Elon Musk Does Not Owe Ex-Twitter Staffers $500 Million in Severance, Court Rules

Elon Musk faces numerous complaints for firing greater than 6,000 Twitter employees, which include then-CEO Parag Agrawal, following Musk’s 2022 takeover of the social media platform. On Tuesday, Musk defeated one of those court cases, as a federal choose dominated X Corp. Doesn’t owe the ex-employees any extra severance.

The lawsuit, filed through Twitter’s former head of people revel in and some other ex-manager, alleged that X Corp. Paid fired Twitter personnel much less severance than they have been contractually promised. The grievance said Twitter presented those 6,000 fired employees, at most, 3 months of severance pay, which Musk confirmed in a tweet on the time. Twitter’s Severance Plan, which became in impact in view that 2019, had previously promised senior personnel upwards of six months of severance pay, in step with the complaint.

The plaintiff anticipated Musk owed those former employees upwards of $500 million, citing protections below the federal Employee Retirement Income Security Act (ERISA).

Regarding Twitter’s reduction in force, sadly there may be no preference when the agency is dropping over $4M/day. Everyone exited turned into offered three months of severance, which is 50% greater than legally required. — Elon Musk (@elonmusk) November 4, 2022 U.S. District Judge Trina Thompson dismissed the class motion lawsuit in San Francisco on Tuesday.

In a courtroom filing, Judge Thompson said the ERISA protections did now not apply due to the fact Musk’s organisation notified employees shortly after the October 2022 takeover that fired employees might only acquire coins payouts. Because of this observe, the mass firings that passed off in November have been no longer underneath Twitter’s preceding severance plan, in keeping with the judge.

“We are disillusioned inside the ruling and thinking about our options for shifting ahead,” said a spokesperson for Sanford Heisler Sharp, the regulation organization representing the plaintiffs in this case, in an email to TechCrunch.

Since the November 2022 firings, X Corp. Has operated the social media platform with a bare-bones personnel. Musk told the BBC in 2023 that he delivered Twitter’s personnel all the way down to 1,500 employees, from roughly 8,000 earlier than his takeover, bringing up major fee-slicing efforts. Despite the efforts, X has persevered to battle, as files acquired with the aid of Bloomberg confirmed the organisation misplaced $456 million within the first zone of 2023.