Elon Musk, the owner of Twitter, has been accused of failing to pay approximately $500 million in severance to former employees of the company. The allegations were made by Courtney McMillian, Twitter’s former “head of total rewards,” in a class-action lawsuit. The lawsuit claims that Musk was aware of the severance plan but refused to fulfill the financial obligations, citing concerns about the expense.
Lawsuit Allegations
Courtney McMillian filed a class-action lawsuit against Twitter, accusing the company of withholding severance payments from former employees. The lawsuit alleges that Elon Musk, as the owner of Twitter, was aware of the severance plan prior to terminating thousands of staff members. However, he hesitated to provide the full severance payments due to the perceived cost.
Background of Lawsuits
This lawsuit adds to a series of legal actions filed against Twitter concerning the mass layoffs that occurred following Elon Musk’s acquisition of the company for $44 billion. The lawsuit claims that around 6,000 individuals were affected by the layoffs.
Severance Plan and Payment Shortfall
According to the complaint filed in a San Francisco federal court, Twitter’s severance plan entitled employees to a minimum of two months of base salary, along with a cash contribution towards health insurance and other benefits. Employees in more senior positions, including Courtney McMillian, were entitled to six months of base salary as severance pay, in addition to one week of pay for each year of experience.
However, the lawsuit alleges that the terminated employees received only a maximum of three months’ worth of pay. This included one month of severance pay and an additional two months’ worth of pay to comply with U.S. labor laws requiring notice of termination. The lawsuit claims that this amount was a mere fraction of the $500 million owed to the employees based on the severance plan.
Response from Twitter and Elon Musk
Twitter, which no longer maintains a public relations department, did not provide a comment regarding the allegations. Elon Musk, in a statement made in November after the mass layoffs, announced that employees would receive three months’ worth of pay, which he stated was 50% more than the legal requirement.
Conclusion
The class-action lawsuit accuses Elon Musk and Twitter of withholding approximately $500 million in severance payments owed to former employees. The allegations suggest that employees received a fraction of what they were entitled to under the severance plan. Twitter has refrained from commenting on the matter, while Elon Musk previously announced that employees would receive three months’ worth of pay, exceeding legal requirements. The lawsuit adds to the legal challenges surrounding the mass layoffs that occurred after Musk’s acquisition of Twitter.