To state that Elon Musk’s takeover of Twitter in October 2022 was turbulent would be an understatement. In the aftermath of Musk’s takeover and his subsequent job cuts at the social media company, X faced a number of lawsuits from Twitter’s former employees. One of these lawsuits has recently ruled in Musk and X’s favor.
The lawsuit alleged that Musk and X owe at least $500 million in severance pay to about 6,000 ex-Twitter workers under the provisions of the federal Employee Retirement Income Security Act (ERISA), as noted in a Bloomberg News report. The lawsuit was filed by Courtney McMillian, Twitter’s former “head of total rewards,” as well as another ex-manager.
As noted in a previous BBC report, Twitter’s severance plan indicates that staff are entitled to receive a minimum of two months base salary plus a cash contribution towards health insurance and other benefits. Those with senior roles, on the other hand, including McMillian herself, were due six months base salary in severance pay plus one week for each full year of experience.
Under Musk, Twitter staff who were terminated following Musk’s takeover received “at most” three months of pay. This includes one month of severance and two months of pay to comply with US law. Elon Musk mentioned this in a post on X in November 2022, when he stated that “everyone exited was offered 3 months of severance, which is 50% more than legally required.”
US District Judge Trina Thompson in San Francisco noted on Tuesday that the former Twitter employees’ claims were not covered under the Employee Retirement Income Security Act. As per the judge, this was due to Twitter informing employees following Musk’s takeover that any worker who would be exiting the company would only receive cash payouts.
While Elon Musk and X won the suit that was filed by Twitter’s former head of total rewards, several other cases that are of similar nature are still ongoing.
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