See what’s clicking on FoxBusiness.com
Billionaire Elon Musk won the dismissal of a lawsuit brought by former Twitter employees seeking $500 million in severance payments that Musk allegedly refused to pay after his purchase of the social media company, now known as X.
U.S. District Judge Trina Thompson in San Francisco on Tuesday issued a ruling that claims by former Twitter employees were not covered by the federal Employee Retirement Income Security Act (ERISA), which governs benefit plans, so that it lacked jurisdiction and dismissed their claims. according to that law.
In the lawsuit it was claimed that according to Twitter opt-out plan, employees who remained after the Musk-led ownership group bought the company for $44 billion would receive two or six months’ pay, plus one week’s pay for each year of employment if they were fired. The lawsuit was originally filed in July 2023.
It was filed by Courtney McMillian, Twitter’s head of compensation and benefits, and operations manager Ronald Cooper, who said the company violated that plan by offering laid-off employees a month’s pay without benefits.
TWITTER HITS WITH LAWSUIT ALLEGING FORMER EMPLOYEES TO SET $500 MILLION IN INHERITANCE PAY
A judge on Wednesday dismissed claims made by former Twitter employees that Elon Musk rejected the company’s severance plans under a federal employee benefits law. (Apu Gomes/Getty Images/Getty Images)
The judge said ERISA did not apply to Twitter’s post-acquisition plan because it did not contain an “ongoing administrative scheme” in which the company would review claims on a case-by-case basis, or provide benefits such as health insurance. continuous or placement services abroad.
“Only cash payments were promised,” Thompson wrote.
Thompson said employees who were laid off by Twitter’s mass layoffs in 2022 and 2023 may try to to amend their suitbut only for claims not covered by ERISA.
ELON MUSK SUED BY USED TWITTER EXECUTIVES FOR $128 MILLION IN SHAREHOLDERS
Musk laid off about half of Twitter’s employees after the acquisition was completed, saying the cuts were necessary to stem financial losses. (Elon Musk/AFP X Account via Getty Images / Getty Images)
Musk said at the time that Twitter mass layoffs were needed to avoid bankruptcy because the company was losing about $4 million a day at the time it was acquired.
The company and Musk face other lawsuits alleging he reneged on promises to Twitter employees, including former CEO Parag Agrawal, as well as vendors after the company was acquired.
MUSK SHOULD END TWITTER LAWSUIT, SUGGESTS LATE ANNOUNCEMENT WAS A MISTAKE
Musk’s ownership group completed the acquisition of Twitter in October 2022, after a legal battle in which he tried to back out of the purchase. (Justin Sullivan/Getty Images/Getty Images)
Agrawal filed his suit along with several others former Twitter executivesincluding CFO Ned Segal, Chief Legal Officer Vijaya Gadde and General Counsel Sean Edgett.
The group of former Twitter executives is seeking $128 million in severance pay they claim Musk refused to pay them after firing them for cause — a move they say was intended to deny them severance pay otherwise they would have a contractual right.
Musk is also dealing with a lawsuit related to the Twitter purchase from shareholders who claim he and his wealth manager knowingly failed to comply with a Securities Commission the rule requiring acquisitions of more than 5% of a company’s stock to be disclosed.
GET FOX BUSINESS IN ALBANIA by clicking HERE
In a court filing last week, Musk said his late disclosure, which occurred 11 days after it should have been made, was due to a misunderstanding of the rule and not an attempt to mislead shareholders, and that he disclosed it immediately. as he misunderstood.
Reuters contributed to this report.