Twitter refuses to pay arbitration costs for 891 laid-off workers, lawsuit says | Hacker News Reader

Twitter refuses to pay arbitration costs for 891 laid-off workers, lawsuit says

arstechnica.com

76 points_djo_43 comments

On the low end, Twitter could end up paying hundreds of thousands—if not millions—of dollars if compelled into arbitration with thousands of employees who have already filed arbitration demands.

Ok, lets go way higher and say $5m

This is just another stalling tactic, proving Twitter isn't engaging in good faith. This company spends nearly $2B a year just on hosting. They don't give a f about $5m.

The claim that twitter spends 2B a year on hosting needs a very good source.

I rounded up but Elon says it's $1.5B/year: https://twitter.com/pandrewhk/status/1605494601673891840

Sadly the least reliable source.

That's a plausible number. Pre-Elon Twitter's ARPU was $4-5, with about 500M users. If Twitter pays $1.5B to support 0.5B users, they about break even after other costs.

ARPU is very deceptive for evaluating ad revenue since regions pay very differently, but OK for this purpose.

I mean we just learned this month that Twitter is paying hundreds of millions of dollars every year to Google Cloud (as part of the bill Elon decided he didn't want to pay) so is $2B really that strange, given that I also thought we knew Twitter isn't spending a majority of its money with Google?

https://www.bloomberg.com/news/articles/2023-06-21/twitter-r...

Regardless, I did a Google search for "twitter hosting costs" and it turns out Elon supposedly said on some call in December that they were spending $1.5B/year.

https://news.ycombinator.com/item?id=34116454

Maybe you don't trust that, but it was widely reported that he wanted it cut by $1B, so it would be difficult to square it up any other way at that point.

https://www.reuters.com/technology/musk-orders-twitter-cut-i...

Now, maybe we also generally don't trust Elon as a source for any of these numbers (and I am starting to become suspicious of his use of "1.5 billion" to mean "a lot, but specific enough to avoid sounding like an off the cuff lie"); but again: it doesn't seem strange given the other information we learned this month... and, frankly, since we are looking at Elon's decision not to pay $5M we simply get to analyze all other facts by accepting them from Elon if it undermines his own point as we are actually being charitable by accepting his own numbers and quoting them back to him.

So like, given that it took way more typing for you to throw shade/FUD at the $2B number than it did for me to get what I think is a more than reasonable level of verification, can you explain why your prior was so strong against this number that you felt that someone saying $2B was super unreasonable but you calling them out on it without any explanation is fine? It just sucks that it is so easy to make people doubt a fact with nothing more than a strong challenge for a source.

Pretty sure the 2 billion was when they had more data centers. Elon I think said recently that they have that cost down by close to half

...unless someone gets a judgement lien and hauls of an office full of gear.

Shouldn't this void the arbitration clause and allow it to be heard in court?

They'd pay for the finest white-shoe law firm to keep that from happening I'm sure.

Ok, but, quick question, what quality law firms out there are happily taking on a contact with a client with known issues not paying their contracts?

"Quality" being the explicit delineator?

Surely there aren't many powerful and good law firms who would lie to themselves and say, "Yeah, sure, Elon's not paying his bills, but whether or not I get him off the hook this time, he'll definitely pay me because otherwise I'll sue him, too?"

bankruptcy lawyers know how to get paid even when the company doesn't even have enough money for their debters and investors.

Court dates are what will make Tesla be sure to pay their lawyers on time.

A few million to a law firm now that could save paying tens of millions to laid-off employees later? That's a no-brainer for for the kind of company that considers non-payment to be an acceptable business practice to bully vendors into giving them better terms.

I'm quite ignorant of American arbitration laws, but don't these boards issue default judgements if one side refuses to participate?

Also, does anyone have any realistic numbers on how much losing would cost Twitter?

Arbitration isn't free. Someone has to pay for it. If the company won't pay for it, they aren't going to process a claim.

At this point it is kind of moot because if Twitter won't pay the fee, they obviously won't pay the judgement issued against them.

Then the executives and board members should face jail time and the company should be forced into bankruptcy.

Otherwise what prevents other companies from paying any of their obligations? This isn't the wild west, this needs to stop and right now.

Nothing honestly. You can take a number in the bankruptcy proceeding and find out with the rest of the claimants that there is not enough money to pay claims.

If there are no longer any repercussions then I would downgrade the Unites States as a place where one should invest. Theses kinds of shenanigans is what you have in developing nations and is the reason they face such high interest rates and reluctance from foreign investments.

Tesla, Apple, & Amazon and other huge companies are serial union busters. The NLRB gives them a stern finger shake each time. There are no consequences for treating your labor source poorly in the US

But doesn't that release the employee from the arbitration clause, so then then employee can sue Twitter in a real court?

Hopefully the courts in the future add some punitive punishment to twitter.

Previously Twitter went to court to dismiss a class action and force everybody to individually arbitrate and now that they had it dismissed they've decided to not arbitrate. Big waste of time and money that should be discouraged.

No, the employee signed an arbitration clause. They can't just pull a get out of jail free card.

The employer also signed an arbitration clause. They're the one breaking contract by refusing to pay for the arbitration they signed up to pay.

Sure, except the employer has legal counsel on retainer. You and I don't.

The lawyers are fronting the fees if Twitter won't which indicates they feel it's a pretty solid case IMHO.

Mandating arbitration and then refusing to participate in order to relieve yourself of financial obligations is obviously not socially sustainable, even if it's just to generate settlement leverage.

Presumably the arbitration judgement against them can be enforced in plain old ordinary court.

This was featured in an issue of Harvard Negotiation Law Review a while back. It states that (paraphrasing) that "If a party is concerned that they will suffer due to arbitration, then it can fail to pay the arbitrator. Tben the arbitrartor will report to the judge that the arbitration failed, and the judge will declare a mustrial." Note that the judge is not privy to the arbitration. Arbitration is agreed to by the parties, and then the judge orders ths parties into arbitration. IANAL

Arbitration is done by private companies. They don't work for free. Also, they are arguably employed by twitter. Default judgement against twitter would just lose them that client.

But does it matter, if this client is clearly not paying?

> While it seems like most employees terminated during Twitter's mass layoffs are struggling to hold Twitter accountable to employee agreements, at least one ex-employee recently secured a win against the penny-pinching social media company.

> Twitter has settled with software engineer Alexis Camacho, Bloomberg reported. This settlement comes after the National Labor Relations Board (NLRB) decided Camacho was "illegally punished" for her efforts rallying coworkers to protest Twitter owner Elon Musk's return-to-office mandate.

> An NLRB spokesperson, Kayla Blado, told Bloomberg that if Twitter didn't settle, the NLRB would have issued a complaint. Federal law protects workers' rights to discuss workplace conditions and take collective action.

> The terms of Twitter's settlement with Camacho have not been disclosed. However, Liss-Riordan represented Camacho, too, and she told Bloomberg she was "very pleased" with the "fair resolution" reached in this case.

Something to keep in mind for anyone subjected to RTO.

The truly bizarre part about this is Elon seems to want to save money by not spending it on office space. Surely he would be pro WFH ?

These are not logical decisions. It is about the power, not the logic [1] [2] [3]. You can't fight power with logic, only with more power (just as Musk had no choice but to complete the Twitter deal when the Delaware Court of Chancery wasn't going to let him walk away because of the poor deal he negotiated; he certainly tried though, as covered in excruciating detail by Bloomberg's Matt Levine).

High level, you're never going to be able to negotiate with folks at this level; they got there because of, very broadly speaking, the "dark triad" personality [4]. Therefore, you're only left with "higher authority" to keep them in check, such as government, law, etc.

[1] https://www.google.com/search?q=elon+control+freak

[2] https://www.newsweek.com/elon-musk-ex-wife-essay-alpha-alleg...

[3] https://www.cnbc.com/2018/10/19/tesla-ceo-elon-musk-extreme-...

[4] https://en.wikipedia.org/wiki/Dark_triad

(thoughts and opinions my own, as always; I am simply putting forth a thesis based on observations and data)

Seems pretty logical so far. Nuked 80 percent of the staff and they are putting out 5x as many features as they used to

The cost of office space for Twitter is negligible compared to their other costs. 1500 employees could fit in a handful of low-rise office buildings.

In any case, Musk can be pro-RTO for the same reason numerous other CEOs are: they have significant sums invested in commercial real estate, and don't want prices to enter a downward spiral.

That’s such an oversimplification. Apart from the lease, there’s insurance, staffing and maintenance at the very least. Security, infrastructure, equipment, utilities, and then the insurance and maintenance cost of that. The list is pretty long and it costs quite a bit. That’s why open office is so popular among higher ups. You can fit more people in the same building.

Not when you have leases that are 5 or 10 years for 7500 or 8000 employees, which is what they had before musk took over.

Commercial offices and real estate in big cities is fucking expensive. Like $100/year per square foot for nice office space at the peak. Each employee probably requires a minimum of 100sqft average to account for offices, conference rooms, etc. 10k x 1000 = 10m/year per 1k employees.

Figure like 1m or 2m a month per 1000 employees after you factor in all the other maintenance and required stuff for an office that size.

I would be surprised if they are not sitting anywhere from 70-100m/year of real estate costs.

Maybe 30-60m/year if they didn’t build out office space for their employees hired during the pandemic or got fantastic lease terms (which if they did, they would probably be subletting at a profit).

If you want to break your lease, in this commercial real estate market, guess what? Tough shit. You can pay the lease in its entirety or sublet the space.

$100m/yr for office costs are high, assuming these bills are actually being paid everywhere. They've been evicted from their Colorado office and have been sued for not paying rent at a SF office,[0]

Either way, it pales in comparison to the $300m/qtr they're on the hook for for interest payments to banks that financed $13bn of the deal.

[0]https://globalnews.ca/news/9385713/twitter-overdue-rent-san-...

Wow, they owe $1.2 billion US just in interest each year? I knew the terms were nuts, but I had no idea it was that bad.

Just because they have been evicted doesn’t mean they aren’t responsible for the remainder of the lease.

Like when he tried to not close the twitter deal, just because you don’t wanna pay doesn’t mean you can arbitrarily back out of a contract.

OK, but having millions in accounts payable is not the same as actually having it flow out of the company and hit your operating cash reserves.

That's what happening with their loan payments, at a significantly higher scale than vendors they simply haven't paid, and are hoping to shake down for better terms.

This is insanity. Have legal contracts no meaning any more? Is America not ruled by laws? WTH is happening?

It's only insanity if the courts can't provide an equitable remedy. What's happening is that Twitter is operating in bad faith, and the usual legal system will force them to do what they're supposed to do. That's normal. Twitter's behavior is outside of normal, but the overall system is functioning just fine.

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