Musk avoids $500 million lawsuit over Twitter layoffs

Elon Musk has efficiently dismissed a lawsuit alleging he refused to pay at the least $500 million in severance pay to 1000’s of Twitter workers he laid off in mass layoffs after shopping for the social media firm now often known as X.

U.S. District Choose Trina Thompson in San Francisco dominated Tuesday that the federal Worker Retirement Earnings Safety Act governing profit plans didn’t cowl the previous workers’ claims and subsequently lacked jurisdiction.

The case is considered one of a number of accusing Musk of breaking guarantees made to former Twitter workers, together with ex-CEO Parag Agrawal, and suppliers after buying the corporate for $44 billion in October 2022.

Musk additionally runs the electrical automobile firm Tesla and is the richest particular person on the planet, in accordance with Forbes journal.

An out of doors spokeswoman for Sanford Heisler Sharp, which represents the previous workers, stated the regulation agency was disenchanted and was contemplating its authorized choices. Attorneys for Musk and X didn’t instantly reply to requests for remark.

In accordance with the criticism, Twitter’s severance plan known as for workers who remained after the acquisition to obtain two or six months’ wage, plus one week’s pay for every year of employment, in the event that they had been terminated.

Plaintiffs Courtney McMillian, who oversaw Twitter’s compensation and advantages, and Ronald Cooper, an operations supervisor, stated Twitter as an alternative supplied laid-off workers just one month of severance pay, with no advantages.

Thompson stated ERISA retirement plan regulation didn’t apply to Twitter’s post-purchase plan as a result of there was no “steady administrative scheme” during which the corporate reviewed claims on a case-by-case foundation or supplied advantages akin to ongoing medical insurance and outplacement providers.

“Solely money funds had been promised,” he wrote.

The decide stated workers who left Twitter in mass layoffs in 2022 and 2023 can search to amend their criticism, however just for claims not ruled by ERISA.