Musk's corporation, X Corp, is set to resolve a $500-million lawsuit pertaining to the termination of employees via Twitter.
Elon Musk's X Corp Reaches Tentative Settlement with Former Twitter Employees Over Severance Pay
In a recent development, Elon Musk's social media company X Corp has reached a tentative settlement agreement with a group of former Twitter employees over a lawsuit concerning $500 million in severance pay. The settlement comes after Musk's acquisition of Twitter, which led to the layoff of over 6,000 employees, with many allegedly not receiving any severance pay as promised.
The proposed settlement resolves a class action filed in California by Courtney McMillian, a former head of Twitter's employee benefits programs, and Ronald Cooper, a former operations manager at Twitter. The lawsuit alleges that Twitter failed to provide the promised severance pay to laid-off workers, contradicting the 2019 severance plan that guaranteed two months of base pay plus one week for each full year of service for layoffs.
Initially, Twitter only provided laid-off workers with at most one month of severance pay. However, senior employees like McMillian were owed six months of base pay according to the 2019 plan. The financial terms of the settlement were not disclosed.
The deal was reported in a Wednesday court filing, and both sides have asked for a delay in a court hearing to finalize the agreement. The exact time of the signing of the settlement agreement was not publicly disclosed.
The lawsuit was initially dismissed by a federal judge in San Francisco in July 2024, but the employees appealed to the San Francisco-based 9th U.S. Court of Appeals. The 9th Circuit had been scheduled to hear oral arguments on the employees' lawsuit on September 17. However, with the settlement, these oral arguments have been postponed.
It is important to note that this settlement does not include the resolution of the lawsuit regarding severance pay. Several lawsuits regarding the terminations and severance pay are still pending in courts in Delaware and California.
Attorneys for Musk and Courtney McMillian did not immediately respond to requests for comment on Thursday. The parties involved are yet to disclose more details about the settlement agreement.
This development marks a significant step towards resolving the ongoing disputes between Twitter and its former employees. As more details emerge, it will be interesting to see how this affects the broader landscape of employee rights and severance pay in tech companies.
