Elon Musk, the CEO of Twitter, as well as Twitter are being sued for failing to provide the tens of thousands of sacked employees with the $500 million in severance money that was promised. In January 2023, Courtney McMillian, a former employee of Twitter’s HR division, filed a class-action lawsuit in federal court in San Francisco. Several lawsuits against Musk for mass firings following his takeover of Twitter last year have been filed.
Details on Elon Musk is accused of failing to pay former Twitter employees $500 million in severance pay
According to the lawsuit, the corporation let go of nearly 6,000 workers. Since October 2022, Musk has reduced the Twitter employees by more than 80%, including Parag Agrawal, the company’s former CEO.
Before beginning to fire employees, Musk was allegedly aware of the company’s severance arrangement, according to the lawsuit. According to the lawsuit, Twitter’s severance plan provides its fired employees with at least two months of basic pay as well as a financial contribution toward health insurance and other benefits. Additionally, it states that workers in senior positions were entitled to six months of basic pay and one week for every complete year of experience.
Twitter is charged with paying the sacked employees “at most” three months’ worth of wages. These three months contained two months of compensation to comply with a US statute requiring employers to give employees notice of termination, as well as one month of severance money. Twitter is accused of firing workers without notifying them of the severance plan adjustments or providing them with any employee benefits to which they were legally entitled. All employees must receive their vested restricted stock units, bonuses, a financial contribution toward their health insurance, and three to six months of outplacement services, according to the lawsuit.
“Everyone exited was offered 3 months of severance, which is 50% more than legally required,” Musk tweeted in November.
Due to widespread layoffs that occurred after Musk took over as CEO of the social media business, Twitter is dealing with a number of related litigation. One of the cases alleges that the business specifically targeted women and disabled employees. Twitter has, however, categorically denied any misconduct in the cases.
Notably, Musk claimed that many people didn’t seem to have much worth prior to his takeover of the firm in a virtual interview with the Wall Street Journal at the CEO Council Summit in London. Therefore, he made the decision to eliminate jobs, which increased production.
