This article focusses on the procedural mess Musk has gotten Twitter in to. But it skips over something more important.
Former Twitter employees have suffered real harm. They deserve justice either via courts or arbitration to get back pay, expense reimbursements, and severance that they were promised. It's a shame that Musk has stripped the company down so much it can't respond to legal requests. It's a shame that the pre-Musk Twitter's binding arbitration means that the company now has a lot of arbitration cases to handle. The ex-employees deserve a fair and rapid hearing regardless. That, or a summary judgement if the company can't respond to the claims of the people it fired in a timely fashion.
Additional sad part is that Musk has been pulling that stuff for a long long time. Tesla is known for having very unhealthy relationships with suppliers (that includes not paying bills), factories have management approved racism running rampant, etc.
And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently.
> And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently.
No, it wasn't in response to that. I don't understand this sort of deliberate misinterpretation. It happened because the world rewards production. For example, Tesla jump-started the world's EV movement, and leads it by volume. SpaceX means the US aren't currently trying to get a Russia that it's in a proxy war with to take its astronauts to the ISS.
>>Tesla is known for having very unhealthy relationships with suppliers
That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times.
Musk seems to have a very tech bro way of handling things. "Don't tell me what can't be done. You're just stuck thinking inside the box."
Sometimes you are in the box, and if you don't recognize it, you smash into it. We valorize the people who break out and accomplish great things that were thought impossible, but we never get to hear about the things that actually were impossible.
More importantly, the people who did were often more lucky than smart. Over and over we see the ones who got rich and famous screw up everything they try after that.
Musk succeeded more than once, and was surely smart as well as lucky. But that's exactly the kind of situation that convinces you that you're the only smart one because nobody else did it.
The world will not stop while he figures out how to deal with the colossal ramifications of his own actions. And that will cost him even more.
> The world will not stop while he figures out how to deal with the colossal ramifications of his own actions. And that will cost him even more.
It seems unlikely the company will ever turn a profit. It's crumbling under the weight of its own infrastructure (some question how it even still runs!).
Rumor has it they lacked the manpower to actually keep the API running and scrapping it was a last-ditch attempt at getting rid of bots. Same bots who flocked to the platform after the layoffs started since people in charge of mitigating these were fired.
Firing abuse and content moderation teams meant there was a lot more unsavory spam on the platform and advertisers didn't want any of it near their brand. In a few week Twitter lost half of it's top 100 biggest advertisers [0] and it doesn't seem they are coming back.
At this point, I'm wondering if not paying former employees, rent and cloud bills is a way of getting the company bankrupt with litigation, so he can later claim that it wasn't his fault that it went down but "all the rent-seekers conspiring against him".
To be fair, there were a lot of non-technical or "tech-adjacent" people from third tier business schools who seemed to think Musk was a genius for firing most of his "overpaid underproductive programmers" and will desperately try to imitate his every moves (probably trying to play the same games with employee severance and cloud bills). It'll be hilarious to see them crash and burn in the coming years (see Holmes, the Jobs copycat currently serving her sentence).
I think Charlie Munger (Berkshire Hathaway cochairman) describes Musk the best saying that Musk is a person with a 150 IQ thinking he's a 170 IQ which makes him both very bold and dangerous.
> We valorize the people who break out and accomplish great things that were thought impossible
Even then a lot of things aren't literally impossible and no one thinks they're literally impossible, it's just to make it happen requires a billion dollars. Unless you've got a billion dollars such things are practically impossible.
The spectrum of possible things is highly dependent on how much money you've got available. Even big companies don't necessarily have a billion dollars to spend on some new endeavor.
I find it disingenuous to throw around the word "impossible". Impossible is building cars out of ground up unicorn horns or magic dragon egg shells. Building marketable electric cars was never impossible. It just required money up front with a long horizon to build a business rather than return profits right away.
We'll see. From my perspective, this is a case where Musk acted with extremely well-publicized malice towards his employees, and towards the very company he bought, to the point that it may not even be able to pay the severance those employees are due. Musk has been talking about bankruptcy; a maneuver that could be used to void those debts.
Should that happen, I want this case to pierce the corporate veil; for those payments (plus legal fees and damages) to come directly out of his pockets. But piercing the corporate veil seems like a bit of a long shot from what I've read of it.
Curiously, twitter corp (california) does not exist, it was merged into X corp (nevada). California is apparently quite liberal with respect to piercing the corporate veil, Nevada is not: another maneuver to protect his pockets.*
Make no mistake, Musk is smart. He's just not the "engineer an electric car and a rocket all by himself" smart that people got so worked up about. He's smart like Trump is smart: he looks out for #1 and knows exactly how to use his wealth to maximize his opportunity to keep playing the game.
Musk is also reportedly (as per Puck) refusing to pay JAMS (it's about $3.5mm in filing fees alone for 2K two-party arbitrations, and he's going to spend many multiples of that on attorney fees), so if he makes arbitration impossible through nonpayment then those employees are also going to have to take him to court to either enforce arbitration or allow removal to the court system. Just a clusterfuck on every conceivable level.
California changed the law a few years back where if the party that requires arbitration (in almost all cases, the company) doesn't pay their portion, it's an automatic default on their part.
> It's a shame that Musk has stripped the company down so much it can't respond to legal requests.
I don't see any evidence of this here. The "Twitter Lawyers" being referenced here work for Morgan Lewis, a big law firm. The issue is not the inability to respond to the requests, but the duplication of efforts.
If Twitter is found in the wrong what recourse do former employees have if Musk refuses to pay? The court system would allow bailiffs to be sent to Twitter premises in order to start seizing property. Would arbitration afford the plaintiffs that same right?
yes.. after you get an arbitration award, you can file in court to get an enforcement order.
Once arbitration is over, if there was egregious misconduct during arbitration, you can have a court throw it out. It has to be pretty bad -- like bribery of the arbitrator... otherwise, the court will just sign off on the enforcement order.
Not mentioned in the article: Twitter asked for this. The plaintiffs filed a class action lawsuit, and Twitter got it thrown out a few months ago.. saying each plaintiff needed to file an arbitration claim.[0]
Now they want to group depositions and other over lapping work to save money... what they're really asking is for plaintiffs to cooperate with Twitter's attempt to pick and choose which parts of a class action claim Twitter would like to take advantage of while depriving the other side of the same.
Twitter is big enough to hire more lawyers. Musk's stinginess is not a problem the plaintiffs need to handle.
It's a common tactic by lawyers to bury opposing counsel with mounds of paperwork that is used to overwhelm or bury a smoking gun. Seeing the Twitter legal team overwhelmed from the reverse of a thousand paper cuts type of situation is pretty funny from my chair. The popcorn is quite tasty.
Some workers tried to start a class action lawsuit, and DoorDash argued that it should be dismissed because according to their contract the workers had a duty to arbitrate.
Then when workers actually tried to arbitrate DoorDash tried to get that replaced with a class action.
Judge Alsup would have none of that crap:
> The employer here, DoorDash, faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order.
Workers aren’t weaponizing forced arbitration, they have no leverage over DoorDash. DoorDash has to deal with the consequences of their decision to require forced arbitration, they are the party with power to dictate terms in the company/worker relationship. They brought it on themselves by not managing risk.
> Seeing the Twitter legal team overwhelmed from the reverse of a thousand paper cuts type of situation is pretty funny from my chair. The popcorn is quite tasty.
Get ready for the strategic bankruptcy where all of these cases are sucked into the bankruptcy court and settled on terms favorable for Twitter's survival.
I’m with you there. I feel for employees who got ripped off by Twitter refusing to honor their agreements, and that part’s not funny at all, but this turn of events is delightful.
I wonder if California’s labor department will end up involved at all. It seems like withholding pay would end up being something they’d rub their hands in glee at the thought of fixing.
I can't imagine that a deposition lasts more than a few hours and there are only 1,986 claims so Elon should be finished with it in a mere 248 days, assuming he doesn't eat drink or sleep for those 8 months...
"I can't imagine that a deposition lasts more than a few hours..."
Heh. No. A good litigator will be prepared with enough questions to keep him testifying for most of the day on each case. No doubt there will be many objections along the way that will stretch that time out even more. There's zero chance that the boss's testimony (and Twitter's other corporate witnesses) will be consistent even in a single deposition, let alone 100s. Even the most craven arbitrator is going to have a hard time ignoring that, so the strategy will reap huge, literal, rewards. With costs and attorneys fees.
> Apparently Twitter’s lawyers hasn’t met with the other law firms that have brought arbitration claims yet. But, it seems they’re freaked out by the prospect of having to handle 1,848 separate discovery efforts.
Separate but largely identical discovery efforts, surely? That sounds like a job for one of the leftover devs (who by now must all be extremely hardcore rockstars sleeping in the office, since Elon fired everyone else) to generate 1848 separate zip files of documentation.
Based upon one of the letters sent by one of the law firms to Twitter[1] it seems that the arbitration agreement requires filing a separate individual arbitration agreement? "with each employee filing a separate individual agreement, as required by the terms of your arbitration agreement"?
It seems like Twitter's own arbitration terms is going to be the thing that hurts them here?
If these were before a court then Twitter could try and have them combined into a class action suit. Twitter's contracts with these employees included arbitration clauses though. Normally companies prefer this because it heads off class action suits, but here Twitter has been hoist with his own petard. Twitter demanded the arbitration and now is paying the cost for that.
Bottom line is because arbitration is a bilateral process between the parties to a contract, both sides would need to agree to turn it into a collective arbitration. A class arbitration would be if one representative of the class took action on behalf of everyone (who didn't opt out) of that class.
Musk’s MO is to use the legal system in bad faith. That’s his primary tactic. He even does this with his vendors and his customers. With his vendors he just stops paying and then waits until legal action is threatened and then tries to negotiate a deal. With his customers an example are the solar roof customers where he tried to double the costs even with a signed contract and threatened them until the customers signed a new contract agreeing to pay double the costs.
So the opponents to twitter should use this to show that musk is always trying to have his cake and eat it too so that their request for consolidation of discovery can be denied.
How is this relevant to what they said? They are not one of the two parties involved so they don’t fall into the “other side”, you’re just trying to dilute the argument.
From the outside this looks like a pretty clear-cut breach of contrast on Elon's part. Would be interesting to see what the counter-argument from Twitter's legal team will be and what kind of decision arbitrators will make.
I'm guessing that since this is arbitration and not a trial we won't get to know many of these details.
This lawyer is maximum snark. Which must mean he is an idiot or supremely confident the law is on his side.
"...Twitter then communicated that promise to each of its employees by email and in its Acquisition FAQ, and detailed in writing what they could expect in severance if they statyed through the merger and were laid off: a minimum of two months of salary, accelerated vesting of their RSUs (paid in cash at $54.20 a share), payment of their pro-rated bonuses, and continued contribution to their healthcare. Instead, the severance and benefits you've since offered in various iterations - in your first communication to the laid of employees in your FAQ communications to employees who didn't "click the button" in your second round of layoffs - falls far, far short of your promises: one month of salary, no bonus, no accelerated vest, and no contribution to healthcare."
"...The doctrine of promissory estoppel means that Twitter can't promise its employees a severance package to get them to stay at the company through the merger, and then renege on that promise once they do. Your insistence on including that "no third party beneficiaries" clause in Section 6.9(e) suggests that you were always planning on playing this game, so we'll be including a cause of action for fraud in our arbitration demands - and seeking punitive demands on top of pre- and post-judgement interest".
Readit News
Former Twitter employees have suffered real harm. They deserve justice either via courts or arbitration to get back pay, expense reimbursements, and severance that they were promised. It's a shame that Musk has stripped the company down so much it can't respond to legal requests. It's a shame that the pre-Musk Twitter's binding arbitration means that the company now has a lot of arbitration cases to handle. The ex-employees deserve a fair and rapid hearing regardless. That, or a summary judgement if the company can't respond to the claims of the people it fired in a timely fashion.
And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently.
No, it wasn't in response to that. I don't understand this sort of deliberate misinterpretation. It happened because the world rewards production. For example, Tesla jump-started the world's EV movement, and leads it by volume. SpaceX means the US aren't currently trying to get a Russia that it's in a proxy war with to take its astronauts to the ISS.
That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times.
Dead Comment
Sometimes you are in the box, and if you don't recognize it, you smash into it. We valorize the people who break out and accomplish great things that were thought impossible, but we never get to hear about the things that actually were impossible.
More importantly, the people who did were often more lucky than smart. Over and over we see the ones who got rich and famous screw up everything they try after that.
Musk succeeded more than once, and was surely smart as well as lucky. But that's exactly the kind of situation that convinces you that you're the only smart one because nobody else did it.
The world will not stop while he figures out how to deal with the colossal ramifications of his own actions. And that will cost him even more.
I kind of agree with everything, but this.
Rich people usually don't have to pay, that's how it works. That's also probably why they don't learn, in many cases.
It seems unlikely the company will ever turn a profit. It's crumbling under the weight of its own infrastructure (some question how it even still runs!).
Rumor has it they lacked the manpower to actually keep the API running and scrapping it was a last-ditch attempt at getting rid of bots. Same bots who flocked to the platform after the layoffs started since people in charge of mitigating these were fired.
Firing abuse and content moderation teams meant there was a lot more unsavory spam on the platform and advertisers didn't want any of it near their brand. In a few week Twitter lost half of it's top 100 biggest advertisers [0] and it doesn't seem they are coming back.
At this point, I'm wondering if not paying former employees, rent and cloud bills is a way of getting the company bankrupt with litigation, so he can later claim that it wasn't his fault that it went down but "all the rent-seekers conspiring against him".
To be fair, there were a lot of non-technical or "tech-adjacent" people from third tier business schools who seemed to think Musk was a genius for firing most of his "overpaid underproductive programmers" and will desperately try to imitate his every moves (probably trying to play the same games with employee severance and cloud bills). It'll be hilarious to see them crash and burn in the coming years (see Holmes, the Jobs copycat currently serving her sentence).
[0] https://www.businessinsider.com/twitter-lost-half-top-advert...
Even then a lot of things aren't literally impossible and no one thinks they're literally impossible, it's just to make it happen requires a billion dollars. Unless you've got a billion dollars such things are practically impossible.
The spectrum of possible things is highly dependent on how much money you've got available. Even big companies don't necessarily have a billion dollars to spend on some new endeavor.
I find it disingenuous to throw around the word "impossible". Impossible is building cars out of ground up unicorn horns or magic dragon egg shells. Building marketable electric cars was never impossible. It just required money up front with a long horizon to build a business rather than return profits right away.
We'll see. From my perspective, this is a case where Musk acted with extremely well-publicized malice towards his employees, and towards the very company he bought, to the point that it may not even be able to pay the severance those employees are due. Musk has been talking about bankruptcy; a maneuver that could be used to void those debts.
Should that happen, I want this case to pierce the corporate veil; for those payments (plus legal fees and damages) to come directly out of his pockets. But piercing the corporate veil seems like a bit of a long shot from what I've read of it.
Curiously, twitter corp (california) does not exist, it was merged into X corp (nevada). California is apparently quite liberal with respect to piercing the corporate veil, Nevada is not: another maneuver to protect his pockets.*
Make no mistake, Musk is smart. He's just not the "engineer an electric car and a rocket all by himself" smart that people got so worked up about. He's smart like Trump is smart: he looks out for #1 and knows exactly how to use his wealth to maximize his opportunity to keep playing the game.
* Edit: it gets even juicier from there. He's apparently trying to keep the shareholders of X Holdings secret, going so far as to redact his own name from the list! https://www.techdirt.com/2023/06/12/twitter-reveals-that-x-h...
aka psychopath.
Dead Comment
It's a strategy but not a good one.
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I don't see any evidence of this here. The "Twitter Lawyers" being referenced here work for Morgan Lewis, a big law firm. The issue is not the inability to respond to the requests, but the duplication of efforts.
Once arbitration is over, if there was egregious misconduct during arbitration, you can have a court throw it out. It has to be pretty bad -- like bribery of the arbitrator... otherwise, the court will just sign off on the enforcement order.
Deleted Comment
Dead Comment
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Idk what actual claim they have
Good thing TFA clearly states that Musk is stiffing them on their severance...
Now they want to group depositions and other over lapping work to save money... what they're really asking is for plaintiffs to cooperate with Twitter's attempt to pick and choose which parts of a class action claim Twitter would like to take advantage of while depriving the other side of the same.
Twitter is big enough to hire more lawyers. Musk's stinginess is not a problem the plaintiffs need to handle.
0. https://www.theverge.com/2023/1/16/23557210/twitter-workers-...
https://www.theverge.com/2021/6/1/22463550/amazon-lawsuit-ar...
https://www.theverge.com/2020/2/12/21135474/doordash-workers...
https://news.bloomberglaw.com/daily-labor-report/postmates-d...
Some workers tried to start a class action lawsuit, and DoorDash argued that it should be dismissed because according to their contract the workers had a duty to arbitrate.
Then when workers actually tried to arbitrate DoorDash tried to get that replaced with a class action.
Judge Alsup would have none of that crap:
> The employer here, DoorDash, faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order.
Get ready for the strategic bankruptcy where all of these cases are sucked into the bankruptcy court and settled on terms favorable for Twitter's survival.
I wonder if California’s labor department will end up involved at all. It seems like withholding pay would end up being something they’d rub their hands in glee at the thought of fixing.
Deleted Comment
Heh. No. A good litigator will be prepared with enough questions to keep him testifying for most of the day on each case. No doubt there will be many objections along the way that will stretch that time out even more. There's zero chance that the boss's testimony (and Twitter's other corporate witnesses) will be consistent even in a single deposition, let alone 100s. Even the most craven arbitrator is going to have a hard time ignoring that, so the strategy will reap huge, literal, rewards. With costs and attorneys fees.
Separate but largely identical discovery efforts, surely? That sounds like a job for one of the leftover devs (who by now must all be extremely hardcore rockstars sleeping in the office, since Elon fired everyone else) to generate 1848 separate zip files of documentation.
It seems like Twitter's own arbitration terms is going to be the thing that hurts them here?
[1] https://twitter.com/AkivaMCohen/status/1598487532764798983/p...
Bottom line is because arbitration is a bilateral process between the parties to a contract, both sides would need to agree to turn it into a collective arbitration. A class arbitration would be if one representative of the class took action on behalf of everyone (who didn't opt out) of that class.
Deleted Comment
So the opponents to twitter should use this to show that musk is always trying to have his cake and eat it too so that their request for consolidation of discovery can be denied.
I'm guessing that since this is arbitration and not a trial we won't get to know many of these details.
I don’t think this would be such a lengthy affair anywhere but the US.
Dead Comment
"...Twitter then communicated that promise to each of its employees by email and in its Acquisition FAQ, and detailed in writing what they could expect in severance if they statyed through the merger and were laid off: a minimum of two months of salary, accelerated vesting of their RSUs (paid in cash at $54.20 a share), payment of their pro-rated bonuses, and continued contribution to their healthcare. Instead, the severance and benefits you've since offered in various iterations - in your first communication to the laid of employees in your FAQ communications to employees who didn't "click the button" in your second round of layoffs - falls far, far short of your promises: one month of salary, no bonus, no accelerated vest, and no contribution to healthcare."
"...The doctrine of promissory estoppel means that Twitter can't promise its employees a severance package to get them to stay at the company through the merger, and then renege on that promise once they do. Your insistence on including that "no third party beneficiaries" clause in Section 6.9(e) suggests that you were always planning on playing this game, so we'll be including a cause of action for fraud in our arbitration demands - and seeking punitive demands on top of pre- and post-judgement interest".
Holy shit, the spice levels here are off the charts. This isn't the level of swagger I expect to read in a legal letter.