Elon Musk and his successor corporation at Twitter, X Corp, are embroiled in a major legal battle as former employees file lawsuits alleging they were denied promised severance packages.
The lawsuit accuses Musk and Twitter of breaching fiduciary duties and misleading the fired employees about their eligibility for severance pay, seeking damages of at least $500 million.
The lawsuit highlights the failure of Twitter and Musk to honor a separation plan made before Musk’s acquisition. Despite assurances given by Musk himself, thousands of laid-off employees were reportedly denied the benefits they were promised under US law. The lawsuit claims that Musk and Twitter used funds earmarked for severance pay to support the company after mass layoffs.
Litigation partner Christopher Owens of Sanford Hesler Sharp said, “We believe that these defendants were not loyal to Twitter employees as participants in the scheme, and that they knowingly participated in and supported each other’s perfidious conduct.” enabled.” Kate Muetting, the lead attorney for the fired Twitter employees, highlighted Musk’s involvement, saying he had made promises to prevent mass resignations that could jeopardize the merger and the company.
In addition to seeking financial damages, the lawsuit aims to compel Twitter and Musk to meet their obligations by paying the dismissed employees according to the severance plan. The case revolves around violations of the Employee Retirement Income Security Act (ERISA), which regulates employee benefit plans.
The lawsuit adds to the legal challenges facing Twitter, including a $250 million copyright infringement lawsuit filed by music publishers. In addition, Musk’s involvement with Twitter has led to his company threatening legal action against Meta, accusing them of stealing trade secrets related to the Threads initiative.
As the legal battle unfolds, Twitter and Musk must address the allegations and provide clarity on their commitment to upholding employee welfare. The outcome of a lawsuit can have significant financial implications for both parties and underscores the importance of honoring contractual obligations in the business world.
Twitter’s history of lawsuits related to mass layoffs, including claims of gender and disability discrimination, further complicates the situation. The company is facing several legal challenges, which may affect its reputation and financial stability going forward.