necessitating former employees to contribute $400. With a tally surpassing 2,000 cases, the aggregate arbitration cost for the social media network alone amounts to nearly $4 million.
Reportedly, X has contested the obligation to settle these expenses, contending that it has not compelled the former employees to shift their disputes to arbitration. Consequently, former staff members have initiated another legal action, requesting the company to cover the fees connected to their original filing.