X, formerly Twitter, is grappling with 2,200 arbitration cases by former employees after Elon Musk’s tumultuous acquisition.
The sheer volume of arbitration cases could lead to filing fees totaling approximately $3.5 million.
It was revealed in a recent filing for the case of Chris Woodfield v. Twitter, X Corp., and Elon Musk in a Delaware district court.
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The lawsuit concerns Woodfield, a former senior staff network engineer based in Twitter’s Seattle office.
Woodfield alleges Musk’s Twitter, now operating as X, initially promised but failed to pay his severance.
Furthermore, the delay in alternative dispute resolution was attributed to X’s failure to cover the required fees for JAMS arbitration proceedings.
JAMS, an arbitration service provider, charges a standard filing fee of $2,000 for two-party matters.
However, in cases where arbitration is a condition of employment, employees are responsible for a reduced fee of $400.
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With JAMS applying this fee uniformly to X’s 2,200 arbitration cases, it amounts to an estimated $3.5 million, with additional fees potentially arising.
X’s legal team contends the company didn’t mandate staff to exclusively resolve disputes through arbitration.
It makes them ineligible for covering most of the filing fees.
Former staff pushing for trials
Meanwhile, Woodfield and others in similar situations attempt to exit arbitration proceedings and move their cases to trial.
Many large corporations, where legally permitted, require employees to sign arbitration agreements upon hiring.
This necessitates employees obtaining a judge’s exemption to speak freely in a public court, as their statements could become part of the public record.
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Critics argue that arbitration fosters secrecy and obscures how companies handle employee issues and past cases.
Proponents assert arbitration offers an efficient means for companies and employees to address disputes without subjecting employees to substantial attorney’s fees, especially if their cases are unsuccessful.
The Woodfield case against Musk’s X Corp. resembles another proposed class-action lawsuit filed in a San Francisco federal court, Ma v. Twitter, in the Northern District of California.
In this case, former Musk-era Twitter employees allege that after compelling employees to agree to arbitration in exchange for severance, delayed over 891 arbitration cases by failing to cover the required filing fees.
