Elon Musk Wins $500 Million Lawsuit Filed by Former Twitter Employees

Elon Musk, Tesla CEO and the richest man in the world according to the magazine ForbesIt has been able to dismiss a lawsuit accusing it of failing to pay at least $500 million in compensation to thousands of laid-off employees. Twittermentioned Fox BusinessThe lawsuit was filed by former employees of the social network, now known as sThis comes after the businessman acquired it in October 2022 for $44 billion.

United States District Court Judge Trina Thompsonin San Franciscodecided that the claims of the former workers were not covered by the law. Employee Retirement Income Security Act (ERISA)which regulates benefit plans. “Only cash payments were promised,” Thompson wrote in his decision.

According to the plaintiffs, Courtney McMillianwho oversaw compensation and benefits at Twitter, and Ronald CooperDirector of Operations, 2019 Compensation Plan Twitter It states that employees remaining after the purchase will receive between two and six months’ pay, plus one week’s pay for each year of service, if they are laid off.

They explained in the lawsuit that “Twitter offered only one month’s salary as compensation, without any additional benefits.”

Judge Thompson pointed out that Erissa It didn’t apply to Twitter’s post-acquisition plan, as there was no “ongoing management scheme” in which the company would review claims on a case-by-case basis or provide benefits like ongoing health insurance or outplacement services. “I lacked such mechanisms.”, The judge stated.

Although this suit was dismissed for lack of jurisdiction, Thompson allowed the plaintiffs the opportunity to amend their complaint to make claims not covered by the law. Erissa.

CNN They pointed out that this issue is just one of many they face. musk And the new direction for your social network. This includes a lawsuit filed by the former CEO Parag Agrawal and other executives, such as the former CFO. Ned Segalformer legal director Vijaya Gaddi and former general counsel Sean Edgettwho are seeking $128 million by claiming that X’s owner refused to pay them after they were fired.

Musk said the mass layoffs at Twitter were necessary to avoid bankruptcy, as the company was losing about $4 million a day when he took over. However, the decisions sparked a series of additional lawsuits, including one by shareholders alleging that the billionaire and his wealth manager intentionally violated a board rule. Securities and Exchange CommissionWhich requires notification of any acquisition of more than 5% of the company’s shares.

In response to this latest lawsuit, Musk has maintained that the late disclosure of the acquisition, which came 11 days after it was due, was due to a misunderstanding of regulations and not an attempt to defraud shareholders. He said the disclosure was made quickly once he realized the mistake.

The court ruling in favor of the tech mogul represents a major shift in the ongoing legal battle surrounding his takeover of TwitterIt shows how the complexities of the legal system can work to the advantage of those who have the resources and ability to fight a long legal battle. However, it remains to be seen what other legal challenges will arise in the future as aggrieved parties continue to file complaints.