Elon Musk, Twitter hit with $500m lawsuit over unpaid severance payments

1689191791 Elon Musk Twitter hit with 500m lawsuit over unpaid severance
Twitter owner Elon Musk at a meeting with the French Minister for the Economy and Finances in Versailles, France. AFP/File
Twitter proprietor Elon Musk at a gathering with the French Minister for the Financial system and Funds in Versailles, France. AFP/File

Former staff of Twitter have filed a lawsuit in opposition to CEO Elon Musk and the social media platform, alleging the corporate failed to satisfy promised severance packages. 

The lawsuit, searching for damages of no less than $500 million, accuses Musk and Twitter of breaching their fiduciary duties by deceptive staff about their eligibility for severance pay and withholding the funds to assist the corporate.

The lead plaintiff within the case, Courtney McMillian, who labored in Twitter’s HR division, claims that Twitter and Musk did not pay the promised advantages to hundreds of terminated staff following Musk’s takeover of the corporate in October 2022. Below the severance plan in place previous to the acquisition, staff have been entitled to compensation primarily based on their years of service and different advantages equivalent to vested restricted inventory models and outplacement companies.

“Musk initially represented to staff that below his management Twitter would proceed to abide by the severance plan,” mentioned Kate Mueting, the agency administrative associate at Sanford Heisler Sharp, the legislation agency representing the plaintiffs. “He apparently made these guarantees realizing that they have been obligatory to stop mass resignations that will have threatened the viability of the merger and the vitality of Twitter itself.”

The lawsuit additional alleges that terminated staff weren’t supplied with details about modifications to the severance plan and got considerably decreased compensation, with some receiving no severance pay in any respect. The plaintiffs argue that Twitter’s actions violated the Worker Retirement Earnings Safety Act of 1974 (ERISA), which governs worker profit plans.

The lawsuit provides to the collection of authorized challenges Twitter has confronted in relation to its mass layoffs. The corporate has beforehand been accused of gender discrimination and failing to pay bonuses owed to remaining staff. Nonetheless, these circumstances differ from the present lawsuit, which focuses particularly on severance pay and violations of the advantages legislation.

The end result of this lawsuit could have important implications for each Musk and Twitter. If profitable, the plaintiffs may doubtlessly obtain substantial monetary compensation, and the case might expose the corporate to additional scrutiny concerning its therapy of staff. Twitter has but to offer an official assertion concerning the lawsuit, as a substitute responding to requests for remark with an emoji.