The class action lawsuit alleges that Shopify reneged on the contract it offered to some employees who were laid off in a recent round of cuts.
According to the class action, some of the payment solutions company’s employees, who were laid off in early May, were offered substantial severance packages that they would have been entitled to if they signed the contract within days.
However, once the workers signed the contracts — even if it was done before the specified deadline — Shopify reportedly received far less money than they were actually offered.
“People have done a reasonable thing, that is to accept, even if they have been given a reasonable offer, even if they accept this reasonable offer, (the offer does not go through) and they must sign a completely new contract for a much lower amount,” said lawyer Lear Samfiru, who is handling the case.
“It doesn’t work that way. I see severance packages every day and have been doing this for 21 years and I’ve never seen an employer do this. »
Class action plaintiff Ian Russell claims he accepted $88,000 before Shopify offered him $44,000 instead. He said he was told that if he did not accept the $44,000 offer, he would receive $36,000 instead.
Mr Samfiru said workers received a “vague statement about miscalculations” when their redundancy offers were revised.
“For many people […]The difference is significant,” Mr Samfiru pointed out.
“We’ve seen $10,000, $50,000 and $60,000 difference between what people agreed to and what Shopify says they’re getting now. We are not talking about small things here. »
Mr. Shopify alleges that Shopify’s actions breached the contract and seeks $80 million in compensatory damages and $50 million in punitive, aggravated and exemplary damages. Samfiru argued.
He added that these amounts may vary depending on the number of workers who have made changing offers.
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 cutbacks announced in May, but said in a regulatory filing that it expects to have 11,600 employees by the end of 2022. 20% of that number equals about 2300 people.
In an open letter announcing the layoffs, Shopify founder and CEO Toby Lutke said outgoing staff will receive at least 16 weeks of severance pay plus one week of seniority each year. Guaranteed at Shopify. Medical benefits and Employee Assistance Program are applicable to those affected during the same period.
Those who leave will also be able to keep their office furniture, and even if they have to return their company laptops, Shopify has promised to help pay for new ones, Lutke said.
He described the series of layoffs that came during Shopify’s sale of its logistics business as an effort to cut down on “interpersonal side quests” that were dividing the company’s focus on its core goals.
“I recognize the crushing effect this decision is having on some of you and I do not take this decision lightly,” Luttke wrote.
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