Elon Musk's X is hit with 2,200 arbitration claims from former Twitter employees
- X is facing more than 2,200 arbitration cases involving ex-employees, a new court filing said.
- Since Elon Musk's Twitter takeover, the company also has been hit with lawsuits from former staff.
The company had faced 200 arbitration cases in January — and now 2,000 additional cases have piled up, according to a court filing from a lawsuit involving a former Twitter employee. CNBC earlier reported on the legal filing.
Arbitration is an option for two parties having a dispute to bring in an independent mediator to help find a solution. It's handled privately and outside of court. It's not clear what all the arbitration claims against X are about, but if they follow the pattern of actual lawsuits that have been filed against the company, the claims are likely related to severance pay.
X, formerly known as Twitter, was hit with lawsuits from former employees after Musk cut the company's workforce in half. The billionaire began terminating Twitter employees within hours of taking over the social media company in October.
Since then, some employees have filed lawsuits, arguing that Twitter failed to pay out promised severance packages. In June, Shannon Liss-Riordan, an attorney involved in a proposed class-action lawsuit against the company, alleged that it had failed to pay out "tens of millions of dollars" worth of bonuses.
A spokesperson for X did not respond to a request for comment from Insider.
Meanwhile, the thousands of arbitrations cases could cost X at least $3.5 million in filing fees alone through a third-party arbitration service, CNBC estimated. And that's not including additional legal fees Musk's company could accrue, as well as the cost for any lawyers involved with the cases — and any potential financial penalties the company could face as a result of a private arbitrator's conclusion on a case.
Lawyers for X have said that the company didn't require workers to settle the issues through arbitration, so it shouldn't have to face the "larger portion of the filing fees," CNBC reported.
The number of arbitration cases against X was revealed in a motion to compel arbitration that was filed in the US District Court in Delaware on behalf of ex-Twitter employee Chris Woodfield.
The initial lawsuit from the former staff engineer was filed in July and alleged that X had failed to pay severance, as well as the fees required for the case to go into private arbitration, a process where companies use an impartial third party to resolve disputes.
Private arbitration typically allows companies to resolve disputes with employees out of the public eye and it can help employees avoid hefty legal fees.
It is a manner by which another of Musk's companies, Tesla, has handled sexual harassment and racial discrimination claims against Tesla as the company requires its employees to sign a mandatory arbitration agreement.
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