Shopify faces class action over severance offered to recently laid off staff
A class-action lawsuit alleges Shopify Inc. reneged on a deal it offered some employees who were laid off in a recent round of cuts.
The class action alleges some of the Ottawa software business' employees laid off at the start of May were presented with departure packages outlining hefty severance sums they would be entitled to should they sign the agreement within a few days.
However, once workers signed the agreements and before the deadline passed, Shopify allegedly told departing staff they would instead be given substantially smaller sums than were initially offered.
"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," said 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 action's plaintiff Iain Russell, who worked for Shopify for seven years, says he was initially offered more than $88,000, which he accepted. Then, Shopify allegedly put forward a roughly $44,000 agreement. If he did not accept the $44,000 offer, he was told he would receive about $36,000.
When their severance offers were revised, Samfiru said workers were sent a "vague statement about miscalculating."
"For many people...the difference is significant," Samfiru said.
"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 constitute a breach of contract and is seeking $80 million in damages and $50 million in punitive, aggravated and exemplary damages.
Those amounts could change based on how many workers were presented with shifting offers, he said.
Shopify did not respond to a request for comment.
The company reduced its head count by 20 per cent at the start of the month and by 10 per cent last year.
The company refused to give the number of staff that would be departing the company during the May cut, but it reported in a regulatory filing that it had 11,600 employees at the end of 2022. Twenty per cent of that amounts to about 2,300 people.
In an open letter announcing the layoff, Shopify founder and chief executive Tobi Lutke promised departing staff at least 16 weeks of severance plus a week for every year of tenure at Shopify. Medical benefits and an employee assistance program will cover departing staff over the same period.
Those leaving will also be able to keep their office furniture and though they'll have turn in their company laptops, Lutke said Shopify promised to help pay for new ones.
He positioned the layoff, which came at the time as Shopify sold its logistics business, as an effort to reduce distracting "side quests" that divert attention away from the company's main goals.
"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 published May 30, 2023.
CTVNews.ca Top Stories
Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Former homicide detective explains how police will investigate shooting outside Drake's Bridle Path mansion
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
Stormy Daniels describes meeting Trump during occasionally graphic testimony in hush money trial
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
Alcohol believed to be a factor in boating incident after 2 men die: N.S. RCMP
Two Nova Scotia men are dead after a boat they were travelling in sank in the Annapolis River in Granville Centre, N.S., on Monday.
Northern Ont. woman makes 'eggstraordinary' find
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
Susan Buckner, who played spirited cheerleader Patty Simcox in 'Grease,' dead at 72
Susan Buckner, best known for playing peppy Rydell High School cheerleader Patty Simcox in the 1978 classic movie musical 'Grease,' has died. She was 72.
Jeremy Skibicki has 'uphill battle' to prove he's not criminally responsible in Winnipeg killings: legal analysts
Accused killer Jeremy Skibicki could have a challenging time convincing a judge that he is not criminally responsible for the deaths of four Indigenous women, a legal analyst says.
Bye-bye bag fee: Calgary repeals single-use bylaw
A Calgary bylaw requiring businesses to charge a minimum bag fee and only provide single-use items when requested has officially been tossed.
CFL suspends Argos QB Chad Kelly at least nine games following investigation
The CFL suspended Toronto Argonauts quarterback Chad Kelly for at least nine regular-season games Tuesday following its investigation into a lawsuit filed by a former strength-and-conditioning coach against both the player and club.