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Twitter’s Layoffs and “Hardcore Work Environment” Letter Raises Questions

The recent layoffs at Twitter and the follow-up letter advising of a "hardcore" work environment have led to conversations around the legality of what Elon Musk did in his first week on the job and the unintended consequences around HR compliance, employee morale and where Twitter goes from here.

OneDigital HR compliance and consulting experts break down and discuss what this could mean for Twitter's future.

The Question of Compliance:

In one of Elon Musk's first moves as the owner of Twitter, he swiftly laid off approximately 3,700 employees, or close to 50% of its workforce. Employers who look to make significant changes very quickly are probably wondering if it is possible to move as quickly as Twitter without any unintended consequences. The short answer is – to be careful.

A major piece of federal law that governs how employees are informed of mass workplace terminations and plant closings is the Worker Adjustment and Retraining Notification Act (WARN Act). The law intends to provide employees with advance notice of layoffs and plant closings to plan for re-employment. The WARN Act requires employers with 100 or more employees to provide at least 60 calendar days advance written notice of a plant closing and mass layoff affecting 50 or more employees at a single employment site. Employees entitled to notice include hourly and salaried workers, managers, and supervisory employees.

The WARN Act has different notice requirements based on the number of employees affected and the nature of the termination event, including plant closings, mass layoffs, and the sale of part or all of a business. In the event of a mass layoff, an employer must give notice if the layoff will result in the loss of employment for 500 or more employees during any 30 days or for 50-499 employees if they make up at least 33% of the employer's active workforce. Employers contemplating a mass layoff do not have to count employees who have worked less than six months in the last 12 months or those who worked an average of fewer than 20 hours per week.

But wait, there's more. Several states around the country have their versions of the WARN Act, usually called "mini-WARN" acts. Using California as an example, its mini-WARN Act lowers the threshold for a covered employer from the federal standard to have employed at least 75 employees in the last 12 months. In addition, prior written notice must be provided for a mass layoff if 50 or more employees will be laid off within 30 days. Employers undergoing mass layoffs or plant closings would be wise to review the requirements of the federal WARN Act and their state's mini-WARN before beginning any terminations.

So, the question is, was Twitter compliant with the WARN Act when it laid off 3,700 employees? The short answer is - it's up to the courts to decide.

The Lasting Effects:

In addition to Twitter's layoffs, Musk then provided the remainder of the team with an ultimatum email stating they should be willing to commit to a "hardcore" work environment. To successfully navigate a change in vision, leadership, or culture, employers must take the time to plan their approach to ensure they maintain trust and loyalty with their employees. Having a strategy for reducing your workforce requires careful planning to consider not just the immediate bottom line but employee morale, engagement, and productivity of remaining employees. Being transparent about the future of the organization, its vision, and why actions were taken is essential to regain the trust of remaining employees.

Like the ultimatum letter Musk sent to remaining employees, we are beginning to see employers utilizing a new opt-out opportunity for employees who aren't aligned with the organization's mission, vision, or values. For example, Ford recently provided underperforming U.S. workers with the opportunity to resign with a severance package. If they chose not to take the severance and separation, they were placed on a performance enhancement plan (PEP), with the potential for separation should their performance not improve. This practice may be an effective approach to weed out poor performers, but employers should ensure this is applied consistently across the organization.

Remember, Everything Plays Out On Social Media.

Not only because this is Twitter, but social media platforms have become a hotbed for employees and ex-employees to vent about their jobs and company. This raises questions about the evergreen issue of social media postings and their consequences. What can employees do and not do? What should their employers do?

Employers should tread cautiously when disciplining or terminating employees for comments they make in any forum. The National Labor Relations Board (NLRB) enforces federal labor laws and regulations governing relationships between management, unions, and employees. The NLRB has defended the right of employees to engage in protected concerted activity. This means employees are free to discuss or criticize their employers regarding working conditions, pay, and employment policies.

This protection is not only for union employees but also for employees working to improve their workplace conditions. If an employee makes a public social media post criticizing their manager and grueling work schedules, federal labor laws may protect them from retaliation. Employees may be less protected if their social media posts do not address working conditions or are harassing. Regardless, employers should consult their legal counsel before disciplining or terminating an employee due to their speech.

Lessons we can learn from Twitter:

  1. When implementing a reduction in force (RIF), ensure all aspects of compliance are reviewed and the reduction is compliant with state and federal labor laws.
  2. Be transparent post-RIF and communicate with remaining employees to regain trust.
  3. Review performance management programs to ensure underperforming employees are counseled appropriately and consistently.
  4. Educate employees about social media policies related to work posts.

Ultimately, in the face of layoffs and counseling out of underperformers, the key to moving forward will be regaining employees' trust to a renewed vision for the future through transparent and ongoing communication. It remains to be seen if Elon Musk and Twitter can overcome the past month's actions.

Considering a layoff in the future? Be mindful of the future of your workforce. Building employee morale through cutting-edge benefits can support employees in the face of a reduction in force. If you’re planning layoffs, schedule a meeting with your OneDigital strategist to ensure you remain compliant.