Lawsuit Alleges Twitter Mass Layoffs Violates U.S. Law

Twitter employees cried foul when new owner Elon Musk announced that nearly half of the 7,500 employees would be laid off, possibly in violation of the federal Worker Adjustment and Retraining Notification (WARN) Act.

Twitter employees filed a federal lawsuit on Nov. 3, 2022, alleging the company’s actions ran afoul of laws that govern notice of employment termination. Musk’s company Tesla is facing a similar lawsuit for how it handled layoffs in Nevada. Mass layoffs are often regulated by federal employment law.

A similar high-profile lawsuit was filed in Pennsylvania in the Eastern District Court against Philadelphia Energy Solutions in 2019. The refinery gave about 1,000 workers only a few days’ notice that they were being laid off after an explosion destroyed part of the plant.

Requirements of the WARN Act

The U.S. Department of Labor oversees the WARN Act, which went into effect in 1989.

WARN requirements include the following:

• Covers employers with at least 100 employees (not including part-time employees) or employers with 100 or more employees (including part-time employees) who work an aggregate of at least 4,000 hours per week (not counting overtime hours)
• Plant closures that result in an employment loss of 50 or more employees during a 30-day period require a minimum 60-day notice
• Mass layoffs not resulting from a plant closing that creates employment loss of at least 33 percent of active employees and at least 50 employees require a minimum 60-day notice
• Other

Employment loss is defined as any of the following:

• Employment termination (not including firing for cause, voluntary quitting, or retirement)
• Layoff lasting longer than 6 months
• More than a 50% reduction in hours during each month of a 6-month period

Layoffs and closures due to a faltering company, unforeseeable business circumstances, and natural disasters are exceptions to the 60-day advance notice.

Penalties for WARN Act Violations

A company found guilty of not complying with the provision of the WARN Act may be liable for back pay and benefits for each wronged employee for up to 60 days. A civil penalty of up to $500 for each day of violation is also possible.

Enforcement is through U.S. district courts. Individual or class-action lawsuits are permitted, and the court can award reasonable attorney fees to the winning party as part of its decision.

State-Level WARN Laws

Several states have passed their own versions of the WARN Act to supplement the federal legislation. California, Hawaii, Illinois, Iowa, Maine, New Hampshire, New Jersey, New York, Tennessee, and Wisconsin have state WARN notice requirements. The lawsuit against Twitter, filed in California where the company is headquartered, includes assertions that the Twitter layoffs also violated state law.

In 2021, House Bill 1034 was introduced in the Pennsylvania House of Representatives and referred to the Labor and Industry Committee.

The legislation would mandate Keystone State employers provide more notice than federal law requires. A plant closing affecting 50 or more employees or a mass layoff of 500 or more employees would trigger a minimum 180-day notice. Offending companies would be responsible for paying back pay and benefits to the impacted employees as well as a $500 per day civil penalty.

The City of Philadelphia has a municipal WARN Act that covers all businesses in the city with 50 or more employees.

Legal Counsel for State and Federal Regulation Compliance

Our team of employment law attorneys at Scaringi Law has experience in helping both sides of compliance matters. We represent employees who have been unfairly treated by employers who do not live up to their state or federal responsibilities including noncompliance and discriminatory practices. Our firm also advises employers on issues related to compliance, documentation, agreement enforcement, and other employment issues.

Are you an employer needing guidance to ensure compliance? Are you an employee who has been illegally fired or laid off? Scaringi Law can help. Contact us online or call (717) 775-7195 to schedule a consultation.