Elon Musk has saved himself a cool $US500 million ($AU740 million) after a US court ruled that he paid the correct severance pay to the more than 6,000 Twitter staff he fired in 2022.
The lawsuit was filed by Twitter’s former head of people experience and another ex-manager against X Corp (Musk’s holding company for X, AKA Twitter). It alleged that the new business paid the fired Twitter employees, including then-CEO Parag Agrawal, less severance pay than they were promised.
Senior Twitter employees had been entitled to six months pay according to the complaint but Musk only paid them three months — a fact he confirmed, ironically, in a Tweet.
Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.
Everyone exited was offered 3 months of severance, which is 50% more than legally required.
— Elon Musk (@elonmusk) November 4, 2022
The plaintiff estimated Musk owed these former employees upwards of $500 million, citing protections under the federal Employee Retirement Income Security Act (ERISA).
However, US District Judge Trina Thompson dismissed the lawsuit in San Francisco earlier this week.
In a court filing, Judge Thompson said the ERISA protections did not apply because Musk’s company notified employees shortly after the October 2022 takeover that fired employees would only receive cash payouts. Because of this notice, the mass firings that occurred in November were not under Twitter’s previous severance plan, according to the judge.
“We are disappointed in the ruling and considering our options for moving forward,” said a spokesperson for Sanford Heisler Sharp, the law firm representing the plaintiffs in this case, in an email to TechCrunch.
However, Musk is still facing two further lawsuits over the mass firings. In one suit, Agrawal and three other former Twitter execs are seeking $128 million in severance payments, while another seeks a more paltry $1 million.
