Musk’s Costly Cuts at X: Will DOGE and Trump Face Similar Fallout?

On Nov. 16, 2022, Elon Musk sent an email to roughly three thousand Twitter employees with the subject line “A Fork in the Road.” The email gave employees until close of business the following day to decide whether they wanted to commit to an “extremely hardcore” work culture at the company Musk just purchased or resign and accept three months of severance pay, which never arrived.

Sound familiar? About a month ago, more than two million federal workers received an email with the same subject line from the U.S. Office of Personnel Management (OPM), implementing plans from Musk’s Department of Government Efficiency (DOGE), sent. Those emails are now the subject of several lawsuits.

This week, Bloomberg reported that four former employees of Twitter, now X, recently prevailed in closed-door arbitration proceedings. The four workers argued successfully that, although they did not respond to the “Fork in the Road” emails, they did not resign but were terminated and were entitled to severance.

“Twitter claims that those employees weren’t laid off, they voluntarily resigned. And we say no, that was instigated by Twitter. So we contend that they were laid off,” said labor attorney Shannon Liss-Riordan, who is representing 2,000 former employees in arbitration cases against Twitter, now X. She told KQED she’s not at liberty to talk about the roughly 20 cases so far where a judge has reached a decision. “I can tell you I’m feeling very good about our case. Very good,” said Liss-Riordan. X did not respond to KQED with a comment in time for this report.

Liss-Riordan suggested the early wins for the four Twitter workers could presage what’s ahead for federal workers who fight back against Musk’s efforts to cut costs with mass firings and pressure tactics to prompt resignations. “The similarities are just uncanny,” she said, adding, “There are a lot more protections for federal workers than there are for private employees.”

Stanford professor Bill Gould, who chaired the National Labor Relations Board during the Clinton administration, concurred. He pointed out that arbitration judges who hear many of the disputes between workers and employers in the U.S. have a reputation for being less friendly to worker complaints than state and federal courts.

“The victory by Twitter employees in what appears to be an employer-controlled arbitration system is remarkable and could spell trouble for the similar Musk-promoted procedures in government,” Gould wrote KQED.

Gould’s prediction appeared to be bolstered on Thursday when U.S. District Judge William Alsup in San Francisco found the mass firings of probationary employees, who have less than one year on the job, were likely unlawful. The judge ordered the Office of Personnel Management to inform certain federal agencies that it had no authority to order the firings.

“OPM does not have any authority whatsoever, under any statute in the history of the universe,” to hire or fire any employees but its own, Judge Alsop said.

However, given the conservative direction of the U.S. Supreme Court, it remains unclear if Alsup’s decision will be upheld if appealed. Many legal experts worry that Trump administration officials will choose not to abide by court rulings, given the president’s support for Musk’s efforts to cut the headcount in the federal government. Many critics characterize Musk’s leadership at DOGE as capricious, cruel and unconcerned with legality.

“When employees have job rights, as most federal employees do, they cannot be summarily fired without cause.” Catherine Fisk of UC Berkeley’s Law School wrote KQED. “Most federal civilian employees are protected by civil service laws that require the government to have just cause and to follow fair procedure to terminate them. That is true even when the government seeks to lay off employees for reasons of cost.”

Fisk added, “The taxpayers may wind up paying more to the thousands of federal employees whose rights have been violated in the recent mass purges than if it paid salaries and benefits now.”

That appears to be proving true for the X arbitration cases, according to Liss-Riordan, who noted that Twitter/X has to pay for arbitration fees, plus attorneys’ fees for both sides of each case the company loses. “It’s incredibly, insanely expensive what he’s doing,” Liss-Riordan said. “So anything Elon thought he was doing to save money is getting thrown out the window by spending all this money defending our cases, 2,000 of them, one by one.”

Liss-Riordan said her office has been taking calls from federal employees in recent weeks who are assessing whether and how to sue over their dismissals. “They’re being told something different every day. I think that’s part of the, frankly, harassment that DOGE, Elon, Donald Trump himself are intending to inflict on federal employees to keep them in the dark and afraid. They seem to just really wanna be pushing more workers out the door through these tactics.”

But, she added, “Elon Musk doesn’t own this country. He doesn’t own the federal government. He’s not at liberty to break it or run roughshod over workers rights.”