Why it may not matter whether Elon Musk broke US labor laws with his mass firings at Twitter

About a week after the 2022 October 28 When Elon Musk took over Twitter, the social media platform sparked a firestorm of controversy by suddenly laying off roughly half of its 7,500 employees.

Within days, according to media reports, the company asked some recently retired employees to continue, adding to the overall impression of lax management. Musk’s approach as an employer also raises an important question about US labor rights: Is it legal to fire thousands of workers with little or no warning?

Courts may be able to weigh in, as several of those mass layoffs have already filed class action lawsuits. They say Twitter violated federal and state laws by not notifying them in advance.

However, as a scholar of labor law and policy, I believe that Twitter’s new management team probably won’t face many legal ramifications for laying off half of its workforce. That’s because “at-will employment” — where employers can fire an employee at any time for any legal reason while their employees are also free to quit without facing legal consequences — is a cornerstone of U.S. labor law.

The birth of at-will work

Courts began to establish the at-will doctrine in the 19th century, making exceptions only for employees with fixed-term contracts. In Payne v. Western & Atlantic Railroad Co., the Tennessee Supreme Court held that a railroad foreman in Chattanooga had the right to prohibit his employees from buying whiskey from a merchant named L. Payne.

Payne sued the railroad, arguing that it could not threaten to fire employees to discourage them from buying goods from a third party. The court disagreed, saying that a railroad has the right to fire employees for good, bad reason, or any reason at all — even with an independent trader.

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Soon, the concept of at-will employment and the associated lack of job protection rose to the level of a constitutional mandate. in 1894 The Pullman strike, which disrupted national rail traffic, led Congress to pass the Erdman Act four years later. That law guaranteed the right of railroad workers to unionize and join unions and participate in collective bargaining.

The Supreme Court overturned this law in 1908. Writing for the majority in Adair v. United States, Justice John Marshall Harlan explained that employers are free to use their property as they please and to set and enforce their own work rules. Employees, in turn, were free to terminate the relationship. He summarized the law as follows:

“The right of an individual to sell his labor on such terms as he thinks fit is essentially the same as the right of a purchaser of labor to determine the terms on which he will accept such labor from the person offering it for sale.” this”.

That may sound reasonable, but the Adair decision led to the proliferation of “yellow dog” contracts that threaten to fire workers if they join or organize unions. The term “yellow dog” was scorned by people who were willing to accept such terms, but the principle gained widespread legal acceptance.

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For three decades, the doctrine of will has prevented legislation that would protect labor rights. Even when a manager unsuccessfully tried to seduce an employee’s longtime wife and fired the employee in retaliation, the courts refused to protect the husband from losing his job.

Labor rights and US law

in 1935 with the passage of the National Labor Relations Act, all private sector workers and their unions gained the power to bargain collectively with their employers. Later labor agreements, such as the 1937 The Steelworkers’ Organizing Committee with Carnegie-Illinois Steel forced employers to show “just cause” before firing anyone covered by the contract.

1964 and 1991 Civil rights laws added employment protections prohibiting discrimination based on race, sex, religion, and national origin. The Americans with Disabilities Act, passed by Congress in 1990, prohibited employment discrimination against “qualified people” with disabilities.

Since then, the federal government and some states have passed additional laws that can protect workers from mass layoffs.

The Worker Adjustment and Retraining Act of 1989 is important. Commonly known as the WARN Act, it requires employers of 500 or more people to provide written notice to employees within 60 days of a mass layoff. When an employer violates this law, employees who do not receive the required advance notice can sue for up to 60 days of back pay and benefits. Employers may also have to pay fines.

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Some states have similar laws on their books, including California, where Twitter is headquartered.

Former Twitter employees suing the company for damages allege that Twitter failed to provide the necessary legal notice before being fired, as required by the federal and California WARN Acts.

But Musk tweeted that the dismissed employees will receive severance pay in the amount of three months’ salary.

Contractual arrangements between employers and their employees, such as trade union agreements, may provide protection by giving preference to seniority. In the absence of such contracts, employees must rely on legal protections.

Little legal aid

Under Musk’s leadership, Twitter reportedly didn’t match the severance packages it offered to laid-off employees.

It is unclear whether all US workers were offered the legally required 60 days of compensation. Widespread reports also indicate that Twitter required the fired employees to sign documents releasing Twitter from any claims against the company.

Given the circumstances, I think it’s unlikely that the ex-employees suing Twitter will prevail. The U.S. Department of Labor offers advice and services to workers who believe their employers failed to comply with WARN Act requirements. However, these tools provide only limited assistance, such as guidance on unemployment insurance.

Unfortunately, there are few legal options available to fired Twitter employees who refuse what Musk will offer them when they quit their jobs.

Part of this article appeared in an earlier article published in 2021. July 13


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