The social media platform formerly known as Twitter, now referred to as X Corp, has faced numerous legal challenges since Elon Musk’s acquisition. One prominent case involves the layoffs of over 6,000 employees, who allege that Musk did not provide the full severance they were owed. This legal battle saw a significant development recently, with Musk securing a favorable ruling.
The class-action lawsuit was initiated by former Twitter employee Courtney McMillian. The complaint argued that, according to the federal Employee Retirement Income Security Act (ERISA), the laid-off workers were entitled to three months of pay under the Twitter Severance Plan.
However, they received less than this amount and sought $500 million in unpaid severance. On Tuesday, US District Judge Trina Thompson in the Northern District of California granted Musk’s motion to dismiss the complaint.
Elon Musk
Judge Thompson ruled that the severance plan cited by the plaintiffs did not qualify under ERISA. She determined that the employees were informed of a different payout scheme before the layoffs occurred. Consequently, the severance program that applied was the one implemented after Musk’s takeover, not the 2019 plan the plaintiffs expected. This led to the dismissal of the case.
Despite this setback for the laid-off employees, there are still opportunities for them to pursue larger payments. Judge Thompson mentioned that the plaintiffs could revise their complaint to focus on non-ERISA claims.
If they proceed with this, Thompson indicated that the case might be linked to ongoing lawsuits against X Corp/Twitter, which include significant claims for unpaid severance and legal fees from former executives.
While Musk achieved a victory with the dismissal of the class-action lawsuit, the legal battles surrounding the layoffs are far from over. The former employees may continue to seek compensation through amended complaints and related ongoing lawsuits, keeping the pressure on X Corp/Twitter in the legal arena.
