Former Twitter employees allege that the once-mighty tech giant is stalling arbitration in almost 900 cases by refusing to pay its legal bills, according to court records filed on Monday.
After taking over the company in October, Twitter CEO Elon Musk terminated thousands of people; Musk himself said he had axed 80% of the payroll as of mid-April. Many of these former employees had signed contracts agreeing to resolve any disputes arising from their employment at Twitter through arbitration, which corporations largely prefer in order to avoid potentially embarrassing and costly trials.
But Twitter is now refusing to pay the arbitrator, according to a proposed class action lawsuit filed in the US District Court for the Northern District of California.
The result is that 891 cases are currently stalled, barring many former employees from compensation allegedly owed to them.
Under many Twitter employment agreements, the ex-employee is supposed to pay a nominal filing fee to Judicial Arbitration and Mediation Services (JAMS), and all other costs must be paid by Twitter, court documents say.
The company had been cooperating with the arbitration process since Musk’s takeover late last year. But Twitter allegedly began stonewalling in early June by refusing to pay JAMS as previously agreed.
The company wanted the fees split evenly among the parties, which the ex-employees refused to do.
The new lawsuit comes as Twitter faces deep financial straits spurred by Musk’s abrupt and often chaotic changes to the platform, which has been dragged down by extremist content. The New York Times reported in early June that Twitter’s ad sales had plummeted after major advertisers fled the platform.
Twitter’s ability to pay its bills has been called into frequent question under Musk, who frequently tops lists of the world’s richest people.
In recent months, the company’s landlords have sued it for not paying rent on some of Twitter’s offices and for not paying for office services such as janitors. According to reports by Platformer and The Wall Street Journal, the company also clashed with Google Cloud over its server bills.
In April, Twitter’s former senior director of compensation, Mark Schobinger, accused the company of failing to pay out millions in promised bonuses.
Other proposed class action suits have alleged that Twitter’s layoffs unfairly targeted women and that the company violated federal disability law by mandating 12-hour workdays.
Meta, the company behind Facebook and Instagram, is expected to launch a Twitter competitor called Threads later this week.