Twitter WARN Act Layoff Plaintiffs Sent to Arbitration

Judge James Donato issued a five-page opinion late last week sending the named plaintiffs prosecuting a California and federal Worker Adjustment and Retraining Notification Act (WARN Act) case against Twitter Inc. to arbitration.

The decision found that because the five named plaintiffs did not opt out of the arbitration provisions of their employment contracts, their cases had to be sent to the parajudicial forum for adjudication on an individual basis.

The suit will continue, however, against three additional plaintiffs whose names were recently added to the lawsuit and who say they opted out of the mandatory arbitration clause.

After Elon Musk took the reins at Twitter, former employees filed suit alleging that the company failed to give workers written advance notice of layoffs 60 days prior to their effect. In mid-December Judge Donato ordered Twitter to notify employees presented with severance agreements of the case, deeming the scenario “textbook … for providing notice of a pending class action lawsuit.”

For its part, Twitter has filed several motions, including a motion to compel arbitration as well as a motion to dismiss or transfer venue. The latter was mid-briefing when Judge Donato ruled that the original plaintiffs had to submit to arbitration.

In shifting the case to arbitration, Judge Donato rejected the plaintiffs’ main argument that the arbitration agreements are unconscionable. The court said the plaintiffs did not show that each contracts’ delegation clause was “invalid or otherwise does not encompass their unconscionability claims in order to litigate in this forum.”

Judge Donato addressed an additional issue concerning the enforceability of the class action waiver, which the plaintiffs challenged on grounds that it precludes them from bringing representative actions under the California Private Attorneys General Act of 2004 (PAGA). The court wrote that the basis underlying the objection was “unclear” as the operative complaint does not state a PAGA claim and concluding that at present, the PAGA waiver has no bearing on going to arbitration.

The plaintiffs and putative class are represented by Lichten & Liss-Riordan P.C. and Twitter by Morgan Lewis.