Elon Musk Wins Legal Battle Over $500M Severance Claims from Former Twitter Employees
In a significant legal victory for Elon Musk, a U.S. judge has dismissed a lawsuit brought by former Twitter employees seeking approximately $500 million in severance payments. The ex-employees accused Musk of unlawfully withholding these payments following his acquisition of the social media platform.
Judge Trina Thompson ruled that the plaintiffs failed to demonstrate their claims were safeguarded under federal law. This decision marks a win for Musk, who acquired Twitter in 2022 and promptly implemented sweeping changes, including the termination of thousands of employees. These actions led to multiple lawsuits from former employees and vendors, alleging that the company reneged on promised payments.
The dismissed complaint was filed in 2023 in a San Francisco federal court by Courtney McMillian, who previously served as Twitter’s “head of total rewards.” McMillian claimed that the company only provided one month’s pay as severance, rather than the more substantial benefits promised, which included at least two months’ salary and contributions toward health insurance.
Musk’s legal team argued for the complaint’s dismissal, asserting that the Employee Retirement Income Security Act (ERISA) did not apply in this case. ERISA sets standards for private health and pension plans.
A spokesperson for McMillian’s team expressed disappointment in the ruling and indicated they are considering further actions. Meanwhile, other related lawsuits, including one filed by former Twitter executives, are still pending in the courts.
Judge Thompson acknowledged these ongoing disputes in her ruling, suggesting that the plaintiffs might find opportunities to pursue their claims in other cases. “The Court lacks jurisdiction. However, plaintiffs are not without recourse. Indeed, there are other cases brought against Twitter for the failure to pay wages or provide employee severance benefits during the same or overlapping period,” she noted.
