Arbitration Fees Dispute: Musk's X Corp Wins Partial Victory

The U.S. appeals court has decided that X Corp, the social media company acquired by Elon Musk, will not be forced to pay upfront arbitration fees in legal battles with former employees. The employees were part of the workforce reduction that followed Musk's acquisition of the company, which was rebranded as X.

According to the New York-based 2nd U.S. Circuit Court of Appeals, the decision on who should cover the arbitration fees should be made by the arbitration firm itself, not the federal courts. Judge Gerard Lynch noted that involving the district court in the procedural disputes would undermine the arbitration's objectives of efficiency and cost reduction.

Both X and Shannon Liss-Riordan, the lawyer for the former employees, have not commented on the court's ruling. The decision highlights ongoing legal challenges Musk's company faces after firing around 6,000 employees, leading to multiple lawsuits concerning severance pay and arbitration agreements.

(With inputs from agencies.)