Elon Musk’s massive Twitter layoffs are here. Are they legal?

ADVERTISEMENT

Elon Musk’s massive Twitter layoffs are here. Are they legal?

Elon Musk has started cleaning house at Twitter, and the casualties are ultimately expected to include nearly half the social media site’s workforce.

Twitter broke its silence on the long-rumored layoffs in a companywide memo on Thursday night, according to multiple major media outlets. The memo did not state how many of Twitter’s 7,500 employees would lose their jobs, but it said all affected workers would be informed by noon Eastern time on Friday.

By late morning, reports were emerging of entire teams being laid off, including the curation team, which helped tackle misinformation and contextualize the “Explore” page, and the machine learning ethics, transparency and accountability team, which was studying algorithmic amplification. The company also reportedly laid off most of its extensive communications team.

Civil rights groups also began publicly pressuring advertisers to pause buying ads on the platform given the layoffs’ likely effect on Twitter’s content moderation capacity.

ADVERTISEMENT

Legal experts told Grid that this sudden and dramatic reshaping of Twitter’s workforce by Musk — a billionaire who often seems to flout or ignore rules — could run smack into federal and California labor laws, given that Twitter’s headquarters are in San Francisco. Those laws require companies planning mass layoffs to provide ample notice, usually 60 days; Musk’s purchase of Twitter became official one week ago, on Oct. 28.

Courts may take a dim view of any attempt by Twitter to dismiss large numbers of employees “for cause” (usually defined as a lapse in judgment, violation of company policy or other misconduct) to circumvent labor protections.

Musk has already used this tactic on Twitter’s former top executives. Hours after he took control last week, the billionaire quickly ousted CEO Parag Agrawal, CFO Ned Segal, General Counsel Sean Edgett, and Head of Legal Policy, Trust and Safety Vijaya Gadde. It quickly came out that he fired them for cause, which would enable him to potentially sidestep dealing out around $122 million in “golden parachutes” for the executives.

“I’ve looked at some of the language in the executive agreements. It’s totally baseless for [Musk] to seek termination with cause,” said Adam Badawi, a professor of law at the University of California, Berkeley. “To get terminated with cause, the circumstances have to be extreme, they have to kind of be malfeasance or someone did something illegal. Things like differences of opinion, or ‘We tried to do things one way and it turned out not to work’ — that’s not the successful basis for terminating someone for cause.”

He added: “I fully expect the executives will sue.”

ADVERTISEMENT

Experts said that Musk could attempt to forestall any lawsuits from lower-level departing employees by offering separation agreements that compensate them if they sign away their right to challenge Twitter’s action in court. It is not clear whether Twitter is following that strategy.

But a group of Twitter employees has reportedly already filed a class-action suit, alleging the company is in violation of federal labor law.

Duty to warn

Key labor laws at play include both the California and federal versions of the Warn Act, which both include provisions governing how all but the smallest companies conduct layoffs.

The federal Warn Act requires companies who plan to lay off at least 50 workers at one site to give those employees 60 days’ notice, and to notify state and local representatives. It applies to companies with 100 or more full-time employees and allows only a handful of exceptions: natural disaster, unforeseeable business circumstances or a failing business.

None of those would seem to apply in Twitter’s case.

The penalties for violation can result in the employer paying two months of severance out to affected employees.

Cal-Warn is the state equivalent, and this and the federal act provide co-protection. It takes effect at a lower size threshold — 75 full-time employees — and allows civil penalties of $500 for each day an employer is in violation of the act, with up to 60 days of back pay for employees.

On Blind, an anonymous social networking site for tech workers, a Twitter employee posted about the cons of working at Twitter right now: “The absolute and swift destruction of a compassionate, human-first corporate culture is leaving Tweeps feeling like we’ve lost our family.”

Badawi said that it seems odd for Musk to immediately saddle Twitter with the risk of litigation over staff changes, especially with respect to the site’s former top executives. Musk needed the cooperation of Agrawal, the former CEO, to complete the merger. Golden parachutes of the sort Musk is trying to avoid paying are intended to help facilitate that type of cooperation and make changing leaders easy.

“I don’t quite get it because it means that any CEO any company that he wants to buy in the future, the executives are going to be like, ‘Well, aren’t you just going to try to sue us after this is over?’” said Badawi. “So I find that a little bit perplexing.”


ADVERTISEMENT

Content moderation concerns

Groups that met with Musk to discuss content moderation practices earlier this week are also sounding the alarm about potential layoffs, saying they will jeopardize advertisers’ brand safeguards and content moderation standards. The groups, which include Media Matters, Free Press, Accountable, Color of Change, GLAAD and Voto Latino, are calling for Twitter’s largest advertisers to pause ad buys on the platform.

Musk has previously said the site would not be a “free-for-all hellscape,” but in a letter to the CEOs and top executives of Twitter’s top 20 advertisers, which include companies like Apple and Verizon, the over 45 civil rights groups expressed skepticism.

“[Musk] has threatened to drastically reduce employee headcount, putting those responsible for maintaining community standards and protecting user safety first on the chopping block,” said the groups in the letter. “Musk has also publicly supported the idea of restoring the accounts of prominent individuals Twitter had suspended for inciting and glorifying political violence, spreading election- and COVID-related disinformation and abusing people based on their race, ethnicity, national origin, sexual orientation, gender, gender identity, religious affiliation, age, or disability.”

The letter asks the companies to commit publicly to ceasing advertising if Musk “follows through on his plans to undermine brand safety and community standards including gutting content moderation.”

Musk weighs in

Musk this morning tweeted that Twitter had seen a “massive drop in revenue” and blamed it on activist groups.

ADVERTISEMENT

“Boycotts are free speech. His tweet shows his ongoing lack of understanding about what free speech means,” said Nora Benavidez, a senior counsel and the director of digital justice and civil rights at Free Press, a media advocacy group, members of which met with Musk earlier this week. “It also means the campaign we launched is working!”

On a press call, leaders of Free Press and allies in a group calling itself the #StopToxicTwitter Coalition, likened advertising on Twitter right now to advertising on Parler before the Jan. 6 insurrection.

“We’re here today because hate speech and conspiracy theories that Twitter and other social media platforms amplify have real-life consequences,” said Jessica González, co-founder of Free Press, who met with Musk this week. “They beget violence. They threaten public health. They suppress the vote and undermine democracy. They show the speech of their targets. And they disproportionately harm people of color women, LGBTQ people, religious minorities, immigrants, non- English speakers and people with disabilities.”

Members of the coalition have reached out to major companies that advertise on Twitter, asking them to stop doing so in light of Musk’s decision to divert resources from content moderation.

General Mills and Audi are among the latest companies to pause ads on the platform.

This article has been updated. Thanks to Lillian Barkley for copy editing this article.

  • Benjamin Powers
    Benjamin Powers

    Technology Reporter

    Benjamin Powers is a technology reporter for Grid where he explores the interconnection of technology and privacy within major stories.