CALIFORNIA – Elon Musk and his company X, formerly known as Twitter, have temporarily escaped a $500 million compensation lawsuit.
A federal judge in the Northern District of California dismissed the lawsuit filed by former Twitter employees, who claimed that the company owed this sum in severance payments following the massive layoffs after Musk acquires Twitter.
Courtney McMillian, former head of human resources at Twitter, and Ronald Cooper, a former manager, filed the lawsuit in July of last year. The plaintiffs argued that Twitter did not adequately compensate over 6,000 laid-off employees by the Employee Retirement Income Security Act (ERISA).
According to the lawsuit, the employees only received one month of severance pay, which they considered insufficient and far below what was stipulated in the severance plan.
U.S. District Judge Trina Thompson ruled that there was not enough evidence to support that the severance plan was governed by ERISA. In her ruling, she noted that the company informed laid-off employees they would receive cash payments without promising continued health benefits or relocation services.
Although McMillian and Cooper have 21 days to amend their complaint regarding the insufficiency of severance pay, any claim under ERISA will not be maintained in court.
The plaintiffs’ legal team expressed disappointment with the ruling and is considering their options for moving forward. Despite this favorable ruling, Musk and his platform X still face several legal challenges.
There are multiple ongoing lawsuits related to the acquisition of X and insufficient severance payments. Since Musk took control of Twitter, he has made significant and controversial changes.
He reduced the workforce by approximately 80% and modified various aspects of the platform. Among these changes are offering verification to any user who pays, renaming the company to “X,” and privatizing users’ “likes.”
Musk’s acquisition of Twitter and the subsequent rebranding to X have been subjects of numerous controversies and legal challenges. The future of these lawsuits and the impact of Musk’s implemented changes will continue to be topics of interest in the social media landscape and legal arena.
