Elon Musk’s X wins $500M lawsuit from laid-off workers who claimed they were owed severance
Elon Musk emerged victorious on Tuesday after a San Francisco federal judge sided with him in a lawsuit brought by laid-off employees of X who claimed the billionaire mogul stiffed them on $500 million worth of severance payments.
US District Judge Trina Thompson ruled on Tuesday that around 6,000 workers who were fired after Musk acquired the company then known as Twitter in 2022 were not entitled to severance payments under the federal Employee Retirement Income Security Act (ERISA).
Thompson noted in her ruling that after Musk’s takeover, Twitter management notified employees that any worker who would be leaving the company would receive cash payouts.
Musk, who purchased Twitter for $44 billion in late 2022, cut most of the company’s staff — prompting laid-off employees to file several lawsuits seeking severance.
The lawsuit was jointly filed by Twitter’s former head of total rewards, Courtney McMillian, and another ex-manager, according to Bloomberg News.
They alleged that as senior managers they were entitled to a severance package of six months base salary plus one week for each full year of experience.
Less senior employees are entitled to two months base pay plus one week for each full year of service, according to the plaintiff.
The lawsuit alleges that some laid-off employees got no severance whatsoever while others received just one months pay.
After Musk took over the company in October 2022, he wrote a post stating that “everyone exited was offered 3 months of severance, which is 50% more than legally required.”
The Post has sought comment from X and McMillian’s lawyer.
Several similar lawsuits filed by laid-off employees are making their way through the court system.
Former Twitter employees have accused the company of targeting women, minorities and workers with disabilities for layoffs, failing to give the advance notice required by federal and state laws, and refusing to pay promised bonuses, among other claims.
The company has generally denied wrongdoing. Musk rebranded Twitter as X in July of last year.
Earlier this year, four former top executives at Twitter, among them ex-CEO Parag Agrawal, sued Musk for $128 million in combined unpaid severance.
The other plaintiffs are Ned Segal, Twitter’s former chief financial officer; Vijaya Gadde, its former chief legal officer; and Sean Edgett, its former general counsel.
Musk fired the executives just minutes after he officially took control of the company.
The ex-executives alleged that Musk falsely accused them of misconduct and forced them out in retaliation for their lawsuit against the billionaire accusing him of attempting to renege on his offer to buy the company.
“This is the Musk playbook: to keep the money he owes other people, and force them to sue him,” the former executives said in the 39-page lawsuit.
