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Elon Musk beats $500 million severance lawsuit by fired Twitter workers
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Elon Musk beats $500 million severance lawsuit by fired Twitter workers
Jul 10, 2024 9:39 AM

July 10 (Reuters) - Elon Musk won dismissal of a lawsuit

claiming he refused to pay at least $500 million of severance to

thousands of Twitter employees he fired in mass layoffs after

buying the social media company now known as X.

U.S. District Judge Trina Thompson in San Francisco ruled on

Tuesday that the federal Employee Retirement Income Security Act

governing benefit plans did not cover the former employees'

claims, and therefore she lacked jurisdiction.

Lawyers for the plaintiffs did not immediately respond to

requests for comment on Wednesday. Musk's lawyers did not

immediately respond to similar requests.

The case is one of many accusing Musk of reneging on

promises to former Twitter employees, including former Chief

Executive Parag Agrawal, and vendors after buying the company

for $44 billion in October 2022.

Musk also runs the electric car company Tesla, and

is the world's richest person, according to Forbes magazine.

According to the complaint, Twitter's 2019 severance plan

called for employees who stayed on after the buyout to receive

two or six months of pay, plus one week of pay for each year of

employment, if they were laid off.

The plaintiffs Courtney McMillian, who oversaw Twitter's

compensation and benefits, and Ronald Cooper, an operations

manager, said Twitter instead offered fired employees just one

month of pay as severance, with no benefits.

Thompson said ERISA didn't apply to Twitter's post-buyout

plan because there was no "ongoing administrative scheme" where

the company reviewed claims case-by-case, or offered benefits

such as continued health insurance and out placement services.

"There were only cash payments promised," she wrote.

The judge said the plaintiffs can try amending their

complaint, but only for claims not governed by ERISA.

The case is McMillian et al v. Musk et al, U.S. District

Court, Northern District of California, No. 23-03461.

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