Musk Defeats $500 Million Severance Lawsuit Over Mass Layoff of Twitter Employees

X Corp. and owner Elon Musk defeated one of the lawsuits filed over the firing of thousands of employees after the billionaire’s takeover of the social media platform in October 2022.

The suit alleged that X, formerly known as Twitter, and Musk owed at least $500 million in severance pay to about 6,000 laid-off employees under provisions of the federal Employee Retirement Income Security Act (ERISA), which sets rules for benefit plans.

The two plaintiffs, the company’s former global head of compensation and benefits and another ex-manager, said workers got severance equal to only one month’s pay.

But US District Judge Trina Thompson in San Francisco ruled that the employees’ claims weren’t covered under ERISA because the company told employees after Musk’s takeover that any who were let go would only get cash payouts.

Several similar cases filed by former Twitter employees and executives are moving through the courts.
The case is McMillian v. Musk, 23-cv-03461, US District Court, Northern District of California (San Francisco).