Elon Musk's X has reached a settlement in a lawsuit brought forth by former Twitter employees who alleged they were denied severance pay during a significant workforce reduction carried out by Elon following his acquisition of the social media platform last year.

Settlement discussions are scheduled for early December, marking an important development amidst a series of lawsuits facing Elon as he works on reshaping the platform into an all-encompassing app.

X has agreed to address the claims of nearly 2,000 former employees who were affected by the mass layoff last year.

These former employees assert that they were not provided with the severance pay they were entitled to, alleging various violations of labor laws and regulations.

Initially, former employees resorted to arbitration to pursue their claims, as the company had demanded.

However, the legal counsel for the plaintiffs, Shannon Liss-Riordan and her team, expressed frustration at Twitter's lack of responsiveness over nearly a year.

She wrote in the memo to her clients but declined to elaborate or comment specifically on the scheduled mediation:

"After 10 months of pressing them in every direction we have succeeded in getting Twitter to the table. Twitter wants to mediate with us in a global attempt to settle all claims we have filed…We are very proud to be representing nearly 2,000 former Twitter employees, in individual arbitrations as well as more than a dozen class action lawsuits in court…We are working hard to recover what they are owed."

How Did The Lawsuit Against X Came About?

The decision to engage in mediation follows a series of developments in the legal dispute.

Several months ago, Twitter faced allegations of refusing to cover the costs associated with arbitration, despite mandating former employees to pursue this route instead of pursuing lawsuits.

Shannon has initiated multiple class-action lawsuits on behalf of former Twitter employees and vendors who claim that Elon's entity failed to fulfill its financial obligations.

One such lawsuit, filed in November 2022, asserted that Twitter violated federal and California Worker Adjustment and Retraining Notification (WARN) Acts, which mandate a 60-day advance notice before a mass layoff.

The lawsuit sought financial restitution, contending that employees affected by the layoffs did not receive severance pay or the required notice.

In January 2023, a federal judge ruled in favor of Twitter's motion to compel plaintiffs into arbitration, citing that the former employees had not opted out of the company's arbitration agreement.

While the class-action lawsuit continued with ex-employees who had opted out of Twitter's arbitration requirement, Shannon initiated numerous arbitration proceedings on behalf of individuals impacted by Twitter's layoffs.

In July, Shannon filed a lawsuit, alleging that Twitter had refused to cover arbitration expenses despite previously mandating that ex-employees resolve their claims through arbitration rather than litigation.

The lawsuit, filed in the United States (US) District Court for the Northern District of California, claimed that "Twitter has refused to engage in arbitration—despite having compelled employees to arbitrate their claims."

When Will The Negotiations For The 2,000 Odd Former Twitter Staff Be Held?

In response to a court order, X has agreed to engage in settlement negotiations, as confirmed by sources familiar with the situation.

The private negotiations are scheduled for 1 and 2 December, involving Shannon and others representing almost 2,000 former Twitter employees in individual arbitration cases and over a dozen class-action lawsuits.