Shopify faces class action over severance offered to recently laid off staff

A category-action lawsuit alleges Shopify Inc. reneged on a deal it provided some workers who had been laid off in a current spherical of cuts.

The class motion alleges among the Ottawa software program business’ workers laid off firstly of May had been offered with departure packages outlining hefty severance sums they might be entitled to ought to they signal the settlement inside a number of days.

However, as soon as staff signed the agreements and earlier than the deadline handed, Shopify allegedly advised departing workers they might as a substitute be given considerably smaller sums than had been initially provided.

“The individuals did the reasonable thing, which is to accept, only to be told even though we made you reasonable offers, even though you accepted that reasonable offer, we’re just not going to do it and you have to sign a brand new agreement for a much lesser amount,” mentioned Lior Samfiru, a lawyer pursuing the case.

“It just doesn’t work like that. I review severance packages every day and have 21 years of doing this and I have never seen any employer ever do anything like that.”

The class motion’s plaintiff Iain Russell, who labored for Shopify for seven years, says he was initially provided greater than $88,000, which he accepted. Then, Shopify allegedly put ahead a roughly $44,000 settlement. If he didn’t settle for the $44,000 supply, he was advised he would obtain about $36,000.

When their severance provides had been revised, Samfiru mentioned staff had been despatched a “vague statement about miscalculating.”

“For many people…the difference is significant,” Samfiru mentioned.

“We’ve seen anywhere from a $10,000 to $50,000 and $60,000 difference between what individuals accepted and what Shopify now says they’re not going to get. We are not talking about anything minor here.”

Samfiru alleges Shopify’s actions represent a breach of contract and is looking for $80 million in damages and $50 million in punitive, aggravated and exemplary damages.

Those quantities may change primarily based on what number of staff had been offered with shifting provides, he mentioned.

Shopify didn’t reply to a request for remark.

The firm lowered its head depend by 20 per cent firstly of the month and by 10 per cent final 12 months.

The firm refused to offer the variety of workers that may be departing the corporate through the May lower, but it surely reported in a regulatory submitting that it had 11,600 workers on the finish of 2022. Twenty per cent of that quantities to about 2,300 individuals.

In an open letter saying the layoff, Shopify founder and chief government Tobi Lutke promised departing workers at the least 16 weeks of severance plus every week for yearly of tenure at Shopify. Medical advantages and an worker help program will cowl departing workers over the identical interval.

Those leaving will even be capable of preserve their workplace furnishings and although they will have flip of their firm laptops, Lutke mentioned Shopify promised to assist pay for brand spanking new ones.

He positioned the layoff, which got here on the time as Shopify offered its logistics business, as an effort to scale back distracting “side quests” that divert consideration away from the corporate’s predominant objectives.

“I recognize the crushing impact this decision has on some of you, and did not make this decision lightly,” Lutke wrote.

This report by The Canadian Press was first printed May 30, 2023.