In this photo illustration, the new Twitter logo rebranded as X (X Corp.) is seen on a smartphone and Elon Musk Twitter account with the new X logo on a pc screen.
Pavlo Gonchar | Lightrocket | Getty Images
X, the social network formerly known as Twitter, is facing 2,200 arbitration cases that ex-employees filed after Elon Musk took over the company, slashed headcount, and made other sweeping changes there. The filing fees alone for that volume of cases could amount to $3.5 million.
The arbitration numbers were revealed in a new filing out Monday as part of a lawsuit in a Delaware district court. The case is Chris Woodfield v. Twitter, X Corp. and Elon Musk (No. 1:23-cv-780-CFC).
Woodfield, a former senior staff network engineer who had worked at Twitter’s Seattle office, alleges in his suit that Musk’s Twitter (now known as X) had promised then failed to pay his severance, and later delayed alternative dispute resolution by failing to pay the necessary fees required for him to move ahead in the JAMS arbitration system.
According to the website for JAMS, “For two-party matters, the Filing Fee is $2,000,” and “For matters based on a clause or agreement that is required as a condition of employment, the employee is only required to pay $400.”
Since JAMS decided that this basic fee applies across the board to X’s 2,200 arbitration cases, that would amount to around $3.5 million, with other fees possibly to follow.
The company’s lawyers have argued that it did not mandate employees to resolve any issues in arbitration, so it should not be on the hook for the larger portion of the filing fees.
Meanwhile, Woodfield and others in a similar situation are trying to get out of arbitration and move their cases to trial.
As CNBC has previously reported, many large corporations require workers to sign an arbitration agreement upon employment wherever it is legal to do so. This means to speak freely in court, where their speech can become part of a public record, workers would first need to get an exemption from a judge.
Critics view arbitration as a secretive system that makes it harder for employees and prospective hires to find out how companies treat their workers, and what happened to people in previous related cases.
Proponents view arbitration as a way for companies and employees to resolve their issues efficiently without leaving employees on the hook for massive attorney’s fees, especially if they lose their case.
The Woodfield case against Musk’s X Corp. resembles another proposed class action filed in a San Francisco federal court.
In that case, Ma v. Twitter, in the Northern District of California (No. 3:23-cv-3301), ex-employees of Musk-era Twitter allege that the company delayed at least 891 arbitration cases by failing to pay required filing fees after compelling employees to agree to arbitrate their disputes in exchange for severance.