Elon Musk is being sued for firing more than 6,000 Twitter workers, including Parag Agrawal, who was CEO at the time, after Musk took over the social media site in 2022. On Tuesday, Musk won one of those lawsuits when a federal judge said X Corp. doesn’t have to pay the former workers any more severance pay.
People who used to work for Twitter and one of its managers filed the lawsuit, saying that X Corp. did not pay fired Twitter workers as much severance as the contracts said they would. According to the lawsuit, Twitter gave these 6,000 fired workers no more than three months of severance pay. Musk confirmed this in a tweet at the time. The complaint says that Twitter’s Severance Plan, which has been in place since 2019, promised top workers up to six months of severance pay.
The plaintiff said that Musk owed these former workers more than $500 million, claiming the Employee Retirement Income Security Act (ERISA) as proof.
On Tuesday, U.S. District Judge Trina Thompson in San Francisco threw out the class action case.
Judge Thompson wrote in court that ERISA rights did not apply because Musk’s company told workers soon after the takeover in October 2022 that they would only get cash payments if they were fired. The judge said that it was because of this warning that Twitter’s previous severance plan did not cover the mass firings that happened in November.
Lawyers for the plaintiffs in this case, Sanford Heisler Sharp, told TechCrunch in an email, “We are disappointed in the ruling and are thinking about our options for moving forward.”
Since the firings in November 2022, X Corp. has only had a few people running the social media site. Musk told the BBC in 2023 that he cut Twitter’s staff from about 8,000 people before he took over to just 1,500 people, saying that he did this to save a lot of money. Even with all of their hard work, X has continued to have problems. According to papers obtained by Bloomberg, the company lost $456 million in the first quarter of 2023.
Musk is still in the running for these fires that happen in large groups. Another lawsuit is filed by Agrawal and three other former leaders of Twitter Inc. They want $128 million in severance pay from X Corp. because they were fired all at once. Another lawsuit from former top Twitter employees wants more than $1 million in severance pay, but Musk says he never agreed to the benefit plans of these former employees.
Also Read: An Ex-ceo of Twitter Sues Elon Musk
This story was changed on July 10 at 12:48 PM PDT to include Sanford Heisler Sharp’s thoughts.
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