Musk's X settling $500M severance lawsuit with fired Twitter employees
What's the story
Elon Musk and his social media company, X, have tentatively settled a class-action lawsuit filed by former Twitter employees. The workers claimed that they were owed $500 million in severance pay after being laid off following Musk's acquisition of Twitter in 2022. The details of the settlement are yet to be disclosed, but it was confirmed through a court filing.
Proceedings
Settlement addresses the lawsuit
The settlement is aimed at resolving a class action lawsuit filed in California by former Twitter employees Courtney McMillian and Ronald Cooper. McMillian was the "head of total rewards" at Twitter, while Cooper was an operations manager. The lawsuit claimed that under a 2019 severance plan, most laid-off workers were entitled to two months' base pay plus one week for every full year of service.
Impact of acquisition
Suit claimed Musk's severance offer was less than expected
Musk's acquisition of Twitter in 2022 triggered mass layoffs, with more than half the company's workforce being let go. The lawsuit alleged that many employees were either underpaid or not paid at all. It also claimed that Musk's three-month severance offer was less than what they expected from Twitter's 2019 severance plan, which promised senior employees up to six months' base pay plus one week per year of service.
Legal battle
Settlement request delays appeal hearing
In July 2024, a federal judge in San Francisco ruled that Musk was not obligated to honor the severance agreements made with Twitter. The plaintiffs appealed this decision, leading to an upcoming oral arguments hearing scheduled for September 17. However, both parties have now requested a delay in this hearing as they work toward finalizing their settlement agreement.