Elon Musk Wins Legal Battle Over $500 Million Twitter Severance Dispute

The presiding judge stated that the employees did not prove that their claims were protected by federal law.

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In 2023, Courtney McMillian, the former “head of total rewards” at the social media site renamed X by Elon Musk, initiated legal action. She alleged that the company had unlawfully denied approximately $500 million in severance payments to employees terminated since Musk took over.

McMillian stated that instead of providing the generous severance packages that were promised, including at least two months’ salary and contributions toward health insurance, the firm only offered one month’s pay.

Elon Musk, who acquired Twitter in 2022, made sweeping changes, including the dismissal of thousands of staff, leading to numerous lawsuits from former employees and vendors. These lawsuits claimed that the company failed to deliver on its payment commitments. McMillian’s case was one among many, filed in a federal court in San Francisco.

Judge Trina Thompson, who presided over the case, ruled in favor of Musk, stating that the employees did not prove that their claims were protected by federal law.

Musk’s legal team argued that the Employee Retirement Income Security Act (ERISA), which sets standards for private health and pension plans, did not apply to their claims. McMillian’s attorney has not commented on the ruling.

Despite dismissing the case, Judge Thompson stated that the plaintiffs might still have opportunities to pursue their claims through other legal avenues.

She referenced ongoing lawsuits against Twitter related to unpaid wages and severance benefits during the same period, suggesting that these cases could offer alternative paths for the plaintiffs.

Although other legal actions from former Twitter leaders and employees are still making their way through the courts, we would have to wait a little bit longer to know the outcome. But one thing is for sure, these ex-employees and leaders are not ready to back down.

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