Introduction

X, the social network formerly known as Twitter, is currently dealing with 2,200 arbitration cases filed by former employees. These cases emerged after Elon Musk took over the company, implemented significant changes, and reduced the workforce. The sheer volume of cases could result in filing fees amounting to $3.5 million.

The Lawsuit and Allegations

In a recent filing for a lawsuit at a Delaware district court, the arbitration numbers were disclosed. The case, titled Chris Woodfield v. Twitter, X Corp. and Elon Musk (No. 1:23-cv-780-CFC), involves Woodfield, a former senior staff network engineer at Twitter’s Seattle office. He claims that Musk’s Twitter (now known as X) failed to fulfill their promise of severance pay and also caused delays in alternative dispute resolution by not covering the necessary fees for JAMS arbitration system.

The Filing Fees

According to JAMS’ website, the filing fee for two-party matters is $2,000, while matters based on employment agreements require a fee of $400 for employees. Since JAMS decided that the basic fee applies to all 2,200 arbitration cases involving X, the total amount for filing fees alone would reach around $3.5 million, with potential additional fees.

Company’s Defense

X’s legal team argues that the company did not enforce mandatory arbitration for resolving issues, which would exempt them from covering the majority of the filing fees.

Moving Cases to Trial

Woodfield and others in similar situations are attempting to bypass arbitration and transfer their cases to trial.

Arbitration Controversy

Arbitration agreements are common among large corporations, requiring employees to sign them upon employment where legally permitted. Critics argue that arbitration is a secretive system that limits transparency and hinders knowledge about how companies treat their workers and previous related cases. On the other hand, proponents believe that arbitration provides an efficient way for companies and employees to resolve disputes without burdening employees with substantial attorney’s fees, especially if they lose the case.

Similar Class Action Lawsuit

The Woodfield case against Musk’s X Corp. is similar to another proposed class action filed in a San Francisco federal court titled Ma v. Twitter in the Northern District of California (No. 3:23-cv-3301). Former employees of Musk-era Twitter allege that the company caused delays in at least 891 arbitration cases by not paying the required filing fees after compelling employees to agree to arbitration in exchange for severance.