Elon Musk Wins the $500 Million Severance Lawsuit Filed by Terminated Twitter Employees

By Trisha Andrada

Jul 11, 2024 01:06 AM EDT

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SpaceX, Twitter and electric car maker Tesla CEO Elon Musk attends an event during the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition centre in Paris, on June 16, 2023. (Photo : JOEL SAGET/AFP via Getty Images)

Elon Musk was found not liable for failing to pay at least $500 million in severance to thousands of Twitter workers he laid off after purchasing the social media network, now known as X.

Judge Says Federal Law Doesn't Support the Workers' Claims

On Tuesday, July 9, United States District Judge Trina Thompson of San Francisco decided that she lacked jurisdiction over the former workers' claims because the federal Employee Retirement Income Security Act (ERISA) regarding benefit programs did not apply to them, as reported by Reuters.

This is only one of many lawsuits alleging that after purchasing Twitter for $44 billion in October 2022, Musk broke his obligations to many individuals, including suppliers, former employees, and even ex-CEO Parag Agrawal.

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What Does Twitter's 2019 Severance Plan Say?

In a report by CNN, the lawsuit states that as part of Twitter's 2019 severance plan, workers who remained on after the buyout were to get two or six months' compensation, while those who were let off would receive one week's pay for every year of service.

Plaintiffs Courtney McMillian, who was in charge of Twitter's benefits and compensation, and Ronald Cooper, a former operations manager, claimed that the business did not follow the plan and gave terminated workers just one month's salary as severance with no further benefits.

Thompson argued that Twitter's post-buyout plan was exempt from ERISA because the firm did not have a continuous administrative structure to evaluate claims individually or provide benefits like extended health insurance or outplacement services. The promises were solely for monetary compensation, she said.  

The court ruled that the plaintiffs can amend their complaint, but that option is limited to claims that ERISA does not cover.

READ MORE: Elon Musk vs. Bill Gates: How the Feud Between the 2 Billionaires Started

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