Elon Musk and Twitter Layoffs. $500 Million Lawsuit. Court Decision


The District Court in San Francisco dismissed a class action lawsuit by former Twitter (now X) employees seeking damages totaling half a billion dollars. As a result of the revolution that Elon Musk led after taking over the social network, thousands of people lost their jobs.

In early October 2022, after many twists and turns, Elon Musk he finally declared that he was ready to buy Twitter for the originally agreed price of 44 billion dollars. The transaction was finalized at the end of the month. After the takeover, the billionaire led to a real revolution – among other things, the logo of the service changed, as well as its policy regarding account verification fees. There were also large group layoffs, as a result of which thousands of people lost their jobs.

Employee Accusations

It was not an amicable divorce, and claims related to it are still the subject of legal battles, in one of which former Twitter employees accused the billionaire of refusing to pay them severance payments totaling at least $500 million.

The joint class action lawsuit included thousands of people. The employees argued that under their contracts, if they were dismissed, they should be entitled to two or six months' pay. Those with longer service were supposed to receive higher benefits – according to the employees, they were entitled to an additional pro rata weekly pay for each year of employment.

The lawsuit alleges that Twitter instead offered the laid-off employees a severance package equivalent to one salary, with no bonuses or benefits.

Court decision

Now, the District Court in San Francisco has issued a decision in this case. According to the judge, the plaintiffs' claims are without merit and the legal basis they invoked does not govern the issue of claims against the former employer. It is the Employee Retirement Income Security Act of 1974 (ERISA), which is a federal law that regulates, among other things, the protection of employees when it comes to retirement plans in workplaces and those related to health care.

“However, plaintiffs are not barred from pursuing their rights under other laws. There are other cases filed against Twitter for failure to pay wages or provide severance pay to employees during the same or overlapping period,” the lawsuit said.

Former Twitter executives, including former CEO Parag Agrawal, also have their own claims.

Main image source: Frederic Legrand – COMEO / Shutterstock

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