Musk Beats Former Twitter Employee, Demands $500M in Severance

Image source, Getty Images

  • Author, Natalie Sherman
  • Role, BBC news

A U.S. judge has dismissed a lawsuit brought by former Twitter employees who accused billionaire Elon Musk of wrongfully denying about $500 million in severance payments to workers who were fired after he took over the company.

Judge Trina Thompson said the workers had failed to show that their claims were protected by federal law.

The ruling is a victory for Musk, who bought Twitter in 2022 and immediately implemented changes, including laying off thousands of employees.

These moves led to multiple lawsuits from former employees and suppliers, who accused the company of withholding promised payments.

The complaint was filed in 2023 in a federal court in San Francisco by Courtney McMillian, the former “head of total rewards” at the social media site Musk renamed X.

In the complaint, she alleged that the company had paid workers only one month’s wages in severance pay, instead of the much more generous benefits, including at least two months’ salary and health insurance contributions, that had been promised.

Musk’s team had asked the judge to dismiss the complaint, arguing that the US Employee Retirement Income Security Act did not apply as claimed.

The law sets standards for private health and pension plans.

“We are disappointed with the ruling and are considering our options for moving forward,” said a spokesman for Ms McMillian’s team.

Other cases, including one brought by former company executives, are still pending in court.

Judge Thompson referred to those disputes in her ruling, noting that employees may have an opportunity to prove their claims elsewhere.

“The court has no jurisdiction. However, plaintiffs are not without recourse. Indeed, other cases have been filed against Twitter for failing to pay wages or provide severance pay to employees during the same or overlapping periods,” she wrote.

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