X is potentially on the hook for more than $3.5 million in filing fees.
X Marks Trouble
Since Elon Musk took over as CEO of X, formerly known as Twitter, the company has been a lawsuit magnet. There's that class-action suit in California by former employees who claim they weren't paid promised bonuses. Another claims the company hasn't ponied up $500 million in severance pay to employees who were laid off.
Now add more than 2,200 arbitration cases, according to a complaint filed earlier this week in Delaware. All told, the social media giant is potentially on the hook for more than $3.5 million in filing fees, according to CNBC's estimate. When it rains, it pours!
The deluge of arbitration cases was revealed in a court document filed by former employee Chris Woodfield against X and Elon Musk. Last month, Woodfield slapped the company and Musk with a separate complaint, claiming they hadn't paid him his promised severance.
The cases underline Musk's bull-in-a-china-shop approach when he first took over the social media giant in October last year. When he became CEO, Musk laid off legions of workers, cutting staff numbers from around 8,000 to just 1,500 as of this April. That's a lot of pissed off people with an axe to grind — hence the flood of suits.
The arbitration cases from former employees add another messy wrinkle to the legal challenges X and Musk are facing.
Arbitration is a legal process in which two opposing parties agree to mediate their dispute with a third party arbitrator rather than going through the court system. At Elon Musk's other company, Tesla, employees are forced to sign arbitration agreements as a requirement for employment in states where it is legal, which is a move some politicians decry as a way to hide complaints of discrimination, which Tesla has faced.
In the matter of the arbitration cases against X and Musk, these cases are processed through JAMS, a non-profit legal organization devoted to "alternative dispute resolution."
In December of last year, former Twitter employees started filing requests for arbitration with Twitter via JAMS, according to Woodfield's court filing. By January this year, it'd accrued more than 200 cases, and has since grown to more than 2,200 filings.
In Woodfield's case, he claims that X and Musk have also delayed in paying their required portion of the JAMS arbitration fee of $2,000, as outlined on its website. Employees are only required to pay $400 — hence if you have 2,200 arbitration cases, and X is required to pay $1,600 for each, then crunching these numbers arrives at a total of $3.5 million that X will have to pay, plus any liabilities from suits resolved against the company and severance packages they are required to pay. The money owed, in other words, could be staggering.
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