Musk's pledge to pay legal fees for employees treated “unfairly” could create jobs

Elon Musk, the billionaire entrepreneur announced via a post on X, formerly known as Twitter, in early August that he will help people treated “unfairly” by their employer due to posts they have put on platform by paying their legal expenses.

Although a generous and bold offer by Musk, it also raises questions about feasibility.

How easy is it, in practice, for a third party to fund litigation for someone who purports to have been unfairly dismissed or subjected to some other detriment by their employer?

It also highlights the need for employers to implement sturdy social media policies to help avoid issues with employees down the road.

The first question is: who decides whether someone has been treated unfairly by an employer because of a post on X?

Dispute resolution reaches record demand in 2023

What to do about employees’ offensive social media posts

Celebrity status is always bad for corporate governance

An answer in the UK would be a tribunal finding unfair dismissal or discrimination, but that finding comes at the end of the litigation.

By that time, the individual claimant would have incurred considerable legal fees which are rarely be recoverable from the employer, as the general principle in a tribunal is that each party pays its own costs. So, aggrieved employees or former employees may not want to take the risk.

Therefore, realistically, if Musk wishes to support people treated “unfairly” in the UK, the support would need to be confirmed at the start of litigation.

For that to work, there would need to be early case assessments by employees of X (assuming that Musk would not be taking all the decisions personally) to decide whether to back the potential claimant.

This could be rather like the early case assessments that happen with insurance-backed claims, for which insurers have teams of claims handlers.  

For the UK alone, I could envisage 40 to 50 people being recruited by X to make decisions and handle the management or supervision of claims, as well as entering into contracts with the individuals and their lawyers for the funding of the litigation.

The cost to X in funding claims and employing a team of people in each jurisdiction to manage them, could be enormous. Therefore, X, like insurers, may want to have a panel of approved law firms who charge pre-determined rates for running the claims.

Musk may want to have some control over the claims that his business is funding. From my experience, claimants who are not paying their own legal fees clock up higher bills than those who are paying.

Musk will not want to write a blank cheque so, like with insurers, I would expect to see a limit put on the legal support. His team of claim handlers may be given power over the day-to-day management of claims, taking control away from the actual claimant.

The same loss of control for the claimant may also affect settlement negotiations. Often, the funding of litigation by insurers stops if the claimant turns down reasonable settlement proposals. The same may apply with X-funded claims.

We should also consider what happens if X refuses to support a particular aggrieved employee.

I do not believe that Musk’s recent public statement constitutes a legally binding commitment to fund claims (although he is free to disagree), but the statement might in due course lead to some claims against X by individuals turned down by X that they have been turned down for reasons that constitute unlawful discrimination in the provision of services.

The funding of claims could become somewhat political, leaning towards certain categories of posts on X while excluding others.

X would need to have clear and non-discriminatory policies in place about the funding of claims, ensuring that objective criteria are applied when considering the merits of a claim.

Musk has made a very brave commitment to people who post on X, but it is one that will be difficult to apply in practice.

Nevertheless, his statement should be a reminder to employers about the importance of having robust social media policies so that they will be in a stronger position if they decide to act against employees for their posts.    


Adam Lambert is partner and head of employment and labour, UK, at BCLP