A class action lawsuit alleges that Shopify reneged on a deal offered to some employees who were laid off in a recent round of cutbacks.
According to the class action lawsuit, some of the payment solutions company’s employees who were laid off at the beginning of May were offered large severance packages that they would have been entitled to if they had signed the agreement within a few days.
However, once the workers signed the agreements—even when it was done before a given deadline—Shopify reportedly told them that they would instead be paid much less than what was originally offered.
“The individuals did the reasonable thing, which was to accept, only to be told that even if reasonable offers were made to them, even if they accepted that reasonable offer,[the offer would not take place]and they would have to sign a completely new agreement for a smaller amount,” said Lior Samphiro, the attorney handling the case. much.”
“It just doesn’t work that way. I look at severance packages every day and I’ve been doing this for 21 years, and I’ve never seen an employer do something like this.”
Class plaintiff Ian Russell claimed he accepted $88,000 before Shopify offered him $44,000 instead. He added that he was told that if he did not accept the offer of $44,000, he would receive $36,000 instead.
When their redundancy offers were reviewed, Mr Samfiru said the workers had received a “vague statement of miscalculation”.
“To many people […]Mr. Samferu noted that the difference was significant.
“We’ve seen a difference of $10,000 to $50,000 to $60,000 between what people agreed to and what Shopify now says they’ll get. We’re not talking about anything minor here.”
Mr. Samfiru argues that Shopify’s actions constitute breach of contract and seeks $80 million in compensatory damages and $50 million in punitive, aggravated and exemplary damages.
He added that these amounts could change according to the number of workers to whom the variable offers were submitted.
Shopify did not respond to a request for comment.
The company cut its workforce by 20% earlier this month and 10% last year.
Shopify declined to give the number of employees who will leave the company during the cut announced in May, but it said in a regulatory filing that it has 11,600 employees at the end of 2022. 20% of that number equals about 2,300 people.
In an open letter announcing the layoffs, Shopify founder and CEO Toby Lutke promised the departing employees at least 16 weeks of severance pay, plus one week for each year of seniority. in Shopify. Medical benefits and the Employee Assistance Program will cover the affected employees for the same period.
Those leaving will also be able to keep their office furniture, and though they’ll have to return their company laptops, Lütke said Shopify has promised to help pay for new hardware.
He explained the series of layoffs, which came around the time Shopify sold its logistics business, as an attempt to cut back on the “distracting side jobs” that divide the company’s focus on its main goals.
“I realize the crushing effect this decision will have on some of you and I have not taken this decision lightly,” Lutke wrote.
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